**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

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**FORM 10-Q**

(Mark One)

**x**                              QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**Forthe quarterly period ended March 31, 2007**

**or**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**Forthe transition period from                  to                  **

**Commissionfile number:  333-124100**

**CDRV INVESTORS, INC.**(Exact name of registrant as specified in its charter)

| **Delaware**                                                     |   | **56-2445503**                        |
|------------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |   | (I.R.S. Employer  Identification No.) |
| **1310 Goshen Parkway  P.O. Box 2656  West Chester, PA**    |   | **19380**                             |
| (Address of  principal executive offices)                        |   | (Zip code)                            |

 

**(610)431-1700**(Registrant’s telephonenumber, including area code)

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days. Yes oNo x

Indicateby check mark whether the registrant is a large accelerated filer, an acceleratedfiler, or a non-accelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act. (Checkone):

| Large accelerated  filer o |   | Accelerated filer  o |   | Non-accelerated  filer x |
|---------------------------------|--------|----------------------|--------|--------------------------|

 

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Asof March 31, 2007, there was no established public market for theregistrant’s common stock, par value $0.01 per share. The number of shares ofthe registrant’s common stock outstanding at May 14, 2007 was 5,803,588.

 

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**CDRV INVESTORS,INC.FORM 10-QFOR THE QUARTER ENDED MARCH 31, 2007**

**INDEX**

**PART I.   FINANCIALINFORMATION:**
|                                                      | ** ** | ** **                                                                                                                                           | ** ** | **Page No.** |
|------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------|
| Item  1.                                             |       | Financial  Statements:                                                                                                                               |       |              |   |   |
|                                                 |       | Consolidated Balance Sheets—as of March 31, 2007  (Unaudited) and December 31, 2006                          |       |              | 1 |   |
|                                                 |       | Consolidated Statements of Operations (Unaudited)—for  the three months ended March 31, 2007 and 2006                                      |       |              | 2 |   |
|                                                 |       | Consolidated Statement of Stockholders’ Equity and  Other Comprehensive Income (Unaudited)—for the three months ended  March 31, 2007 |       |              | 3 |   |
|                                                 |       | Consolidated Statements of Cash Flows (Unaudited)—for  the three months ended March 31, 2007 and 2006                                      |       |              | 4 |   |
|                                                 |       | Notes to Consolidated Financial Statements (Unaudited)                                                                                               |       |              | 5 |   |
| Item 2.                                              |       | Management’s Discussion and Analysis of Financial  Condition and Results of Operations                            |       |              | 19 |   |
| Item 3.                                              |       | Quantitative and Qualitative Disclosures about Market  Risk                                                                                          |       |              | 28 |   |
| Item  4.                                             |       | Controls  and Procedures                                                                                                                             |       |              | 28 |   |
| **PART II.**   **OTHER INFORMATION:** |       |                                                                                                                                                 |       |              |
| Item 1.                                              |       | Legal Proceedings                                                                                                                                    |       |              | 29 |   |
| Item  1A.                                            |       | Risk Factors                                                                                                                                         |       |              | 29 |   |
| Item 6.                                              |       | Exhibits                                                                                                                                             |       |              | 29 |   |
| Signature                                            |       |                                                                                                                                                 | 30         |              |

 

i

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**PART I—FINANCIALINFORMATION**

**Item 1—*Financial Statements***

**CDRV INVESTORS, INC.Consolidated Balance Sheets(Dollars in millions, except share data)**

| ** **                                                                                                                                                                                                                          | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                                                                                                                                                                                                                          | ** ** | **2007**           | ** ** | **2006**              | ** ** |
| ** **                                                                                                                                                                                                                          | ** ** | **(Unaudited)**    | ** ** | ** **            | ** ** |
| **Assets**                                                                                                                                                                                                                          |       |               |       |                  |       |   |   |   |   |
| Current Assets:                                                                                                                                                                                                                     |       |               |       |                  |       |   |   |   |   |
| Cash and cash  equivalents                                                                                                                                                                                                          |       |               | $          | 137.4                 |       |   |   | $ | 139.4 |   |   |
| Trade accounts  receivable, less reserves of $9.7 and $9.8, respectively                                                                                                                                                            |       |               | 478.7      |                  |       |   | 452.7 |   |   |
| Other receivables                                                                                                                                                                                                                   |       |               | 20.2       |                  |       |   | 30.1 |   |   |
| Inventories                                                                                                                                                                                                                         |       |               | 255.2      |                  |       |   | 260.6 |   |   |
| Other current assets                                                                                                                                                                                                                |       |               | 24.4       |                  |       |   | 20.5 |   |   |
| Total current assets                                                                                                                                                                                                                |       |               | 915.9      |                  |       |   | 903.3 |   |   |
| Property and equipment,  net                                                                                                                                                                                                        |       |               | 157.2      |                  |       |   | 156.9 |   |   |
| Investments                                                                                                                                                                                                                         |       |               | 8.7        |                  |       |   | 8.3 |   |   |
| Goodwill                                                                                                                                                                                                                            |       |               | 936.4      |                  |       |   | 933.1 |   |   |
| Other intangible assets,  net                                                                                                                                                                                                       |       |               | 550.5      |                  |       |   | 552.3 |   |   |
| Deferred income taxes                                                                                                                                                                                                               |       |               | 19.6       |                  |       |   | 13.1 |   |   |
| Other assets                                                                                                                                                                                                                        |       |               | 42.1       |                  |       |   | 43.1 |   |   |
| Total assets                                                                                                                                                                                                                        |       |               | $          | 2,630.4               |       |   |   | $ | 2,610.1 |   |   |
| **Liabilities and Stockholders’ Equity**                                                                                                                                                                                       |       |               |       |                  |       |   |   |   |   |
| Current Liabilities:                                                                                                                                                                                                                |       |               |       |                  |       |   |   |   |   |
| Short-term portion of  debt and current portion of capital lease obligations                                                                                                                                                        |       |               | $          | 1.2                   |       |   |   | $ | 21.8 |   |   |
| Accounts payable                                                                                                                                                                                                                    |       |               | 378.2      |                  |       |   | 380.8 |   |   |
| Accrued expenses                                                                                                                                                                                                                    |       |               | 174.0      |                  |       |   | 170.8 |   |   |
| Total current  liabilities                                                                                                                                                                                                          |       |               | 553.4      |                  |       |   | 573.4 |   |   |
| Long-term debt                                                                                                                                                                                                                      |       |               | 1,671.5    |                  |       |   | 1,661.0 |   |   |
| Capital lease  obligations                                                                                                                                                                                                          |       |               | 4.6        |                  |       |   | 4.8 |   |   |
| Other long-term  liabilities                                                                                                                                                                                                        |       |               | 90.3       |                  |       |   | 80.5 |   |   |
| Deferred income taxes                                                                                                                                                                                                               |       |               | 227.9      |                  |       |   | 227.0 |   |   |
| Total liabilities                                                                                                                                                                                                                   |       |               | 2,547.7    |                  |       |   | 2,546.7 |   |   |
| Common stock purchase  subject to guarantee agreement                                                                                                                                                                               |       |               | 0.5        |                  |       |   | 0.5 |   |   |
| Commitments and contingences                                                                                                                                                                                                        |       |               |       |                  |       |   |   |   |   |
| Stockholders’ equity:                                                                                                                                                                                                          |       |               |       |                  |       |   |   |   |   |
| Common stock, $0.01 par  value; 7,000,000 shares authorized; 5,870,268 shares issued and  5,803,588 outstanding at March 31, 2007; 5,862,892 shares issued and  5,803,412 outstanding at December 31, 2006 |       |               | 0.1        |                  |       |   | 0.1 |   |   |
| Additional paid-in  capital                                                                                                                                                                                                         |       |               | 15.6       |                  |       |   | 14.5 |   |   |
| Retained earnings                                                                                                                                                                                                                   |       |               | 14.6       |                  |       |   | 1.7 |   |   |
| Accumulated other  comprehensive income                                                                                                                                                                                             |       |               | 56.8       |                  |       |   | 50.8 |   |   |
| Treasury stock, at cost,  66,680 shares at March 31, 2007 and 59,480 shares at  December 31, 2006                                                                                                               |       |               | (4.9       | )                     |       |   | (4.2 | ) |   |
| Total stockholders’  equity                                                                                                                                                                                                    |       |               | 82.2       |                  |       |   | 62.9 |   |   |
| Total liabilities and stockholders’ equity                                                                                                                                                                                     |       |               | $          | 2,630.4               |       |   |   | $ | 2,610.1 |   |   |

 

See accompanying notes to consolidated financial statements.

1

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**CDRV INVESTORS,INC.Consolidated Statements of Operations(Dollars in millions)(Unaudited)**

| ** **                                    | ** ** | **Three Months Ended  March 31,** | ** ** |
|-----------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                    | ** ** | **   2007   **     | ** ** | **   2006   ** | ** ** |
| Net sales                                     |       |                                             | $          | 843.1 |   |   |   | $ | 795.8 |   |   |
| Cost of goods  sold                           |       |                                             | 604.9      |   |   |   | 581.4 |   |   |
| Gross profit                                  |       |                                             | 238.2      |   |   |   | 214.4 |   |   |
| Selling, general  and administrative expenses |       |                                             | 181.7      |   |   |   | 168.5 |   |   |
| Restructuring  credits                        |       |                                             | —     |   |   |   | (0.2 | ) |   |
| Operating income                              |       |                                             | 56.5       |   |   |   | 46.1 |   |   |
| Interest income                               |       |                                             | (1.7       | ) |   |   | (1.3 | ) |   |
| Interest expense                              |       |                                             | 37.4       |   |   |   | 28.7 |   |   |
| Other (income)  expense, net                  |       |                                             | (0.1       | ) |   |   | 0.8 |   |   |
| Income before income taxes                    |       |                                             | 20.9       |   |   |   | 17.9 |   |   |
| Income tax  provision                         |       |                                             | 8.0        |   |   |   | 6.9 |   |   |
| Net income                                    |       |                                             | $          | 12.9 |   |   |   | $ | 11.0 |   |   |

 

See accompanying notes to consolidated financial statements.

2

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**CDRV INVESTORS, INC.Consolidated Statement of Stockholders’ Equity and Other Comprehensive IncomeThree Months Ended March 31, 2007(Dollars in millions)(Unaudited)**

| ** **                                                            | ** ** | ** **            | ** ** | ** **  | ** ** | **Additional** | ** ** | ** **        | ** ** | **Accumulated  other**                     | ** ** | ** **                         | ** ** | ** **                         | ** ** |
|-----------------------------------------------------------------------|------------|-----------------------|------------|-------------|------------|----------------|------------|-------------------|------------|--------------------------------------------|------------|------------------------------------|------------|------------------------------------|------------|
| ** **                                                            | ** ** | **Common stock** | ** ** | **paid-in** | ** ** | **Retained**   | ** ** | **comprehensive** | ** ** | **Treasury stock, at cost** | ** ** | ** **                         | ** ** |
| ** **                                                            | ** ** | **Shares**            | ** ** | **Amount**  | ** ** | **capital**    | ** ** | **earnings**      | ** ** | **income**                                 | ** ** | **  Shares  ** | ** ** | **  Amount  ** | ** ** | **Total** | ** ** |
| Balance at  January 1, 2007                                      |       | 5,862,892             |       |        | $          | 0.1            |       |              |       | $                                          | 14.5       |                               |       |                               | $          | 1.7 |   |   |   | $ | 50.8 |   |   |   | 59,480 |   |   |   | $ | (4.2 | ) |   | $ | 62.9 |   |
| Issuance of common stock in connection with our stock  incentive plan |       | 1,476                 |       |        | —     |           |       |              | 0.2        |                                       |       |                               | —     |                               |       |   | — |   |   |   | — |   |   |   | — |   |   | 0.2 |   |
| Exercise of stock options                                             |       | 5,900                 |       |        | —     |           |       |              | 0.2        |                                       |       |                               | —     |                               |       |   | — |   |   |   | — |   |   |   | — |   |   | 0.2 |   |
| Stock-based compensation                                              |       | —                |       |        | —     |           |       |              | 0.6        |                                       |       |                               | —     |                               |       |   | — |   |   |   | — |   |   |   | — |   |   | 0.6 |   |
| Tax benefit related to stock options                                  |       | —                |       |        | —     |           |       |              | 0.1        |                                       |       |                               | —     |                               |       |   | — |   |   |   | — |   |   |   | — |   |   | 0.1 |   |
| Acquisition of treasury stock                                         |       | —                |       |        | —     |           |       |              | —     |                                       |       |                               | —     |                               |       |   | — |   |   |   | 7,200 |   |   |   | (0.7 | ) |   | (0.7 | ) |
| Comprehensive  income:                                                |       |                  |       |        |       |           |       |              |       |                                       |       |                               |       |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                            |       | —                |       |        | —     |           |       |              | —     |                                       |       |                               | 12.9       |                               |       |   | — |   |   |   | — |   |   |   | — |   |   | 12.9 |   |
| Foreign currency translation adjustment                               |       | —                |       |        | —     |           |       |              | —     |                                       |       |                               | —     |                               |       |   | 6.0 |   |   |   | — |   |   |   | — |   |   | 6.0 |   |
| Total comprehensive income                                            |       |                  |       |        |       |           |       |              |       |                                       |       |                               |       |                               |       |   |   |   |   |   |   |   |   |   |   |   |   | 18.9 |   |
| Balance at March 31,  2007                                       |       | 5,870,268             |       |        | $          | 0.1            |       |              |       | $                                          | 15.6       |                               |       |                               | $          | 14.6 |   |   |   | $ | 56.8 |   |   |   | 66,680 |   |   |   | $ | (4.9 | ) |   | $ | 82.2 |   |

 

See accompanying notes to consolidated financial statements.

3

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**CDRV INVESTORS, INC.Consolidated Statements of Cash Flows(Dollars in millions)(Unaudited)**
|                                                                                    | ** ** | **Three Months Ended  March 31,** | ** ** |
|------------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                                         | ** ** | **   2007   **     | ** ** | **   2006   ** | ** ** |
| Cash flows from operating activities:                                              | ** ** |                                             | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Net income                                                                         |       |                                             | $          | 12.9 |   |   |   | $ | 11.0 |   |   |
| Adjustments to reconcile net income to net cash provided  by operating activities: |       |                                             |       |   |   |   |   |   |   |
| Depreciation and  amortization                                                     |       |                                             | 10.0       |   |   |   | 8.2 |   |   |
| Loss (gain) on sale of  assets                                                     |       |                                             | 0.2        |   |   |   | (0.1 | ) |   |
| Non-cash interest  accretion                                                       |       |                                             | 8.7        |   |   |   | 8.0 |   |   |
| Non-cash credit for  restructuring                                                 |       |                                             | —     |   |   |   | (0.2 | ) |   |
| Non-cash equity  compensation expense                                              |       |                                             | 0.6        |   |   |   | 0.5 |   |   |
| Amortization of debt  issuance costs                                               |       |                                             | 1.7        |   |   |   | 1.5 |   |   |
| Deferred income tax  expense (benefit)                                             |       |                                             | 0.9        |   |   |   | (0.3 | ) |   |
| Provision for doubtful  accounts                                                   |       |                                             | 0.8        |   |   |   | 0.7 |   |   |
| Changes in working capital:                                                        |       |                                             |       |   |   |   |   |   |   |
| Trade accounts  receivable                                                         |       |                                             | (24.0      | ) |   |   | (30.2 | ) |   |
| Other receivables                                                                  |       |                                             | 10.1       |   |   |   | 9.9 |   |   |
| Inventories                                                                        |       |                                             | 6.2        |   |   |   | 12.5 |   |   |
| Other assets                                                                       |       |                                             | (3.7       | ) |   |   | (2.8 | ) |   |
| Accounts payable                                                                   |       |                                             | 6.0        |   |   |   | 19.5 |   |   |
| Accrued expenses and  other long-term liabilities                                  |       |                                             | 5.5        |   |   |   | 19.0 |   |   |
| Net cash provided by  operating activities                                         |       |                                             | 35.9       |   |   |   | 57.2 |   |   |
| Cash flows from investing activities:                                              |       |                                             |       |   |   |   |   |   |   |
| Capital expenditures                                                               |       |                                             | (5.9       | ) |   |   | (4.8 | ) |   |
| Acquisition of business  and transaction costs                                     |       |                                             | (0.1       | ) |   |   | (0.2 | ) |   |
| Proceeds from sales of  property and equipment                                     |       |                                             | 0.1        |   |   |   | 0.2 |   |   |
| Net cash used in  investing activities                                             |       |                                             | (5.9       | ) |   |   | (4.8 | ) |   |
| Cash flows from financing activities:                                              |       |                                             |       |   |   |   |   |   |   |
| Proceeds from debt                                                                 |       |                                             | 0.1        |   |   |   | 0.1 |   |   |
| Repayment of debt                                                                  |       |                                             | (21.0      | ) |   |   | (45.3 | ) |   |
| Net change in bank checks  outstanding                                             |       |                                             | (10.4      | ) |   |   | (9.9 | ) |   |
| Proceeds from stock  incentive plan                                                |       |                                             | 0.2        |   |   |   | 1.2 |   |   |
| Acquisition of treasury  stock                                                     |       |                                             | (0.7       | ) |   |   | (1.5 | ) |   |
| Cash paid for debt  issuance costs                                                 |       |                                             | (0.3       | ) |   |   | — |   |   |
| Cash paid to amend  Senior Secured Credit Facility                                 |       |                                             | (0.3       | ) |   |   | — |   |   |
| Net cash used in  financing activities                                             |       |                                             | (32.4      | ) |   |   | (55.4 | ) |   |
| Effect of exchange rate  changes on cash                                           |       |                                             | 0.4        |   |   |   | — |   |   |
| Net decrease in cash and  cash equivalents                                         |       |                                             | (2.0       | ) |   |   | (3.0 | ) |   |
| Cash and cash  equivalents beginning of period                                     |       |                                             | 139.4      |   |   |   | 126.1 |   |   |
| Cash and cash  equivalents end of period                                           |       |                                             | $          | 137.4 |   |   |   | $ | 123.1 |   |   |
| Supplemental disclosures of cash flow information:                                 |       |                                             |       |   |   |   |   |   |   |
| Cash paid during the period for:                                                   |       |                                             |       |   |   |   |   |   |   |
| Interest                                                                           |       |                                             | $          | 17.2 |   |   |   | $ | 9.8 |   |   |
| Income taxes paid, net                                                             |       |                                             | $          | 8.1 |   |   |   | $ | 3.1 |   |   |

 

See accompanying notes to consolidated financial statements.

4

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Dollars in millions, except share data) (Unaudited)**

**(1)**   Nature ofOperations and Basis of Presentation

***(a)***   Natureof Operations

CDRV Investors, Inc.(“CDRV,” the “Company,” “we” or “our”), through its wholly-owned subsidiary VWRInternational, Inc. (“VWR”), distributes scientific supplies, chemicals,and equipment and provides services, primarily in North America and Europe. Thebusiness is diversified across products, geographic regions and customersegments. We report financial results on the basis of the following threebusiness segments: North American laboratory distribution (“North American Lab”),European laboratory distribution (“European Lab”) and Science Education. Inaddition, we have Asia Pacific operations, which for purposes of externalreporting, are embedded within the North American Lab and European Labsegments. Both the North American Lab and European Lab segments are comprisedof the distribution of supplies to customers in major pharmaceutical,biotechnology, chemical, technology, food processing and consumer productsindustries, as well as governmental agencies, universities and researchinstitutes, and environmental organizations. Science Education is comprised ofthe manufacture and distribution of scientific supplies and specialized kits toprimary and secondary schools.

See Note 13 fordiscussion of our agreement to be acquired by an affiliate of Madison DearbornPartners, LLC.

***(b) Basis ofPresentation***

The accompanyingconsolidated financial statements include the accounts of the Company afterelimination of all intercompany balances and transactions. The financialstatements included herein have been prepared by the Company without audit,pursuant to the rules and regulations of the Securities and ExchangeCommission. Certain information and footnote disclosures normally included infinancial statements prepared in accordance with accounting principlesgenerally accepted in the United States of America have been condensed oromitted pursuant to such rules and regulations. The December 31, 2006balance sheet is the balance sheet included in the audited financial statementsas shown in the Company’s Annual Report on Form 10-K for the yearended December 31, 2006. The Company believes that the disclosuresincluded herein are adequate to make the information presented not misleadingin any material respect when read in conjunction with the financial statements,footnotes and related disclosures included in the Company’s Annual Report on Form 10-Kfor the year ended December 31, 2006.

The financial informationpresented herein reflects all adjustments (consisting only of normal-recurringadjustments) that are, in the opinion of management, necessary for a fairpresentation of the****results forthe interim periods presented. The results for interim periods are notnecessarily indicative of the results to be expected for the full year.

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. While actual results could differ from those estimates,management believes that the estimates are reasonable.

5

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

**(2)   New Accounting Standards**

The following accountingstandards were adopted during the first quarter of 2007.

During July 2006, theFinancial Accounting Standards Board (“FASB”) issued Interpretation No. 48,*Accounting for Uncertainty in Income Taxes*(“FIN 48”). This Interpretation clarifies the accounting for uncertainty inincome taxes recognized in accordance with Statement of Financial AccountingStandards (“SFAS”) No. 109, *Accountingfor Income Taxes.*FIN 48 provides guidance on the financialstatement recognition and measurement of a tax position taken or expected to betaken in a tax return, derecognition, classification, interest and penalties,accounting in interim periods, disclosures, and transition. FIN 48 is effectivefor fiscal years beginning after December 15, 2006. We adopted FIN 48effective January 1, 2007. See Note 3 for further information related toour adoption of FIN 48.

During July 2006, theFASB issued Emerging Issues Task Force (“EITF”) Issue No. 06-3, HowTaxes Collected from Customers and Remitted to Governmental Authorities ShouldBe Presented in the Income Statement (That Is, Gross versus Net Presentation) (“EITF06-3”), which discusses the presentation of certain taxes in the incomestatement on either a gross or net basis. Taxes within the scope of EITF 06-3include any taxes assessed by a governmental authority that are directlyimposed on a revenue-producing transaction between a seller and a customer andmay include, but are not limited to, sales taxes, use taxes, value-added taxes,and certain excise taxes. The presentation of these taxes on either a gross(included in revenues and costs) or a net (excluded from revenues) basis is anaccounting policy decision that is required to be disclosed, as well as, theamounts of any taxes that are reported on a gross basis. EITF 06-3 iseffective for interim and annual periods beginning after December 15,2006; accordingly, we adopted EITF 06-3 effective January 1, 2007.We record such taxes within the scope of EITF 06-3 on a net basis. Theadoption of EITF 06-3 did not result in a change in our accounting policyand, accordingly, did not have a material effect on the Company’s financialposition or results of operations.

The following accountingstandards will be adopted in the future.

During September 2006,the FASB issued SFAS No. 157, *FairValue Measurements* (“SFAS 157”). This Statement defines fair value,establishes a framework for measuring fair value and expands disclosures aboutfair value measurements required under other accounting pronouncements, butdoes not change existing guidance as to whether or not an instrument is carriedat fair value. SFAS 157 is effective for fiscal years beginning after November 15,2007. We are currently evaluating the impact this Statement will have on ourconsolidated financial statements.

During February 2007,the FASB issued SFAS No. 159, *The FairValue Option for Financial Assets and Financial Liabilities including anAmendment of SFAS No. 115* (“SFAS 159”). This Statement permitsentities to choose, at specified election dates, to measure eligible items atfair value and its objective is to improve financial reporting by providingentities with the opportunity to mitigate volatility in reported earningscaused by measuring related assets and liabilities differently without havingto apply complex hedge accounting provisions. SFAS 159 is effective for fiscalyears beginning after November 15, 2007. We are currently evaluating theimpact this Statement will have on our consolidated financial statements.

**(3)**   Adoption of FIN 48

FIN 48 requires us torecognize in our consolidated financial statements, the impact of a taxposition if that tax position is more likely than not to be sustained uponexamination, based on technical merits. As of January 1, 2007, we haduncertain tax positions of approximately $7.0. Of the total, $2.1 would affectour 

6

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

effectivetax rate and the remaining $4.9 would result in an adjustment to goodwill. Inaddition, as of January 1, 2007, we had accrued interest related to ouruncertain tax positions of approximately $1.3. Interest and penalties relatedto uncertain tax positions are included in income tax expense.

We conduct businessglobally and, as a result, the Company or one or more of our subsidiaries,files income tax returns in the U.S. federal jurisdiction and various state andforeign jurisdictions. In the normal course of business, we are subject toexamination by taxing authorities mainly throughout North America and Europe,including such major jurisdictions as Germany, France, the UK, Belgium, Swedenand the U.S.

We have concluded all U.S.federal income tax matters for years through 2003. Our U.S. federal income taxreturns for 2004 and 2005 are currently under examination. Substantially allincome tax matters in the major foreign jurisdictions that we operate have beenconcluded for years through 2000. Examinations are currently in process inBelgium and Germany. Except for one uncertain tax position, that has beenreserved, substantially all material state and local income tax matters havebeen finalized through 2001. Based on the status of examinations, it is notlikely that these examinations will be concluded in the next twelve months, andaccordingly, it is not possible to estimate the impact in 2007, if any, to thereserve for uncertain tax positions. There have been no significant changes tothe status of the examinations during the quarter ended March 31, 2007.

At the date of adoption,we identified $2.2 relating to the recognition of the indirect tax effect ofthe federal benefit on tax uncertainties. This benefit was partially offset byother net tax uncertainties, primarily related to state taxes, of $0.6. Thesetax uncertainties relate to contingencies that existed prior to VWR’sacquisition in April 2004; and, as such, the Company increased deferredtax assets by $1.3, decreased goodwill by $1.6 and decreased our reserves foruncertain tax positions by $0.3.

**(4)**   Stock-BasedCompensation

TheCompany has certain share-based compensation programs under the CDRV Investors, Inc.Stock Incentive Plan (the “Stock Plan”), which include shares, options andrestricted stock units. Refer to Note 15 in our Annual Report on Form 10-Kfor the year ended December 31, 2006 for information on the valuation andaccounting for these programs. During the three months ended March 31,2007, we granted 1,000 options to one of our employees and during the threemonths ended March 31, 2006, we granted 58,929 options to our Presidentand Chief Executive Officer. In addition, we granted 3,500 restricted stockunits to certain of our officers at a grant-date fair value of $98.64 duringthe three months ended March 31, 2007. These awards vest in equal annualinstallments over a five-year period and will vest earlier in certaincircumstances if the Company has a change in control. The fair value of eachoption was estimated using the Black-Scholes option-pricing model. The weightedaverage fair value of options granted and the assumptions used for each of thereporting periods are as follows:

| ** **                     | ** ** | **Three Months Ended** | ** ** |
|--------------------------------|------------|----------------------------------|------------|
| ** **                     | ** ** | **March 31,**               | ** ** |
| ** **                     | ** ** | **2007**                         | ** ** | **2006** | ** ** |
| Fair value of  options granted |       | $                                | 42.96      |   | $ | 33.61 |   |
| Risk-free  interest rate       |       | 4.53                             | %          | 4.76 | % |
| Expected life of  options      |       | 6.5 years                        |       | 6.5 years |   |
| Volatility                     |       | 34                               | %          | 35 | % |
| Expected dividend yield        |       | 0.0                              | %          | 0.0 | % |
|                                |            |                                  |            |  |  |  |  |

 

7

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

Share-basedcompensation charged to selling, general and administrative expenses was $0.6and $0.5 for the three months ended March 31, 2007 and 2006, respectively.The following is a summary of outstanding stock options as of March 31,2007.

| ** **   | ** ** | **Weighted**    | ** ** | ** **            | ** **                   | ** **    | ** ** | ** ** | ** **                   | ** **    | ** ** |
|--------------|------------|-----------------|------------|-----------------------|------------------------------|---------------|------------|------------|------------------------------|---------------|------------|
| ** **   | ** ** | **Average**     | ** ** | ** **            | **Options Outstanding** | ** **    | ** ** | ** ** | **Options Exercisable** | ** **    | ** ** |
| ** **   | ** ** | **Remaining**   | ** ** | **Number**            | ** **                   | **Aggregate** | ** ** | **Number** | ** **                   | **Aggregate** | ** ** |
| **Exercise** | ** ** | **Contractual** | ** ** | **of**                | ** **                   | **Intrinsic** | ** ** | **of**     | ** **                   | **Intrinsic** | ** ** |
| ** **   | **Price**  | ** **      | ** ** | **Life (Years)** | ** **                   | ** **    | **Shares** | ** ** | ** **                   | ** **    | **Value**  | ** ** | ** ** | ** ** | **Shares** | ** ** | ** ** | ** ** | **Value** | ** ** | ** ** |
|         | $          | 24.66           |       |                  |                         | 7.8           |       |       |                         | 445,591       |       |   |   | $ | 33.0 |   |   |   | 156,664 |   |   |   | $ | 11.6 |   |   |
|         | 59.64      |            |       |                  | 9.2                          |          |       |       | 61,243                       |          |       |   | 2.4 |   |   |   | — |   |   |   | — |   |   |
|         | 98.64      |            |       |                  | 10.0                         |          |       |       | 1,000                        |          |       |   | — |   |   |   | — |   |   |   | — |   |   |
|         |       |            |       |                  |                         |          |       |       | 507,834                      |          |       |   | $ | 35.4 |   |   |   | 156,664 |   |   |   | $ | 11.6 |   |   |
|              |            |                 |            |                       |                              |               |            |            |                              |               |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

As of March 31, 2007, there were 24,833outstanding restricted stock units.

As of March 31, 2007,the aggregate estimated future compensation expense related to unvested optionsoutstanding and the unamortized value of restricted stock units issued is $7.8.This expense will be recognized over a weighted average period of 3.7 years.

**(5)**   Restructuring

***(a)***   Restructuring as aresult of VWR’s acquisition in April 2004

Thefollowing table sets forth the activity associated with the Company’sliabilities for restructuring as a result of VWR’s acquisition, for the threemonths ended March 31, 2007.

| ** **                       | ** ** | **Severance**   | ** ** | ** **     | ** ** | ** ** | ** ** |
|----------------------------------|------------|-----------------|------------|----------------|------------|------------|------------|
| ** **                       | ** ** | **And**         | ** ** | ** **     | ** ** | ** ** | ** ** |
| ** **                       | ** ** | **Termination** | ** ** | **Facilities** | ** ** | ** ** | ** ** |
| ** **                       | ** ** | **benefits**    | ** ** | **related**    | ** ** | **Total**  | ** ** |
| Balance at  January 1, 2007 |       |            | $          | 3.6            |       |       |       | $ | 4.7 |   |   | $ | 8.3 |   |
| Cash payments/other              |       |            | (0.3       | )              |       |       | (0.2       | ) |   | (0.5 | ) |
| Currency translation changes     |       |            | —     |           |       |       | 0.1        |   |   | 0.1 |   |
| Balance at  March 31, 2007  |       |            | $          | 3.3            |       |       |       | $ | 4.6 |   |   | $ | 7.9 |   |

 

***(b)***   Other restructuringactivities

In addition, we initiated cost reduction programs inresponse to relatively static market conditions and implemented reductions inforce and other cost containment measures during 2005. In connection with theseactions, we recorded accruals and charges to operations related to severanceand facility exit costs of $20.6 in the year ended December 31, 2005.

8

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

Thefollowing table sets forth the activity associated with the Company’sliabilities for these cost reduction programs, for the three months ended March 31,2007 and 2006.

| ** **                               | ** ** | **Three Months Ended March 31,** | ** ** |
|------------------------------------------|------------|------------------------------------------------------|------------|
| ** **                               | ** ** | **2007**                                             | ** ** | **2006** | ** ** |
| ** **                               | ** ** | **Severance**                                        | ** ** | ** ** | ** ** | ** ** | ** ** | **Severance** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                               | ** ** | **and**                                              | ** ** | ** ** | ** ** | ** ** | ** ** | **and** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                               | ** ** | **termination**                                      | ** ** | **Facilities** | ** ** | ** ** | ** ** | **termination** | ** ** | **Facilities** | ** ** | ** ** | ** ** |
| ** **                               | ** ** | **benefits**                                         | ** ** | **related** | ** ** | **Total** | ** ** | **benefits** | ** ** | **related** | ** ** | **Total** | ** ** |
| Balance at  beginning of period          |       |                                                 | $          | 1.6 |   |   |   | $ | — |   |   | $ | 1.6 |   |   | $ | 9.8 |   |   |   | $ | 0.3 |   |   | $ | 10.1 |   |
| Accruals credited to earnings by segment |       |                                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| North American Lab                       |       |                                                 | —     |   |   |   | — |   |   | — |   |   | (0.2 | ) |   |   | — |   |   | (0.2 | ) |
| Cash payments/other                      |       |                                                 | (0.3       | ) |   |   | — |   |   | (0.3 | ) |   | (5.4 | ) |   |   | (0.2 | ) |   | (5.6 | ) |
| Currency translation changes             |       |                                                 | —     |   |   |   | — |   |   | — |   |   | — |   |   |   | — |   |   | — |   |
| Balance at end of period                 |       |                                                 | $          | 1.3 |   |   |   | $ | — |   |   | $ | 1.3 |   |   | $ | 4.2 |   |   |   | $ | 0.1 |   |   | $ | 4.3 |   |

 

As of March 31, 2007,$3.4 of our aggregate restructuring liabilities are included in accrued expensesand $5.8 are included in other long-term liabilities. As of December 31,2006, $4.1 of our aggregate restructuring liabilities are included in accruedexpenses and $5.8 are included in other long-term liabilities.

**(6)**   Goodwilland Other Intangible Assets

***(a)***   Goodwill

Goodwillrepresents the excess of costs over fair value of assets of businessesacquired. Changes in the carrying amount of goodwill by segment for the threemonths ended March 31, 2007 are as follows:

| ** **                                                         | ** ** | **North**             | ** ** | **European** | ** ** | **Science**   | ** ** | ** ** | ** ** |
|--------------------------------------------------------------------|------------|-----------------------|------------|--------------|------------|---------------|------------|------------|------------|
| ** **                                                         | ** ** | **American Lab** | ** ** | **Lab**      | ** ** | **Education** | ** ** | **Total**  | ** ** |
| Balance at  January 1, 2007                                   |       |                  | $          | 648.6        |       |          |       | $          | 216.8      |   |   |   | $ | 67.7 |   |   | $ | 933.1 |   |
| Adjustment related to adoption of FIN 48 (See Note  3)             |       |                  | (1.6       | )            |       |          | —     |       |       |   | — |   |   | (1.6 | ) |
| Additional consideration for Sino Chemical Company  (Pte.) Limited |       |                  | 0.1        |         |       |          | —     |       |       |   | — |   |   | 0.1 |   |
| Currency translation changes                                       |       |                  | 1.8        |         |       |          | 3.0        |       |       |   | — |   |   | 4.8 |   |
| Balance at  March 31, 2007                                    |       |                  | $          | 648.9        |       |          |       | $          | 219.8      |   |   |   | $ | 67.7 |   |   | $ | 936.4 |   |

 

9

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

***(b)***   Other IntangibleAssets

Otherintangible assets, net for each of the reporting periods is shown in the tablebelow:

| ** **                                                                                                  | ** ** | **Weighted**     | ** ** | ** **         | ** ** | ** **            | ** ** |
|-------------------------------------------------------------------------------------------------------------|------------|------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                                                                                                  | ** ** | **Average**      | ** ** | ** **         | ** ** | ** **            | ** ** |
| ** **                                                                                                  | ** ** | **Amortization** | ** ** | ** **         | ** ** | ** **            | ** ** |
| ** **                                                                                                  | ** ** | **Period**       | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
| ** **                                                                                                  | ** ** | **(Years)**      | ** ** | **2007**           | ** ** | **2006**              | ** ** |
| Amortizable intangible  assets:                                                                             |       |             |       |               |       |                  |       |   |   |   |   |   |   |
| Customer relationships in North America (net of  accumulated amortization of $22.4 and $20.5, respectively) |       |             | 32.8       |               |       |                  | $          | 223.8 |   |   |   | $ | 225.4 |   |   |
| Customer relationships in Europe (net of accumulated  amortization of $12.6 and $11.4, respectively)        |       |             | 20.3       |               |       |                  | 74.4       |   |   |   | 74.6 |   |   |
| Chemical supply agreements (net of accumulated  amortization of $10.0 and $9.1, respectively)               |       |             | 10.0       |               |       |                  | 23.1       |   |   |   | 23.6 |   |   |
| Other (net of accumulated amortization of $1.1 and  $1.0, respectively)                                     |       |             | 4.3        |               |       |                  | 0.2        |   |   |   | 0.2 |   |   |
| Total amortizable intangible assets (net of  accumulated amortization of $46.1 and $42.0, respectively)     |       |             |       |               |       |                  | 321.5      |   |   |   | 323.8 |   |   |
| Indefinite-lived  intangible assets:                                                                        |       |             |       |               |       |                  |       |   |   |   |   |   |   |
| Trademarks and tradenames                                                                                   |       |             |       |               |       |                  | 229.0      |   |   |   | 228.5 |   |   |
| Total intangible  assets, net                                                                               |       |             |       |               |       |                  | $          | 550.5 |   |   |   | $ | 552.3 |   |   |

 

Amortization expense was$3.9 for both the three months ended March 31, 2007 and 2006.

**(7)**   Debt

Thefollowing is a summary of ourdebt obligations:

| ** **                                       | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
|--------------------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                                       | ** ** | **2007**           | ** ** | **2006**              | ** ** |
| Senior Secured  Credit Facility                  |       |               | $          | 430.0                 |       |   |   | $ | 448.7 |   |   |
| 6.875% Unsecured  Senior Notes due 2012          |       |               | 200.0      |                  |       |   | 200.0 |   |   |
| 8% Unsecured  Senior Subordinated Notes due 2014 |       |               | 320.0      |                  |       |   | 320.0 |   |   |
| 9.625% Senior  Discount Notes due 2015           |       |               | 371.5      |                  |       |   | 362.8 |   |   |
| Senior Floating  Rate Notes due 2011             |       |               | 350.0      |                  |       |   | 350.0 |   |   |
| Bank loans                                       |       |               | 0.2        |                  |       |   | 0.3 |   |   |
| Capital leases                                   |       |               | 5.6        |                  |       |   | 5.8 |   |   |
| Total debt                                       |       |               | 1,677.3    |                  |       |   | 1,687.6 |   |   |
| Less short-term  portion                         |       |               | (1.2       | )                     |       |   | (21.8 | ) |   |
| Total long  term-portion                         |       |               | $          | 1,676.1               |       |   |   | $ | 1,665.8 |   |   |

 

10

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

***(a)***   SeniorSecured Credit Facility

The Senior Secured CreditFacility provides for aggregate maximum borrowings of approximately $580.0under (1) a term loan facility providing for a loan denominated in Eurosin an aggregate principal amount currently outstanding of $136.9 as of March 31, 2007, (2) a term loan facilityproviding for a term loan denominated in U.S. dollars in an aggregate principalamount currently outstanding of $293.1, and (3) a multi-currency revolvingcredit facility, providing for up to $150.0 in multi-currency revolving loans(reduced by the amount of any standby and commercial letters of credit drawnunder that facility) outstanding at any time. Undrawn amounts under themulti-currency revolving credit facility are available on a revolving creditbasis for general corporate purposes. As of March 31,2007, no amount was outstanding under the multi-currency revolving creditfacility, and we had $9.5 of undrawn letters of credit and up to $140.5 of additional debt that could be borrowed asrevolving loans or under standby and commercial letters of credit.

The term loan facilitieswill mature in 2011 and the multi-currency revolving credit facility willmature in 2009. The principal amounts of the term loans are amortized in annualinstallments for the first six years and quarterly installments during theseventh year, subject to adjustment if VWR makes optional or mandatoryprepayments on the term loans.

Subjectto certain exceptions, the Senior Secured Credit Facility is subject tomandatory prepayment and reduction in an amount equal to:

·       Thenet proceeds of (1) any permitted receivables securitization program, (2) certaindebt offerings, (3) certain asset sales and (4) certain insurancerecovery and condemnation events; and

·       50%of VWR’s excess cash flow net of any voluntary principal prepayments (asdefined) for any fiscal year unless certain leverage ratio targets are met.

Mandatory principalprepayments of $20.5 and $44.5 were made in March 2007 and 2006,respectively, based on VWR’s excess cash flow generated in 2006 and 2005,respectively. The $20.5 was included in short-term debt in our consolidatedbalance sheet at December 31, 2006. The required principal prepayment for2006 was reduced partially due to a $60.0 voluntary principal prepayment madein September 2006.

***Security;Guarantees***

The obligations under theSenior Secured Credit Facility are guaranteed by VWR’s parent, CDRV Holdings, Inc.,and certain of VWR’s domestic subsidiaries, as that term is defined in thecredit agreement. The Senior Secured Credit Facility and the guaranteesthereunder are secured by security interests in and pledges of or liens onsubstantially all of the tangible and intangible domestic assets of VWR.

The Senior Secured CreditFacility and the guarantees thereunder are also secured by a pledge of 65% ofthe capital stock of the foreign subsidiary holding companies of CDRV Holdings, Inc.and VWR, which in turn hold the capital stock of certain of our foreignsubsidiaries.

11

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

***Interest***

At our election, the interestrates applicable to the U.S. dollar-denominated term loan can be based on afluctuating rate of interest measured by reference to either (1) anadjusted London inter-bank offered rate, or LIBOR, plus a borrowing margin or (2) analternate base rate, or ABR, plus a borrowing margin. The interest rateapplicable to the Euro-denominated term loan is based on a fluctuating rate ofinterest measured by reference to an adjusted EURIBOR plus a borrowing margin.As of March 31, 2007, the interest rates on the U.S. dollar-denominatedand Euro-denominated term loans were 7.61% and 6.06%, respectively.

***Covenants***

The Senior Secured CreditFacility contains a number of covenants that, among other things, limit orrestrict VWR’s ability to dispose of assets, incur additional indebtedness,incur guarantee obligations, prepay other indebtedness, make acquisitions,engage in mergers or consolidations, change the business conducted as a whole,make capital expenditures, or engage in certain transactions with affiliates.In addition, the Senior Secured Credit Facility requires VWR to comply withspecified financial ratios and tests, including a minimum interest expensecoverage ratio, a maximum leverage ratio and a maximum capital expenditurestest. As of March 31, 2007, VWR was in compliance with all covenants.

***Amendment***

In January 2007, VWRamended certain provisions in the credit agreement to provide VWR with moreflexibility to make dividends or other payments to enable the Company to payCash Interest with respect to the Senior Floating Rate Notes, as describedbelow, and decreased the interest margin it pays on the Euro-denominated termloan by 50 basis points. On March 1, 2007, VWR paid a dividend of $7.4that enabled us to make an interest payment on our Senior Floating Rate Notes.

***(b)***   TheSenior Notes and Senior Subordinated Notes

The 6.875% UnsecuredSenior Notes due 2012 (“Senior Notes”) and 8% Unsecured Senior SubordinatedNotes due 2014 (“Senior Subordinated Notes”) require semiannual cash interestpayments on April 15 and October 15 to holders of record at the closeof business as of the preceding April 1 and October 1. The SeniorSubordinated Notes are subordinated in right of payment to all secured debt ofVWR and the Senior Notes.

The Senior Notes areguaranteed on a senior basis by any significant domestic subsidiary of VWR. TheSenior Subordinated Notes are guaranteed on a senior subordinated basis by anysignificant domestic subsidiary of VWR. As of March 31, 2007, neithernotes were guaranteed by any of VWR’s subsidiaries because none constitute asignificant domestic subsidiary as defined in the indentures for these notes.

These notes contain anumber of covenants which, among other things, limit VWR’s ability to incuradditional indebtedness, make distributions of cash or property, makeacquisitions, engage in transactions with affiliates and incur liens on assets.As of March 31, 2007, VWR was in compliance with all covenants. Upon achange of control, holders of these notes have the right to require VWR torepurchase these notes at a purchase price equal to 101% of principal plusaccrued and unpaid interest through the date of 

12

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

repurchase.Subject to specific terms and conditions contained in the indentures for thesenotes, the Senior Notes and Senior Subordinated Notes are redeemable at VWR’soption prior to maturity.

***(c)***   SeniorDiscount Notes

On December 16, 2004,we issued $481.0 aggregate principal amount at maturity ($299.4 gross proceeds)of Senior Discount Notes due 2015 (“Senior Discount Notes”). The proceeds, netof $1.5 of debt issuance costs, were used to pay a cash dividend to holders ofour common stock in December 2004. In connection with various transactionsinvolving the issuance of the Senior Floating Rate Notes, on December 6,2006, CDRV Investment HoldingsCorporation (“Holdings Corp”) assumed the obligations under the Senior DiscountNotes. We guarantee the Senior Discount Notes on an unsecured seniorsubordinated basis. The Senior Discount Notes are senior unsecured obligationsof Holdings Corp and are structurallysubordinated to all obligations and other liabilities of Holdings Corp’s existing and futuresubsidiaries.

No cash interest willaccrue on the Senior Discount Notes prior to January 1, 2010. Thereafter,cash interest will accrue and be payable semiannually in arrears on January 1,and July 1 of each year, commencing on July 1, 2010, at the rate of 95¤8%per annum, provided that on any interest payment date, interest will be payableonly to the extent of funds actually available for distribution by oursubsidiaries to Holdings Corp underspecified provisions of the indentures governing the Senior Notes and SeniorSubordinated Notes and the Senior Secured Credit Facility covenants.

***(d)******  ******Senior Floating Rate Notes***

On December 14, 2006,we issued $350.0 aggregate principal amount of Senior Floating Rate Notes due2011 (“Senior Floating Rate Notes”). The proceeds from the issuance, net ofrelated expenses, were used to pay a distribution to the holders of our commonstock. The Senior Floating Rate Notes are senior unsecured obligations of theCompany and are structurally subordinated to all obligations and otherliabilities of the Company’s existing and future subsidiaries.

Interest will accrue andbe payable quarterly, commencing March 1, 2007. Interest on the SeniorFloating Rate Notes may be paid (1) entirely in cash (“Cash Interest”), (2) entirelyby increasing the principal amount of the outstanding Senior Floating RateNotes (“PIK Interest”) or (3) 50% as Cash Interest and 50% as PIKInterest. Cash Interest will accrue on the Senior Floating Rate Notes at a rateper annum equal to the applicable LIBOR rate plus the Applicable Spread (asdefined in the agreement) (“Cash Interest Rate”). As of March 31, 2007 theCash Interest Rate was 9.86%. PIK Interest will accrue on the Senior FloatingRate Notes at a rate per annum equal to the Cash Interest Rate plus 75 basispoints.

VWR does not guarantee theobligations under the Senior Discount Notes or the Senior Floating Rate Notes.

**(8)**   DefinedBenefit Plans

VWR sponsors various retirement plans for mostfull-time employees. Pension plan benefits for the defined benefit plans arebased primarily on participants’ compensation and years of credited service. Ithas been VWR’s policy to fund the minimum amount required by local regulations.

13

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

Effective June 1, 2005, the U.S. plan wascurtailed and future benefits were frozen effective May 31, 2005 for mostparticipants. Accordingly, most participants will earn no further benefitsunder the plan after that date.

Netperiodic pension cost for our U.S. plan and our significant Non-U.S. plans inGermany, France and the UK for each of the reporting periods include thefollowing components:

| ** **                      | ** ** | **Three Months Ended March 31,** | ** ** |
|---------------------------------|------------|------------------------------------------------------|------------|
| ** **                      | ** ** | **U.S. Plan**                                   | ** ** | **German, French**

**and UK Plans** | ** ** |
| ** **                      | ** ** | **2007**                                             | ** ** | **2006** | ** ** | **2007** | ** ** | **2006** | ** ** |
| Service cost                    |       | $                                                    | 0.5        |   | $ | 0.7 |   | $ | 0.7 |   | $ | 0.7 |   |
| Interest cost                   |       | 2.2                                                  |       | 2.1 |   | 1.2 |   | 0.9 |   |
| Expected return  on plan assets |       | (2.7                                                 | )          | (2.3 | ) | (1.2 | ) | (0.9 | ) |
| Recognized net  actuarial loss  |       | —                                               |       | 0.1 |   | 0.1 |   | 0.1 |   |
| Net periodic  pension cost      |       | $                                                    | —     |   | $ | 0.6 |   | $ | 0.8 |   | $ | 0.8 |   |

 

The Company madecontributions to the Non-U.S. plans of approximately $0.5 for the three monthsended March 31, 2007, and expects to make additional contributions to theU.S. and Non-U.S. plans of approximately $9.4 during the remainder of 2007.

**(9)**   ComprehensiveIncome

Comprehensiveincome is determined as follows:

| ** **                                           | ** ** | **Three Months Ended**                   | ** ** |
|------------------------------------------------------|------------|----------------------------------------------------|------------|
| ** **                                           | ** ** | **March 31,**                                 | ** ** |
| ** **                                           | ** ** | **   2007    ** | ** ** | **    2006   ** | ** ** |
| Net income                                           |       |                                               | $          | 12.9 |   |   |   | $ | 11.0 |   |   |
| Other  comprehensive income:                         |       |                                               |       |   |   |   |   |   |   |
| Foreign currency translation adjustments             |       |                                               | 6.0        |   |   |   | 6.2 |   |   |
| Unrealized gain on derivatives, net of taxes of $0.3 |       |                                               | —     |   |   |   | 0.5 |   |   |
| Comprehensive income                                 |       |                                               | $          | 18.9 |   |   |   | $ | 17.7 |   |   |

 

**(10)**   Commitmentsand Contingencies

The Company is involved in various environmental,contractual and product liability cases and claims which are considered routineto our business and from time to time we are named as a defendant in cases as aresult of our distribution of scientific supplies, including litigationresulting from the alleged distribution of products containing asbestos by usand certain of our predecessors. While the impact of this litigation hastypically been immaterial, there can be no assurance that the impact of pendingcases, including those described below, and any future claims will not bematerial to our business, financial condition and results of operations in thefuture.

During 2005, the GermanFederal Cartel Office initiated an investigation with regard to our EuropeanDistribution Agreement with Merck KGaA. The purpose of the investigation is todetermine whether this agreement violates or otherwise infringes the generalprohibition of anti-competitive 

14

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

agreementsunder either German or EU rules. The Company submitted information to theGerman Federal Cartel Office in response to its initial request.During 2007, the German Federal Cartel Office has requested additionalinformation that we have provided or are in the process of providing. We cannotassess the likely outcome of the investigation or potential economic impactassociated with an adverse ruling. In connection with VWR’s acquisition in April 2004,we recorded intangible assets related to our European Distribution Agreement withMerck KGaA. As of March 31, 2007, the unamortized net book value of theseintangible assets is approximately $23.1.

On March 28, 2006,the Company was served with a complaint filed in the United States DistrictCourt, Western District of New York, by Corning Incorporated (“Corning”)alleging a breach of contract and unliquidated damages. In April 2006,Corning amended its complaint to allege trademark and unfair competitionclaims. In November 2006, the Court dismissed Corning’s breach of contractclaim, but in March 2007, reconsidered its ruling and has now permittedCorning to proceed with the claim. In January 2007, the Company filedcounterclaims for breach of rebate obligation, unfair competition and tortiousinterference. The Company believes Corning’s claims are without merit and willvigorously defend itself against those claims and pursue its counterclaims.

**(11)**   Segment FinancialInformation

The Company reportsfinancial results on the basis of the following three business segments: NorthAmerican Lab, European Lab and Science Education. The Company’s operatingsegments have been identified giving consideration to both geographic areas andthe nature of products among businesses within its geographic area.

Selectedsegment financial information and reconciliation of reported operating incomeby segment to income before income taxes are presented below. Inter-segmentactivity has been eliminated. Therefore, revenues reported for each operatingsegment are substantially all from external customers.

| ** **                   | ** ** | **Three Months Ended**                         | ** ** |
|------------------------------|------------|----------------------------------------------------------|------------|
| ** **                   | ** ** | **March 31,**                                       | ** ** |
| ** **                   | ** ** | **    2007    ** | ** ** | **    2006    ** | ** ** |
| **Net Sales**                | ** ** |                                                     | ** ** | ** ** |   |   | ** ** | ** ** |   |
| North American Lab           |       |                                                     | $          | 501.4 |   |   |   | $ | 492.2 |   |   |
| European Lab                 |       |                                                     | 313.6      |   |   |   | 272.9 |   |   |
| Science Education            |       |                                                     | 28.1       |   |   |   | 30.7 |   |   |
| Total                        |       |                                                     | $          | 843.1 |   |   |   | $ | 795.8 |   |   |
| **Operating  Income**        | ** ** |                                                     | ** ** | ** ** |   |   | ** ** | ** ** |   |
| North American Lab           |       |                                                     | $          | 32.6 |   |   |   | $ | 29.4 |   |   |
| European Lab                 |       |                                                     | 22.9       |   |   |   | 14.3 |   |   |
| Science Education            |       |                                                     | 1.0        |   |   |   | 2.4 |   |   |
| Total                        |       |                                                     | 56.5       |   |   |   | 46.1 |   |   |
| Interest income              |       |                                                     | (1.7       | ) |   |   | (1.3 | ) |   |
| Interest expense             |       |                                                     | 37.4       |   |   |   | 28.7 |   |   |
| Other (income) expense,  net |       |                                                     | (0.1       | ) |   |   | 0.8 |   |   |
| Income before income taxes   |       |                                                     | $          | 20.9 |   |   |   | $ | 17.9 |   |   |

 

15

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

**(12)**   CondensedConsolidating Financial Information

Holdings Corp was incorporated on November 22,2006 as a direct wholly-owned subsidiary of CDRV. On December 6, 2006,Holdings Corp assumed the obligations under the Senior Discount Notes, andbecame the obligor on the Senior Discount Notes. CDRV has guaranteed the SeniorDiscount Notes on an unsecured senior subordinated basis. On December 14,2006, CDRV issued the Senior Floating Rate Notes and paid a dividend to itsstockholders in December 2006.

The following condensedconsolidating financial information presents the balance sheets at March 31,2007 and December 31, 2006 and statements of operations and cash flows forthe three months ended March 31, 2007 of (1) CDRV, (2) HoldingsCorp, the obligor on the Senior Discount Notes, (3) subsidiaries of theCompany that are not guarantors (the “Non-Guarantor Subsidiaries”), (4) eliminationentries necessary to consolidate CDRV, Holdings Corp and the Non-GuarantorSubsidiaries, and (5) the Company on a consolidated basis.

**CondensedConsolidating Balance SheetMarch 31, 2007**

| ** **                                            | ** ** | ** ** | ** ** | **Holdings** | ** ** | **Non-Guarantor** | ** ** | ** **       | ** ** | **Total**   | ** ** |
|-------------------------------------------------------|------------|------------|------------|--------------|------------|-------------------|------------|------------------|------------|-------------|------------|
| ** **                                            | ** ** | **CDRV**   | ** ** | **Corp**     | ** ** | **Subsidiaries**  | ** ** | **Eliminations** | ** ** | **Company** | ** ** |
| **Assets**                                            | ** ** | ** ** | ** ** |         | ** ** | ** **        |       |             | ** ** | ** **  |       |   | ** ** | ** ** |   | ** ** | ** ** |
| Cash and cash  equivalents                            |       | $          | —     |         |       | $                 | —     | ** **       |       |        | $          | 137.4 |   |   |   | $ | — |   |   | $ | 137.4 |   |
| Trade accounts  receivable, net                       |       | —     |       |         | —     | ** **        |       |             | 478.7      |        |       |   | — |   |   | 478.7 |   |
| Inventories                                           |       | —     |       |         | —     | ** **        |       |             | 255.2      |        |       |   | — |   |   | 255.2 |   |
| Other current assets                                  |       | 19.9       |       |         | —     | ** **        |       |             | 50.9       |        |       |   | (26.2 | ) |   | 44.6 |   |
| Total current assets                                  |       | 19.9       |       |         | —     | ** **        |       |             | 922.2      |        |       |   | (26.2 | ) |   | 915.9 |   |
| Property and equipment,  net                          |       | —     |       |         | —     | ** **        |       |             | 157.2      |        |       |   | — |   |   | 157.2 |   |
| Goodwill                                              |       | —     |       |         | —     | ** **        |       |             | 936.4      |        |       |   | — |   |   | 936.4 |   |
| Other intangible assets,  net                         |       | —     |       |         | —     | ** **        |       |             | 550.5      |        |       |   | — |   |   | 550.5 |   |
| Deferred income taxes                                 |       | 6.1        |       |         | 3.9        | ** **        |       |             | 9.6        |        |       |   | — |   |   | 19.6 |   |
| Investment in  subsidiaries, net                      |       | 410.9      |       |         | 776.8      | ** **        |       |             | —     |        |       |   | (1,187.7 | ) |   | — |   |
| Other assets                                          |       | 5.5        |       |         | 1.2        | ** **        |       |             | 44.1       |        |       |   | — |   |   | 50.8 |   |
| Total assets                                          |       | $          | 442.4      |         |       | $                 | 781.9      | ** **       |       |        | $          | 2,620.0 |   |   |   | $ | (1,213.9 | ) |   | $ | 2,630.4 |   |
| **Liabilities and Stockholders’ Equity**         | ** ** | ** ** | ** ** |         | ** ** | ** **        |       |             | ** ** | ** **  |       |   | ** ** | ** ** |   | ** ** | ** ** |
| Short-term debt                                       |       | $          | —     |         |       | $                 | —     | ** **       |       |        | $          | 20.3 |   |   |   | $ | (19.1 | ) |   | $ | 1.2 |   |
| Accounts payable                                      |       | —     |       |         | —     | ** **        |       |             | 378.2      |        |       |   | — |   |   | 378.2 |   |
| Accrued expenses                                      |       | 9.7        |       |         | —     | ** **        |       |             | 171.4      |        |       |   | (7.1 | ) |   | 174.0 |   |
| Total current  liabilities                            |       | 9.7        |       |         | —     | ** **        |       |             | 569.9      |        |       |   | (26.2 | ) |   | 553.4 |   |
| Long-term debt                                        |       | 350.0      |       |         | 371.5      | ** **        |       |             | 954.6      |        |       |   | — |   |   | 1,676.1 |   |
| Other long-term  liabilities                          |       | —     |       |         | —     | ** **        |       |             | 90.3       |        |       |   | — |   |   | 90.3 |   |
| Deferred income taxes                                 |       | —     |       |         | —     | ** **        |       |             | 227.9      |        |       |   | — |   |   | 227.9 |   |
| Total liabilities                                     |       | 359.7      |       |         | 371.5      | ** **        |       |             | 1,842.7    |        |       |   | (26.2 | ) |   | 2,547.7 |   |
| Common stock purchase  subject to guarantee agreement |       | 0.5        |       |         | —     | ** **        |       |             | 0.5        |        |       |   | (0.5 | ) |   | 0.5 |   |
| Stockholders’ equity                             |       | 82.2       |       |         | 410.4      | ** **        |       |             | 776.8      |        |       |   | (1,187.2 | ) |   | 82.2 |   |
| Total liabilities and stockholders’ equity       |       | $          | 442.4      |         |       | $                 | 781.9      | ** **       |       |        | $          | 2,620.0 |   |   |   | $ | (1,213.9 | ) |   | $ | 2,630.4 |   |

 

16

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

**CondensedConsolidating Balance Sheet December 31, 2006**

| ** **                                            | ** ** | ** ** | ** ** | **Holdings** | ** ** | **Non-Guarantor** | ** ** | ** **       | ** ** | **Total**   | ** ** |
|-------------------------------------------------------|------------|------------|------------|--------------|------------|-------------------|------------|------------------|------------|-------------|------------|
| ** **                                            | ** ** | **CDRV**   | ** ** | **Corp**     | ** ** | **Subsidiaries**  | ** ** | **Eliminations** | ** ** | **Company** | ** ** |
| **Assets**                                            | ** ** | ** ** | ** ** |         | ** ** | ** **        |       |             | ** ** | ** **  |       |   | ** ** | ** ** |   | ** ** | ** ** |
| Cash and cash  equivalents                            |       | $          | 1.3        |         |       | $                 | —     | ** **       |       |        | $          | 138.1 | ** ** |   |   | $ | — |   |   | $ | 139.4 |   |
| Trade accounts  receivable, net                       |       | —     |       |         | —     | ** **        |       |             | 452.7      | ** **  |       |   | — |   |   | 452.7 |   |
| Inventories                                           |       | —     |       |         | —     | ** **        |       |             | 260.6      | ** **  |       |   | — |   |   | 260.6 |   |
| Other current assets                                  |       | 17.1       |       |         | —     | ** **        |       |             | 56.6       | ** **  |       |   | (23.1 | ) |   | 50.6 |   |
| Total current assets                                  |       | 18.4       |       |         | —     | ** **        |       |             | 908.0      | ** **  |       |   | (23.1 | ) |   | 903.3 |   |
| Property and equipment,  net                          |       | —     |       |         | —     | ** **        |       |             | 156.9      | ** **  |       |   | — |   |   | 156.9 |   |
| Goodwill                                              |       | —     |       |         | —     | ** **        |       |             | 933.1      | ** **  |       |   | — |   |   | 933.1 |   |
| Other intangible assets,  net                         |       | —     |       |         | —     | ** **        |       |             | 552.3      | ** **  |       |   | — |   |   | 552.3 |   |
| Deferred income taxes                                 |       | 5.1        |       |         | 0.8        | ** **        |       |             | 7.2        | ** **  |       |   | — |   |   | 13.1 |   |
| Investment in  subsidiaries, net                      |       | 392.4      |       |         | 752.7      | ** **        |       |             | —     | ** **  |       |   | (1,145.1 | ) |   | — |   |
| Other assets                                          |       | 5.8        |       |         | 1.2        | ** **        |       |             | 44.4       | ** **  |       |   | — |   |   | 51.4 |   |
| Total assets                                          |       | $          | 421.7      |         |       | $                 | 754.7      | ** **       |       |        | $          | 2,601.9 | ** ** |   |   | $ | (1,168.2 | ) |   | $ | 2,610.1 |   |
| **Liabilities and Stockholders’ Equity**         | ** ** | ** ** | ** ** |         | ** ** | ** **        |       |             | ** ** | ** **  |       |   | ** ** | ** ** |   | ** ** | ** ** |
| Short-term debt                                       |       | $          | —     |         |       | $                 | —     | ** **       |       |        | $          | 38.3 | ** ** |   |   | $ | (16.5 | ) |   | $ | 21.8 |   |
| Accounts payable                                      |       | —     |       |         | —     | ** **        |       |             | 380.8      | ** **  |       |   | — |   |   | 380.8 |   |
| Accrued expenses                                      |       | 8.3        |       |         | —     | ** **        |       |             | 169.1      | ** **  |       |   | (6.6 | ) |   | 170.8 |   |
| Total current  liabilities                            |       | 8.3        |       |         | —     | ** **        |       |             | 588.2      | ** **  |       |   | (23.1 | ) |   | 573.4 |   |
| Long-term debt                                        |       | 350.0      |       |         | 362.8      | ** **        |       |             | 953.0      | ** **  |       |   | — |   |   | 1,665.8 |   |
| Other long-term  liabilities                          |       | —     |       |         | —     | ** **        |       |             | 80.5       | ** **  |       |   | — |   |   | 80.5 |   |
| Deferred income taxes                                 |       | —     |       |         | —     | ** **        |       |             | 227.0      | ** **  |       |   | — |   |   | 227.0 |   |
| Total liabilities                                     |       | 358.3      |       |         | 362.8      | ** **        |       |             | 1,848.7    | ** **  |       |   | (23.1 | ) |   | 2,546.7 |   |
| Common stock purchase  subject to guarantee agreement |       | 0.5        |       |         | —     | ** **        |       |             | 0.5        | ** **  |       |   | (0.5 | ) |   | 0.5 |   |
| Stockholders’ equity                             |       | 62.9       |       |         | 391.9      | ** **        |       |             | 752.7      | ** **  |       |   | (1,144.6 | ) |   | 62.9 |   |
| Total liabilities and stockholders’ equity       |       | $          | 421.7      |         |       | $                 | 754.7      | ** **       |       |        | $          | 2,601.9 | ** ** |   |   | $ | (1,168.2 | ) |   | $ | 2,610.1 |   |

 

**CondensedConsolidating Statement of OperationsThree Months Ended March 31, 2007**

| ** **                                                                | ** ** | ** ** | ** ** | **Holdings** | ** ** | **Non-Guarantor** | ** ** | ** **       | ** ** | **Total**   | ** ** |
|---------------------------------------------------------------------------|------------|------------|------------|--------------|------------|-------------------|------------|------------------|------------|-------------|------------|
| ** **                                                                | ** ** | **CDRV**   | ** ** | **Corp**     | ** ** | **Subsidiaries**  | ** ** | **Eliminations** | ** ** | **Company** | ** ** |
| Net sales                                                                 |       | $          | —     |         |       | $                 | —     |             |       |        | $          | 843.1 |   |   |   | $ | — |   |   |   | $ | 843.1 |   |   |
| Cost of goods sold                                                        |       | —     |       |         | —     |              |       |             | 604.9      |        |       |   | — |   |   |   | 604.9 |   |   |
| Gross profit                                                              |       | —     |       |         | —     |              |       |             | 238.2      |        |       |   | — |   |   |   | 238.2 |   |   |
| Selling, general and  administrative expenses                             |       | 0.4        |       |         | —     |              |       |             | 181.3      |        |       |   | — |   |   |   | 181.7 |   |   |
| Operating (loss) income                                                   |       | (0.4       | )          |         | —     |              |       |             | 56.9       |        |       |   | — |   |   |   | 56.5 |   |   |
| Interest, net of  interest income                                         |       | 8.6        |       |         | 8.8        |              |       |             | 18.3       |        |       |   | — |   |   |   | 35.7 |   |   |
| Other income, net                                                         |       | —     |       |         | —     |              |       |             | (0.1       | )           |       |   | — |   |   |   | (0.1 | ) |   |
| (Loss) income before  income taxes and equity in earnings of subsidiaries |       | (9.0       | )          |         | (8.8       | )                 |       |             | 38.7       |        |       |   | — |   |   |   | 20.9 |   |   |
| Income tax benefit  (provision)                                           |       | 3.2        |       |         | 3.1        |              |       |             | (14.3      | )           |       |   | — |   |   |   | (8.0 | ) |   |
| Equity in earnings of  subsidiaries, net of tax                           |       | 18.7       |       |         | 24.4       |              |       |             | —     |        |       |   | (43.1 | ) |   |   | — |   |   |
| Net income                                                                |       | $          | 12.9       |         |       | $                 | 18.7       |             |       |        | $          | 24.4 |   |   |   | $ | (43.1 | ) |   |   | $ | 12.9 |   |   |

 

17

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) (Dollars in millions, except share data) (Unaudited)**

**CondensedConsolidating Statement of Cash FlowsThree Months Ended March 31, 2007**

| ** **                                     | ** ** | ** ** | ** ** | **Holdings** | ** ** | **Non-Guarantor** | ** ** | ** **       | ** ** | **Total**   | ** ** |
|------------------------------------------------|------------|------------|------------|--------------|------------|-------------------|------------|------------------|------------|-------------|------------|
| ** **                                     | ** ** | **CDRV**   | ** ** | **Corp**     | ** ** | **Subsidiaries**  | ** ** | **Eliminations** | ** ** | **Company** | ** ** |
| Net cash provided by  operating activities     |       |       | $          | 2.3          |       |              |       | $                | —     |        |       |   | $ | 41.0 |   |   |   | $ | (7.4 | ) |   |   | $ | 35.9 |   |   |
| Cash flows from  investing activities:         |       |       |       |         |       |              |       |             |       |        |       |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures                           |       |       | —     |         |       |              | —     |             |       |        | (5.9       | ) |   |   | — |   |   |   | (5.9 | ) |   |
| Other investing  activities, net               |       |       | (2.6       | )            |       |              | —     |             |       |        | —     |   |   |   | 2.6 |   |   |   | — |   |   |
| Net cash used in  investing activities         |       |       | (2.6       | )            |       |              | —     |             |       |        | (5.9       | ) |   |   | 2.6 |   |   |   | (5.9 | ) |   |
| Cash flows from  financing activities:         |       |       |       |         |       |              |       |             |       |        |       |   |   |   |   |   |   |   |   |   |   |
| Proceeds from debt                             |       |       | —     |         |       |              | —     |             |       |        | 2.7        |   |   |   | (2.6 | ) |   |   | 0.1 |   |   |
| Repayment of debt                              |       |       | —     |         |       |              | —     |             |       |        | (21.0      | ) |   |   | — |   |   |   | (21.0 | ) |   |
| Net change in bank  checks outstanding         |       |       | —     |         |       |              | —     |             |       |        | (10.4      | ) |   |   | — |   |   |   | (10.4 | ) |   |
| Dividend                                       |       |       | —     |         |       |              | —     |             |       |        | (7.4       | ) |   |   | 7.4 |   |   |   | — |   |   |
| Other financing  activities, net               |       |       | (1.0       | )            |       |              | —     |             |       |        | (0.1       | ) |   |   | — |   |   |   | (1.1 | ) |   |
| Net cash used in  financing activities         |       |       | (1.0       | )            |       |              | —     |             |       |        | (36.2      | ) |   |   | 4.8 |   |   |   | (32.4 | ) |   |
| Effect of exchange rate  changes on cash       |       |       | —     |         |       |              | —     |             |       |        | 0.4        |   |   |   | — |   |   |   | 0.4 |   |   |
| Net decrease in cash and  cash equivalents     |       |       | (1.3       | )            |       |              | —     |             |       |        | (0.7       | ) |   |   | — |   |   |   | (2.0 | ) |   |
| Cash and cash  equivalents beginning of period |       |       | 1.3        |         |       |              | —     |             |       |        | 138.1      |   |   |   | — |   |   |   | 139.4 |   |   |
| Cash and cash equivalents end of period        |       |       | $          | —       |       |              |       | $                | —     |        |       |   | $ | 137.4 |   |   |   | $ | — |   |   |   | $ | 137.4 |   |   |

 

**(13)**   SubsequentEvents

We have a 24% investment in KMF Laborchemie HandelsGmbH (“KMF”), which is accounted for using the equity method. On April 2,2007, we acquired the remaining 76% interest in KMF. KMF is a German-basedscientific laboratory supply distribution firm that offers highly diversifiedchemicals and consumable products to the laboratory industry in Germany. Thepurchase price was approximately $21.0.

In April 2007, we sold a facility in Germany forapproximately $2.3. This sale will not have a material impact on our operatingresults.

In April 2007, we notified the trustee for theSenior Floating Rate Notes that we intend to pay Cash Interest for thequarterly payment due June 1, 2007 in accordance with the terms andconditions of the Senior Floating Rate Notes.

On May 2, 2007, we entered into an Agreement andPlan of Merger (the “Merger Agreement”) pursuant to which we will be acquiredby an affiliate of Madison Dearborn Partners, LLC (“MDP”). Under the MergerAgreement, the issued and outstanding shares of our common stock and equityequivalents issued under the Stock Plan will be converted, on the terms setforth in the Merger Agreement, into the right to receive aggregate cash mergerconsideration of approximately $2,196.0, less certain transaction expenses andsubject to certain other adjustments. The merger is expected to be consummatedin the third quarter of 2007, subject to customary closing conditions,including expiration or termination of the waiting period under theHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and certainEuropean antitrust approvals. We have made customary representations andwarranties in the Merger Agreement and agreed to certain pre-closing covenantsin the Merger Agreement, including that we will conduct our business in allmaterial respects in the ordinary course, will not engage in certain types oftransactions during such period, and will assist the MDP affiliate in obtainingits debt financing for the transaction. In addition, the Merger Agreement alsoprovides that, at or immediately prior to the consummation of the merger, wewill and/or will cause our applicable subsidiaries to repay in full allindebtedness outstanding under, and take such other steps as may be necessaryto cause the satisfaction and discharge of all obligations in respect of, theSenior Notes, Senior Subordinated Notes, Senior Discount Notes, Senior FloatingRate Notes, indebtedness under the Senior Secured Credit Facility and certainother of our indebtedness.

18

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**Item 2—*Management’s Discussion and Analysis of Financial Condition and Resultsof Operations***

**Forward-LookingStatements**

This Form 10-Q contains forward-lookingstatements within the meaning of Section 27A of the Securities Act of1933, as amended, and Section 21E of the Securities Exchange Act of 1934,as amended (the “Exchange Act”). All statements other than statements ofhistorical fact included in this Form 10-Q may constituteforward-looking statements. We have based these forward-looking statements onour current expectations and projections about future events. Although webelieve that our assumptions made in connection with the forward-lookingstatements are reasonable, there can be no assurances that the assumptions andexpectations will prove to be correct.

Forward-lookingstatements are inherently subject to risks, uncertainties and assumptions.Forward-looking statements are not guarantees of performance. You should notplace undue reliance on these statements. You should understand that the followingimportant factors, in addition to those discussed in “Item 1A—Risk Factors” inour annual report on Form 10-K for the year ended December 31,2006 and elsewhere in our Form 10-K and in this Form 10-Q,could affect our future results and could cause those results or other outcomesto differ materially from those expressed or implied in our forward-lookingstatements:

·       actionsby manufacturers, customers, carriers and other third parties;

·       ourability to maintain our relationships with manufacturers;

·       lossof our key executive officers;

·       ourability to consummate and integrate potential acquisitions;

·       theeffect of political and economic conditions, inflation and interest ratesworldwide;

·       theeffect of changes in laws and regulations, including changes in accountingstandards, trade, tax, price controls and other regulatory matters;

·       increasedcompetition from other companies in our industry and our ability to retain orincrease our market shares in the principal geographical areas in which we operate;and

·       ourability to generate sufficient funds to meet our debt service obligations,capital expenditure program requirements, ongoing operating costs and workingcapital needs.

All forward-lookingstatements attributable to us or persons acting on our behalf are expresslyqualified in their entirety by the foregoing cautionary statements. You arecautioned not to place undue reliance on the forward-looking statements, whichspeak only as of the date of this Quarterly Report on Form 10-Q. Weundertake no obligations to update or revise publicly any forward-lookingstatements, whether as a result of new information, future events or otherwise.

**Overview**

Our net sales are derived primarily from the sale ofscientific supplies, including chemicals, glassware, instruments, protectiveclothing and other assorted laboratory products and the provision of services,including technical services, on-site storeroom services, warehousing andfurniture design, supply and installation. Freight costs that are billed to ourcustomers are also included in net sales.

Our cost of sales consists primarily of the cost ofinventory shipped and the cost of labor for services. Cost of sales alsoincludes freight expenses incurred to deliver products to customers as well ascredits for rebates earned from suppliers.

19

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Selling, general andadministrative (“SG&A”) expenses primarily reflect the costs of operationsdedicated to generating new sales, maintaining existing customer relationships,enhancing technology capabilities, receiving and processing customer orders andmaintaining our distribution center facilities. These expenses also includedepreciation and amortization.

**Business Segments**

We report our financialresults on the basis of the following three business segments: North AmericanLab, European Lab and Science Education. In addition, we have Asia Pacificoperations, which for purposes of external reporting, are embedded within theNorth American Lab and European Lab segments. Both the North American Lab andEuropean Lab segments are comprised of the distribution of supplies tocustomers in major pharmaceutical, biotechnology, chemical, technology, foodprocessing and consumer products industries, as well as governmental agencies,universities and research institutes, and environmental organizations. ScienceEducation is comprised of the manufacture and distribution of scientificsupplies and specialized kits to primary and secondary schools.

**Constant CurrencyAnalysis**

We maintain operations primarily in North America andin Europe. Approximately 45% of our net sales originated in currencies otherthan the U.S. dollar, principally the Euro, the British pound sterling and theCanadian dollar. As a result, changes in our revenues and operating profitsinclude the impact of changes in foreign currency exchange rates. We provide “constantcurrency” calculations in the following discussion and analysis to remove theimpact of the fluctuation in foreign exchange rates and utilize constantcurrency results in our analysis of segment performance.

We believe that thiscalculation is a useful measure, indicating the actual growth of ouroperations. Earnings from our subsidiaries are not generally repatriated to theUnited States, therefore we do not incur significant gains or losses on foreigncurrency transactions with our subsidiaries. Therefore, changes in foreigncurrency exchange rates primarily impact only reported earnings and not ouractual cash flow or economic condition.

**Compliance with theSarbanes-Oxley Act**

In 2006, we completed aprogram to address the requirements of Section 404 of the Sarbanes-OxleyAct prior to the mandatory compliance date of December 31, 2007.Compliance with these requirements required significant incremental internalresources and financial investments, including, but not limited to, use ofoutside advisors, additional audit fees, and changes in systems design,security and structure.

**Merger Agreement**

On May 2, 2007, weentered into an agreement pursuant to which we will be acquired by an affiliateof MDP. See Note 13 under “Item 1—Financial Statements” for more information.

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**Results ofOperations**

***Net Sales***

Thefollowing table presents net sales and changes in net sales by reportablesegment for the three months ended March 31, 2007 and 2006 (dollars inmillions):

| ** **          | ** ** | **Three Months Ended March 31,** | ** ** |
|---------------------|------------|------------------------------------------------------|------------|
| ** **          | ** ** | **2007**                                             | ** ** | **% Change** | ** ** | **2006** | ** ** |
| North American  Lab |       | $                                                    | 501.4      |   |   | 1.9 | % |   | $ | 492.2 |   |
| European Lab        |       | 313.6                                                |       |   | 14.9 | % |   | 272.9 |   |
| Science Education   |       | 28.1                                                 |       |   | (8.5 | )% |   | 30.7 |   |
| Total               |       | $                                                    | 843.1      |   |   | 5.9 | % |   | $ | 795.8 |   |

 

Net sales for the three months ended March 31,2007 increased $47.3 million over the comparable period of 2006. Foreigncurrency increased net sales by $25.7 million. On a constant currency basis,net sales increased by $21.6 million or 2.7% over the comparable period of2006.

Net sales in our North American Lab segment for thethree months ended March 31, 2007 increased $9.2 million over thecomparable period of 2006. Foreign currency decreased net sales by $0.9million. On a constant currency basis, net sales increased $10.1 million or2.1% over the comparable period of 2006. For the three months ended March 31,2007, our net sales to customers in the pharmaceutical industry experiencedlow-single digit growth and our net sales to customers in industrial marketsachieved mid-single digit growth. Our net sales to our education andbiotechnology customers were relatively flat.

Net sales in our European Lab segment for the threemonths ended March 31, 2007 increased $40.7 million over the comparableperiod of 2006. Foreign currency increased net sales by $26.6 million. On aconstant currency basis, net sales increased $14.1 million or 5.2% over thecomparable period of 2006. For the three months ended March 31, 2007, ournet sales to bio-pharmaceutical customers achieved high-single digit growth,our net sales to industrial and education customers experienced low-singledigit growth, our net sales to clinical customers experienced mid-single digitgrowth and our net sales to resellers were relatively flat.

Net sales in our ScienceEducation segment for the three months ended March 31, 2007 decreased $2.6million or 8.5% from the comparable period of 2006. This decrease was primarilya result of a decline in net sales to our publisher customers and a decline inour international business due to the fulfillment of two large internationalorders in 2006. Net sales to our consumer customers were relatively flat.

***Gross Profit***

Thefollowing table presents gross profit and gross profit as a percentage of netsales for the three months ended March 31, 2007 and 2006 (dollars inmillions):

| ** **                              | ** ** | **Three Months Ended**                         | ** ** |
|-----------------------------------------|------------|----------------------------------------------------------|------------|
| ** **                              | ** ** | **March 31,**                                       | ** ** |
| ** **                              | ** ** | **    2007    ** | ** ** | **    2006    ** | ** ** |
| Gross profit                            |       |                                                     | $          | 238.2 |   |   |   | $ | 214.4 |   |   |
| Percentage of net sales  (gross margin) |       |                                                     | 28.3       | % |   |   | 26.9 | % |   |

 

Gross profit for the threemonths ended March 31, 2007 increased $23.8 million over the comparableperiod of 2006. Foreign currency increased gross profit by $8.5 million. On aconstant currency basis, gross profit increased $15.3 million or 7.1% from thecomparable period of 2006. The increases in gross profit in both our NorthAmerican Lab and European Lab segments are primarily a result of favorablepricing, better mix and improved recovery of freight costs, especially in ourEuropean Lab segment. These 

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increasesare partially offset by a decrease in gross profit in our Science Educationsegment of $1.1 million primarily as a result of the decreased net salesdiscussed above.

***Selling, General, and Administrative Expenses***

Thefollowing table presents SG&A expenses and SG&A expenses as apercentage of net sales forthe three months ended March 31, 2007 and 2006 (dollars in millions):

| ** **                                    | ** ** | **Three Months Ended**                         | ** ** |
|-----------------------------------------------|------------|----------------------------------------------------------|------------|
| ** **                                    | ** ** | **March 31,**                                       | ** ** |
| ** **                                    | ** ** | **    2007    ** | ** ** | **    2006    ** | ** ** |
| Selling, general  and administrative expenses |       |                                                     | $          | 181.7 |   |   |   | $ | 168.5 |   |   |
| Percentage of net sales                       |       |                                                     | 21.6       | % |   |   | 21.2 | % |   |

 

SG&A for the threemonths ended March 31, 2007 increased $13.2 million over the comparableperiod of 2006. Foreign currency increased SG&A by $4.4 million. On aconstant currency basis, SG&A increased $8.8 million or 5.2% from thecomparable period of 2006 primarily as a result of inflation and partially dueto increased costs related to our global sourcing/category managementinitiatives and on-going expansion in Asia Pacific. Partially offsetting these increasesare cost savings derived from improved efficiencies in our service anddistribution centers, particularly in our in our North American Lab segment.

***Operating Income***

Thefollowing table presents operating income and operating income as a percentageof net sales by reportable segment for the three months ended March 31,2007 and 2006 (dollars in millions):

| ** **          | ** ** | **Three Months Ended March 31,** | ** ** |
|---------------------|------------|------------------------------------------------------|------------|
| ** **          | ** ** | ** **                                           | ** ** | **% of** | ** ** | ** ** | ** ** | **% of** | ** ** |
| ** **          | ** ** | **2007**                                             | ** ** | **Net Sales** | ** ** | **2006** | ** ** | **Net Sales** | ** ** |
| North American  Lab |       | $                                                    | 32.6       |   |   | 6.5 | % |   | $ | 29.4 |   |   | 6.0 | % |   |
| European Lab        |       | 22.9                                                 |       |   | 7.3 | % |   | 14.3 |   |   | 5.2 | % |   |
| Science Education   |       | 1.0                                                  |       |   | 3.6 | % |   | 2.4 |   |   | 7.8 | % |   |
| Total               |       | $                                                    | 56.5       |   |   | 6.7 | % |   | $ | 46.1 |   |   | 5.8 | % |   |

 

Operating income for the three months ended March 31, 2007 increased $10.4million over the comparable period of2006. Foreign currency increased operating income by $4.1 million. On aconstant currency basis, operating income increased $6.3 million or 13.7% from the comparable period of 2006. Thisincrease was primarily the result of a gross profit increase of $15.3million, partially offset by an SG&A increase of $8.8 million.

Operating income in our North American Lab segment for the three months ended March 31,2007 increased $3.2 million overthe comparable period of 2006. Foreign currency increased operatingincome by $2.2 million. On a constant currency basis, operating income increased $1.0 million or 3.4% from thecomparable period of 2006. This increase was primarily the result of agross profit increase of $7.0 million, partially offset by an SG&A increaseof $5.8 million.

Operating income in our European Lab segment for the three months ended March 31, 2007 increased $8.6 million over thecomparable period of 2006. Foreign currency increased operating incomeby $1.9 million. On a constant currency basis, operating income increased $6.7 million or 46.9% from thecomparable period of 2006. This increase was the result of a grossprofit increase of $9.4 million, partially offset by an SG&A increase of$2.7 million.

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Operating income in ourScience Education segment for the three months ended March 31, 2007decreased $1.4 million from the comparable period of 2006. The decrease was theresult of a gross profit decrease of $1.1 million and an SG&A increase of$0.3 million.

***Interest Expense, net of Interest Income***

Interest expense, net ofinterest income, for the three months ended March 31, 2007 increased to$35.7 million from $27.4 million for the comparable period of 2006. Theincrease is due to interest on the Senior Floating Rate Notes issued in December 2006and higher variable interest rates on the Senior Secured Credit Facility termloans, partially offset by decreased amounts outstanding under the SeniorSecured Credit Facility term loans due to prepayments made and increasedinterest income.

***Other (income) expense, net***

Other (income) expense,net was ($0.1) million for the three months ended March 31, 2007 comparedto $0.8 million for the comparable period of 2006. Other income, net for thethree months ended March 31, 2007 includes equity income of ($0.4)million, partially offset by net exchange losses of $0.3 million. Otherexpense, net for the three months ended March 31, 2006 includes netexchange losses of $1.0 million, partially offset by equity income of ($0.1)million.

***Income Taxes***

The effective income tax ratefor the three months ended March 31, 2007 was 38.1% compared to 38.8% forthe comparable period of 2006. The decrease in the 2007 rate is primarily aresult of changes in the geographical mix of earnings.

**Liquidity andCapital Resources**

We broadly define liquidity as our ability to generatesufficient funds from both internal and external sources to meet ourobligations and commitments. In addition, liquidity includes the ability toobtain appropriate debt and equity financing. Therefore, liquidity cannot beconsidered separately from capital resources that consist of current orpotentially available funds for use in achieving long-range objectives andmeeting debt service commitments.

Our significant liquidity and capital funding needsare working capital, operating expenses, capital expenditures and amounts dueon our debt obligations. Based on current operations and expectations as tofuture growth, we believe that cash generated from operations, together withamounts available under the $150.0 million five year multi-currency revolvingcredit facility, which is a component of the Senior Secured Credit Facility,will be adequate to permit us to meet our debt service obligations, capitalexpenditure program requirements, ongoing operating costs and working capitalneeds, although no assurance can be given in this regard.

Working capital, excluding cash and debt, was $226.3million and $212.3 million at March 31, 2007 and December 31, 2006,respectively. Trade receivables, inventories and accounts payable, threeimportant elements of working capital, are discussed below.

***Trade AccountsReceivable.***   Days sales outstanding inaccounts receivable were 51.1**daysand 50.2 days for the quarterly periods ended March 31, 2007 and December 31,2006, respectively. Days sales outstanding are higher in Europe due to theextended payment practices in certain countries in which we operate.

***Inventories.***   Dayssupply of inventory were 38.0**daysand 39.8 days for the quarterly periods ended March 31, 2007 and December 31,2006, respectively. The improvement is due to focused efforts to reduce ourinventories on hand.

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***Accounts Payable.***   Dayspayables outstanding were 56.3**daysand 58.1 days for the quarterly periods ended March 31, 2007 and December 31,2006, respectively. Trade accounts payable are primarily with suppliers whoseproducts we distribute. Payment terms are negotiated and in cases whereeconomic early payment discounts are offered, we typically time our payments toearn the discounts. Days payables outstanding are generally higher in Europedue to the extended payment practices in certain countries in which we operate.Depending on the timing of payments and inventory purchases, trade accountspayable can vary each quarter and from year to year.

**Historical CashFlows**

Thefollowing table presents cash flow from operations before investing andfinancing activities related to operations and working capital (dollars inmillions):

| ** **                                            | ** ** | **Three Months Ended**                                                 | ** ** |
|-------------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|
| ** **                                            | ** ** | **March 31,**                                                               | ** ** |
| ** **                                            | ** ** | **      2007      ** | ** ** | **      2006      ** | ** ** |
| Cash flow from  operations, excluding working capital |       |                                                                             | $          | 35.8 |   |   |   | $ | 29.3 |   |   |
| Cash flow from  working capital changes, net          |       |                                                                             | 0.1        |   |   |   | 27.9 |   |   |
| Cash flow from  operations                            |       |                                                                             | $          | 35.9 |   |   |   | $ | 57.2 |   |   |

 

We generated $35.9 million of cash flow fromoperations during the three months ended March 31, 2007 compared to $57.2million during the comparable period of 2006. The decrease in cash flow fromoperations is primarily the result of lower cash flow from working capitalchanges due primarily to lower cash flows from accounts payable and higherbonus payments in the current period that is partially offset by an increase innet income.

Net cash used in investing activities was $5.9 millionfor the three months ended March 31, 2007 compared to $4.8 million for thecomparable period of 2006. This increase is due to higher capital expenditures.

Net cash used in financing activities was $32.4million for the three months ended March 31, 2007 compared to $55.4million for the comparable period of 2006. This decrease is primarily due todecreased net debt payments of $24.3 million.

As of March 31, 2007, we had outstandingindebtedness of $1,677.3 million, which consists primarily of $520.0 millionaggregate principal amount of Senior Notes and Senior Subordinated Notes, $371.5million of accreted value of the Senior Discount Notes, $350.0 million ofSenior Floating Rates Notes, a $293.1 million U.S. dollar-denominated termloan, and a $136.9 million Euro-denominated term loan.

As of March 31, 2007, we had $9.5 million of outstandingbut undrawn letters of credit and our remaining borrowing availability underthe $150.0 million multi-currency revolving credit facility forming part of theSenior Secured Credit Facility was $140.5 million. Undrawn amounts under themulti-currency revolving credit facility will be available to meet futureworking capital and our business needs. Any potential borrowings under themulti-currency revolving credit facility bear interest at variable rates;interest expense for any such borrowings would fluctuate as well.

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Under the credit agreement for the Senior SecuredCredit Facility, VWR’s excess cash flow (as defined in the credit agreement)from the prior year is required to be used to prepay credit agreement debt. Mandatoryprincipal prepayments of $20.5 million and $44.5 million were made in March 2007and 2006, respectively, based on VWR’s excess cash flow generated in 2006 and2005, respectively. The required principal prepayment for 2006 was reducedpartially due to a $60.0 million voluntary principal prepayment made in September 2006.

Based upon currentoperating levels and expectations as to future growth, we believe that cash onhand, cash generated from operations and amounts available under our $150.0million multi-currency revolving credit facility will be adequate to permit usto meet our debt service obligations, capital expenditure requirements, ongoingoperating costs and working capital needs until the maturity of the SeniorSecured Credit Facility, although no assurance can be given in this regard. Ourfuture financial and operating performance, ability to service or refinance ourdebt and ability to comply with covenants and restrictions contained in ourdebt agreements will be subject to future economic conditions and to financial,business and other factors, many of which are beyond our control and will besubstantially dependent on the global economy, demand for our products, and ourability to successfully implement our overall business and profitabilitystrategies. As of March 31, 2007, we had $137.4 million of cash and cashequivalents on hand.

**Indebtedness**

***The Merger Agreement provides that, at or immediately priorto the consummation of the merger, we will and/or will cause our applicablesubsidiaries to repay in full all indebtedness outstanding under, and take suchother steps as may be necessary to cause the satisfaction and discharge of allobligations in respect of, the Senior Notes, Senior Subordinated Notes, SeniorDiscount Notes, Senior Floating Rate Notes, indebtedness under the Senior SecuredCredit Facility and certain other of our indebtedness.***

***See Note 13 under “Item 1—Financial Statements”for more information.***

***Senior SecuredCredit Facility.  ***The Senior Secured CreditFacility consists of (1) a term loan facility providing for a loan denominatedin Euros, in an aggregate principal amount currently outstanding of $136.9million as of March 31, 2007, (2) a term loan facility providing fora term loan denominated in U.S. dollars in an aggregate principal amountoutstanding of $293.1 million, and (3) a multi-currency revolving creditfacility, providing for up to $150.0 million in multi-currency revolving loans(reduced by the amount of any standby and commercial letters of credit drawnunder that facility) outstanding at any time.

Borrowings under the Senior Secured Credit Facilityare a key source of our liquidity. VWR’s ability to borrow under the SeniorSecured Credit Facility is dependent upon, among other things, VWR’s compliancewith the financial covenants that limit VWR’s ability to incur additionalindebtedness, pay cash dividends and make certain other payments as set forthin the credit agreement for the Senior Secured Credit Facility. The financialcovenants include a specified debt to Credit Agreement EBITDA leverage ratioand a specified Credit Agreement EBITDA to interest expense coverage ratio forspecified periods, as those are defined and relate to VWR. Failure of VWR tocomply with these financial ratio covenants would result in a default under thecredit agreement for the Senior Secured Credit Facility and, absent a waiver oran amendment from our lenders, would permit the acceleration of all outstandingborrowings under the Senior Secured Credit Facility. VWR was in compliance withthese financial covenants as of March 31, 2007.

Credit Agreement EBITDA as presented herein is a VWRfinancial performance measure that is used in the credit agreement for theSenior Secured Credit Facility. Credit Agreement EBITDA is not a defined termunder U.S. GAAP and should not be considered as an alternative to operatingincome or net income as a measure of operating results or cash flows as ameasure of liquidity. Credit Agreement EBITDA differs from the term “EBITDA” asit is commonly used as a non-GAAP financial measure. 

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Credit Agreement EBITDAgenerally is defined as consolidated income before consolidated net interestexpense, consolidated income taxes, consolidated depreciation and amortization,other non-cash charges deducted in determining consolidated net income (loss),non-cash provisions for reserves for discontinued operations, extraordinary,unusual or non-recurring items, gain or loss associated with the sale or writedown of assets not in the ordinary course of business and the cumulative effectof accounting changes and earnings of, but including cash dividends ordistributions from, non-controlled affiliates. Credit Agreement EBITDA isreduced by the amount of certain permitted dividends from VWR to CDRV Holdings, Inc.

Credit Agreement EBITDA is not a financial measureused in the covenants under the indentures for the notes. The term “ConsolidatedEBITDA” is used in the indentures as part of the calculation of the term “ConsolidatedCoverage Ratio,” which is used for a number of purposes, including determiningour ability to incur additional indebtedness and pay cash dividends and makecertain other restricted payments, and may include certain cost savings orsynergies. “Consolidated EBITDA” is not the same as Credit Agreement EBITDA.

Thefollowing table presents a calculation of VWR’s Credit Agreement EBITDA for thetwelve months ended March 31, 2007 (dollars in millions):

| Net income(1)                                           |   | $    | 77.0   |   |
|---------------------------------------------------------|--------|------|--------|--------|
| Income tax  provision(1)                                |   | 48.8 |   |
| Interest expense,  net(1)                               |   | 75.5 |   |
| Depreciation and  amortization(1)                       |   | 43.2 |   |
| Non-cash  charges(2)                                    |   | 11.4 |   |
| Other  extraordinary, unusual or non-recurring items(3) |   | 1.9  |   |
| Credit Agreement EBITDA                                 |   | $    | 257.8  |   |

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(1)          These amounts includethe four quarters during the twelve months ended March 31, 2007 asreported in the respective Form 10-Q or Form 10-K.

(2)          Non-cash charges includepension, post-retirement and post-employment benefit expenses, net of cashcontributed to the respective benefit plans in that year; amortization ofdirect response catalog costs for those catalogs with useful lives greater thanone year; charges for equity compensation; and LIFO adjustments.

(3)          Other extraordinary,unusual or non-recurring items include one-time severance costs; non-routineinventory reserve adjustments; gains or losses on the sale of businesses orfacilities; and other extraordinary, unusual or non-recurring gains, losses,charges or credits.

Thefinancial covenants specify, among other things, the following requirements foreach four-quarter period ended during the following test periods:

| ** **                                          | ** ** | **Consolidated Debt to**  | ** ** | **Credit Agreement EBITDA** | ** ** |
|-----------------------------------------------------|------------|-------------------------------------|------------|---------------------------------------|------------|
| ** **                                          | ** ** | **Credit Agreement**           | ** ** | **to Credit Agreement**     | ** ** |
| ** **                                          | ** ** | **EBITDA Leverage Ratio** | ** ** | **Interest Expense Ratio**  | ** ** |
| **Test Period**                                | ** ** | ** **                          | ** ** | **Not More Than**           | ** ** | **Not Less Than** | ** ** |
| December 31,  2006–December 30, 2007 |       |                                | 6.5 to 1.0 |                                  |       |   | 2.0 to 1.0 |   |   |
| December 31,  2007–December 30, 2008 |       |                                | 6.0 to 1.0 |                                  |       |   | 2.1 to 1.0 |   |   |
| December 31,  2008–December 30, 2009 |       |                                | 5.5 to 1.0 |                                  |       |   | 2.2 to 1.0 |   |   |
| December 31,  2009–December 30, 2010 |       |                                | 5.0 to 1.0 |                                  |       |   | 2.3 to 1.0 |   |   |
| December 31, 2010  and thereafter              |       |                                | 5.0 to 1.0 |                                  |       |   | 2.4 to 1.0 |   |   |
|                                                     |            |                                     |            |                                       |            |  |  |  |  |  |  |

 

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Thetable below sets forth VWR’s specified debt to Credit Agreement EBITDA leverageratio and Credit Agreement EBITDA to interest expense ratio for the twelvemonths ended March 31, 2007:

| Consolidated Debt  to Credit Agreement EBITDA Leverage Ratio            |   | 3.8 to 1.0 |   |
|-------------------------------------------------------------------------|--------|------------|--------|
| Credit Agreement EBITDA  to Credit Agreement Interest expense  Ratio(1) |   | 3.7 to 1.0 |   |

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(1)          For purposes ofcalculating the compliance ratio noted above, credit agreement interest expensewas based on actual interest expense, net of interest income, reduced byamortization of deferred financing fees.

As noted above, the creditagreement for the Senior Secured Credit Facility restricts VWR’s ability totransfer assets, pay cash dividends and make certain other payments to itsdirect or indirect parent companies. In January 2007, VWR amendedprovisions in the credit agreement to conform them in certain respects to theprovisions in the indentures governing the Senior Notes and Senior SubordinatedNotes (described below), including the indebtedness, restricted payments andinvestments covenants. The modifications permit VWR to pay or make specifiedcash dividends, payments or distributions to allow us to make cash interestpayments on the Senior Floating Rate Notesandto make other payments, subject to the indenture governing such notes. In addition, as part of the amendment to thecredit agreement, the interest margin on the Euro-denominated term loan wasdecreased by 50 basis points.

***Foreign Subsidiaries.***   Ourforeign subsidiaries operate from time to time with and without formal lines ofcredit with local banks. The borrowings available to and drawn from time totime by our foreign subsidiaries are limited in aggregate by certain covenantscontained within the Senior Secured Credit Facility.

***Senior and Senior Subordinated Notes.******  ***The SeniorNotes and Senior Subordinated Notes mature on April 15, 2012 and April 15,2014, respectively, in aggregate principal amounts of $200.0 million and $320.0million, respectively. The indentures governing the Senior Notes and SeniorSubordinated Notes contain certain covenants that, among other requirements,limit VWR’s ability to incur additional indebtedness and liens against VWR’sproperty and assets, limit VWR’s ability to transfer assets, pay cash dividendsand make certain other restricted payments (unless certain conditions are met),and limit VWR’s ability to sell assets or restrict the use of the proceedstherefrom. At March 31, 2007, VWR was in compliance with all covenantsunder these indentures.

***Senior Discount Notes.***   InDecember 2004, we issued $481.0 million aggregate principal amount atmaturity ($297.9 million in net proceeds) of 95¤8% SeniorDiscount Notes due 2015. In connection with various transactions involving theissuance of the Senior Floating Rate Notes in December 2006, Holdings Corp,a wholly-owned subsidiary, assumed the obligations under the Senior DiscountNotes. The Senior Discount Notes are senior unsecured obligations of Holdings Corpand are structurally subordinated to all obligations and other liabilities of HoldingsCorp’s existing and future subsidiaries. No cash interest will accrue on theSenior Discount Notes prior to January 1, 2010. Thereafter, cash interestwill accrue and be payable semiannually, only to the extent of funds actuallyavailable for distribution by our subsidiaries to Holdings Corp under specifiedprovisions of the indentures governing our Senior Notes and Senior SubordinatedNotes and the Senior Secured Credit Facility covenants. As of March 31,2007, the accreted value of the Senior Discount Notes was $371.5 million.

***Senior Floating Rate Notes.***   InDecember 2006, we issued $350.0 million aggregate principal amount ofSenior Floating Rate Notes due 2011. The Senior Floating Rate Notes are seniorunsecured obligations of the Company and are structurally subordinated to allobligations and other liabilities of the Company’s existing and futuresubsidiaries. Interest is payable quarterly. Interest on the Senior FloatingRate Notes may be paid (1) entirely in cash (“Cash Interest”), (2) entirelyby increasing the principal amount of the outstanding Senior Floating RateNotes (“PIK Interest”) or (3) 50% as Cash Interest and 50% as PIK 

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Interest. CashInterest will accrue on the Senior Floating Rate Notes at a rate per annumequal to an applicable LIBOR plus an applicable spread (as defined in theagreement) (“Cash Interest Rate”). PIK Interest will accrue on the SeniorFloating Rate Notes at a rate per annum equal to the Cash Interest Rate plus 75basis points.

VWR does not guarantee theobligations under the Senior Discount Notes or Senior Floating Rate Notes. Theterms of the Senior Secured Credit Facility and the indentures governing theSenior Notes and Senior Subordinated Notes significantly restrict VWR frommaking distributions and otherwise transferring assets to its direct orindirect parent companies. However, in January 2007, VWR amended theprovisions of the credit agreement for the Senior Secured Credit Facility toprovide VWR with more flexibility to makedividends or other payments to enable us to pay Cash Interest with respect tothe Senior Floating Rate Notes. On March 1,2007, VWR paid a dividend of $7.4 million that enabled us to make a CashInterest payment of $7.4 million with respect to the Senior Floating RateNotes. In April 2007, we notified the trustee for the SeniorFloating Rate Notes that we intend to pay Cash Interest for the quarterlypayment due June 1, 2007 in accordance with the terms and conditions ofthe Senior Floating Rate Notes.

**Critical Accounting Policies**

The discussion andanalysis of our financial condition and results of operations are based on ourfinancial statements, which have been prepared in accordance with accountingprinciples generally accepted in the United States of America. The preparationof these financial statements requires us to make estimates and assumptionsthat affect the reported amounts of assets and liabilities and the disclosureof contingent assets and liabilities at the date of the financial statementsand the reported amounts of revenues and expenses during the reporting period. Onan ongoing basis, management evaluates its estimates and judgments, including,among others, those related to environmental liabilities, reserves for accountsreceivable and inventories, impairment of goodwill and intangible assets,pension plans, rebates from suppliers, agreements with customers, and productliability. Those estimates and assumptions are based on our historicalexperience, our observance of trends in the industry, and various other factorsthat are believed to be reasonable under the circumstances and form the basisfor making judgments about the carrying values of assets and liabilities thatare not readily apparent from other sources. Actual results may differ fromthese estimates under different assumptions or conditions. Refer to “Item 7—Management’sDiscussion and Analysis of Financial Condition and Results of Operations” inour Annual Report on Form 10-K for the year ended December 31,2006 for the Company’s critical accounting policies.

**Item3—*Quantitative and Qualitative Disclosures aboutMarket Risk***

Refer to “Item 7A—Quantitativeand Qualitative Disclosures about Market Risk” included in our Annual Report onForm 10-K for the year ended December 31, 2006 for the Company’squantitative and qualitative disclosure about market risk. There was nomaterial change in such information as of March 31, 2007.

**Item4—*Controls and Procedures***

The Company’s management,with the participation of the Company’s Chief Executive Officer and ChiefFinancial Officer, evaluated the effectiveness of the Company’s disclosurecontrols and procedures as of March 31, 2007. The term “disclosurecontrols and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) underthe Exchange Act, means controls and other procedures of a company that aredesigned to ensure that information required to be disclosed by a company inthe reports that it files or submits under the Exchange Act is recorded,processed, summarized and reported, within the time periods specified in theSEC’s rules and forms.

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Disclosure controls and procedures include, withoutlimitation, controls and procedures designed to ensure that informationrequired to be disclosed by a company in the reports that it files or submitsunder the Exchange Act is accumulated and communicated to the company’smanagement, including its principal executive and principal financial officers,as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls andprocedures, no matter how well designed and operated, can provide onlyreasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the cost-benefit relationship of possiblecontrols and procedures. Based on the evaluation of the Company’s disclosurecontrols and procedures as of March 31, 2007, the Company’s ChiefExecutive Officer and Chief Financial Officer concluded that, as of such date,the Company’s disclosure controls and procedures were effective at thereasonable assurance level.

There have been no changesin the Company’s internal control over financial reporting (as defined inExchange Act Rules 13a-15(f) and 15d-15(f)) during thefiscal quarter ended March 31, 2007, that have materially affected or arereasonably likely to materially affect the Company’s internal control overfinancial reporting.

**Part II—OTHERINFORMATION**

**Item 1—*Legal Proceedings***

For information regardinglegal proceedings, see Note 10 in “Item 1—Financial Statements” of thisquarterly report on Form 10-Q, which information is incorporatedherein by reference into this item.

**Item 1A—*Risk Factors***

There have been nomaterial changes to the risk factors that are included in our Annual Report on Form 10-Kfor the year ended December 31, 2006 that could affect our business, resultsof operations and financial condition.

**Item 6—*Exhibits***

| Exhibit  Number | ** ** | **Description of Documents**                                                                                                                                                      | ** ** | **Method of Filing** | ** ** | ** ** |
|-----------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------|------------|------------|
| 10.1            |       | VWR  International, Inc. Nonqualified Deferred Compensation Plan, effective  May 1, 2007                                                                                |       | Filed herewith.      |
| 10.2            |       | VWR  International, Inc. Nonqualified Deferred Compensation Plan Trust  Agreement, dated as of May 1, 2007, between VWR International, Inc.  and Wells Fargo, N.A. |       | Filed herewith.      |
| 31.1            |       | Certification of  Principal Executive Officer pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002.                                                                    |       | Filed herewith.      |
| 31.2            |       | Certification of  Principal Financial Officer pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002.                                                                    |       | Filed herewith.      |
| 32.1            |       | Certification of  Principal Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of  the Sarbanes-Oxley Act of 2002).                                                   |       | Furnished  herewith. |
| 32.2            |       | Certification of  Principal Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of  the Sarbanes-Oxley Act of 2002).                                                   |       | Furnished herewith.  |

 

 

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**SIGNATURE**

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

|   | CDRV INVESTORS, INC. |   |
|--------|----------------------|--------|
|   |                 |   |
|   |                 |   |
|   | By:                  |   |   |   |
|   |                 |   | /s/ GREGORY L.  COWAN |
|   |                 |   | Name: | Gregory L. Cowan |
|   |                 |   | Title: | Vice President and Corporate Controller (Chief  Accounting Officer and Duly Authorized Officer) |
|        |                      |        |  |  |  |

May 14, 2007

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