##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




---

Form 10-Q



---

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30,
2002

Commission file number: 01-10920



---

Fisher Scientific International Inc.

(Exact name of registrant as specified in its
charter.)


|                                                                                        |  |                                         
|--------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                |  | 02-0451017                              
|(State or other jurisdiction of
    Incorporation or organization)                      |  | (I.R.S. Employer
    Identification No.)
|                                                                                       
|One Liberty Lane
    Hampton, New Hampshire(Address of principal executive
    offices) |  | 03842(Zip Code)                         

Registrants telephone number, including
area code: (603) 926-5911



---

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days:     Yes þ          No o

The number of shares of Common Stock outstanding
at July 31, 2002 was 54,558,275.



---






---

TABLE OF CONTENTS



|                                                                            |                                                                                                 |  |  |  |  |  |  | 
|--------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART 1 -- FINANCIAL INFORMATION                                            
|                                                                            | Item 1 -- Financial Statements                                                                 
|INTRODUCTION TO THE FINANCIAL STATEMENTS                                   
|STATEMENT OF OPERATIONS                                                    
|BALANCE SHEET                                                              
|STATEMENT OF CASH FLOWS                                                    
|STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY AND OTHER COMPREHENSIVE INCOME
|NOTES TO FINANCIAL STATEMENTS                                              
|                                                                            | Item 2 -- Managements Discussion and Analysis of Results of Operations and Financial Condition
|                                                                            | Item 3 -- Quantitative and Qualitative Disclosures About Market Risk                           
|PART II -- OTHER INFORMATION                                               
|                                                                            | Item 4 -- Submission of Matters to a Vote of Security Holders                                  
|                                                                            | Item 6 -- Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                                                                  



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.

FORM 10-Q

For the Quarter Ended June 30, 2002


INDEX

|                                    |          |                                                                                                                      |                                                                                           |      |   |    | 
|----------------------------------- | -------- | -------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ---- | - | -- | 
|                                    |          |                                                                                                                      |                                                                                           | Page
|                                    |          |                                                                                                                      |                                                                                           | No. 
|                                    |          |                                                                                                                      |                                                                                           |     
|Part I  FINANCIAL
    INFORMATION: |          |                                                                                                                      |                                                                                           |     
|                                    | Item 1  |                                                                                                                      | Financial Statements:                                                                     |      |   |    | 
|                                    |          | Introduction to the Financial Statements                                                                             |                                                                                           |      | 2 |   
|                                    |          | Statement of Operations  Three and Six
    Months Ended June 30, 2002 and 2001                                      |                                                                                           |      | 3 |   
|                                    |          | Balance Sheet  June 30, 2002 and
    December 31, 2001                                                              |                                                                                           |      | 4 |   
|                                    |          | Statement of Cash Flows  Six Months
    Ended June 30, 2002 and 2001                                                |                                                                                           |      | 5 |   
|                                    |          | Statement of Changes in Stockholders Equity
    and Other Comprehensive Income  Six Months Ended
    June 30, 2002 |                                                                                           |      | 6 |   
|                                    |          | Notes to Financial Statements                                                                                        |                                                                                           |      | 7 |   
|                                    | Item 2  |                                                                                                                      | Managements Discussion and Analysis of
    Results of Operations and Financial Condition |      |   | 14 | 
|                                    | Item 3  |                                                                                                                      | Quantitative and Qualitative Disclosures About
    Market Risk                            |      |   | 20 | 
|Part II  OTHER
    INFORMATION:    |          |                                                                                                                      |                                                                                           |     
|                                    | Item 4  |                                                                                                                      | Submission of Matters to a Vote of Security
    Holders                                   |      |   | 20 | 
|                                    | Item 6  |                                                                                                                      | Exhibits and Reports on Form 8-K                                                          |      |   | 21 | 
|SIGNATURE                           |          |                                                                                                                      | 22                                                                                        |     
|EXHIBIT INDEX                       |          |                                                                                                                      |                                                                                           |     

1



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.






PART 1  FINANCIAL
INFORMATION





Item 1  Financial
Statements




INTRODUCTION TO THE FINANCIAL
STATEMENTS

The financial statements included herein have
been prepared by Fisher Scientific International Inc.
(Fisher or the Company), without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC). Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or
omitted pursuant to such rules and regulations. The
December 31, 2001 balance sheet is the balance sheet
included in the audited financial statements as shown in the
Companys Annual Report on Form 10-K for the year
ended December 31, 2001. The Company believes that the
disclosures are adequate to make the information presented not
misleading when read in conjunction with the financial
statements included in the Companys Annual Report on
Form 10-K for the year ended December 31, 2001.

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

2



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.






STATEMENT OF OPERATIONS


(in millions, except per share data)

|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |      | 
|---------------------------------------------------------------------------------------- | ------- | ------------------ | ----- | ---------------- |  | ---- | ----- | ---- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                                                                         |         |                    |       |                 
|                                                                                         |         | Three Months Ended |       | Six Months Ended
|                                                                                         |         | June 30,           |       | June 30,        
|                                                                                         |         |                    |       |                 
|                                                                                         |         | 2002               |       | 2001             |  | 2002 |       | 2001
|                                                                                         |         |                    |       |                  |  |      |       |     
|                                                                                         |         |                   
|                                                                                         |         | (unaudited)       
|Sales                                                                                    |         | $                  | 809.9 |                  |  | $    | 708.8 |      |  | $ | 1,585.4 |      |  | $ | 1,395.8 |     
|Cost of sales                                                                            |         |                    | 596.4 |                  |  |      | 529.1 |      |  |   | 1,166.8 |      |  |   | 1,041.7 |     
|Selling, general and administrative expense                                              |         |                    | 152.3 |                  |  |      | 133.8 |      |  |   | 303.6   |      |  |   | 266.6   |     
|Restructuring and other charges (credits)                                                |         |                    | (1.5  | )                |  |      |      |      |  |   | (1.5    | )    |  |   | 51.6    |     
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|Income from operations                                                                   |         |                    | 62.7  |                  |  |      | 45.9  |      |  |   | 116.5   |      |  |   | 35.9    |     
|Interest expense                                                                         |         |                    | 22.9  |                  |  |      | 24.4  |      |  |   | 46.8    |      |  |   | 50.8    |     
|Other expense, net                                                                       |         |                    | 11.9  |                  |  |      | 1.2   |      |  |   | 11.8    |      |  |   | 1.7     |     
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|Income (loss) before income taxes and cumulative
    effect of accounting change         |         |                    | 27.9  |                  |  |      | 20.3  |      |  |   | 57.9    |      |  |   | (16.6   | )   
|Income tax provision (benefit)                                                           |         |                    | 7.8   |                  |  |      | 8.1   |      |  |   | 18.0    |      |  |   | (5.1    | )   
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|Income (loss) before cumulative effect of
    accounting change                          |         |                    | 20.1  |                  |  |      | 12.2  |      |  |   | 39.9    |      |  |   | (11.5   | )   
|Cumulative effect of accounting change, net of tax                                       |         |                    |      |                  |  |      |      |      |  |   | (46.1   | )    |  |   |        |     
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|Net income (loss)                                                                        |         | $                  | 20.1  |                  |  | $    | 12.2  |      |  | $ | (6.2    | )    |  | $ | (11.5   | )   
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|Basic income (loss) per common share before
    cumulative effect of accounting change   |         | $                  | 0.37  |                  |  | $    | 0.25  |      |  | $ | 0.73    |      |  | $ | (0.26   | )   
|Cumulative effect of accounting change, net of tax                                       |         |                    |      |                  |  |      |      |      |  |   | (0.85   | )    |  |   |        |     
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|Basic net income (loss) per common share                                                 |         | $                  | 0.37  |                  |  | $    | 0.25  |      |  | $ | (0.12   | )    |  | $ | (0.26   | )   
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|Diluted income (loss) per common share before
    cumulative effect of accounting change |         | $                  | 0.35  |                  |  | $    | 0.23  |      |  | $ | 0.69    |      |  | $ | (0.26   | )   
|Cumulative effect of accounting change, net of tax                                       |         |                    |      |                  |  |      |      |      |  |   | (0.80   | )    |  |   |        |     
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|Diluted net income (loss) per common share                                               |         | $                  | 0.35  |                  |  | $    | 0.23  |      |  | $ | (0.11   | )    |  | $ | (0.26   | )   
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|Weighted average common shares outstanding:                                              |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|                                                                                         | Basic   |                    |       | 54.5             |  |      |       | 49.2 |  |   |         | 54.4 |  |   |         | 44.7 | 
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     
|                                                                                         | Diluted |                    |       | 57.9             |  |      |       | 52.8 |  |   |         | 57.8 |  |   |         | 44.7 | 
|                                                                                         |         |                    |       |                  |  |      |       |      |  |   |         |      |  |   |         |     

See the accompanying notes to financial
statements.

3



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.






BALANCE SHEET


(in millions, except share data)

|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |        |         |         | 
|---------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ------------ | ------- | ------- | ----- | ------ | ------- | ------- | 
|                                         |                                                                                                                                                                                                                           | June 30,                   |                                            | December 31,
|                                         |                                                                                                                                                                                                                           | 2002                       |                                            | 2001        
|                                         |                                                                                                                                                                                                                           |                            |                                            |             
|                                         |                                                                                                                                                                                                                           | (unaudited)                |                                            |             
|ASSETS                                  
|Current assets:                          |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|                                         | Cash and cash equivalents                                                                                                                                                                                                 |                            | $                                          | 45.2         |         |         | $     | 75.1   |        
|                                         | Accounts receivable, net                                                                                                                                                                                                  |                            |                                            | 378.1        |         |         |       | 332.0  |        
|                                         | Inventories                                                                                                                                                                                                               |                            |                                            | 273.9        |         |         |       | 261.4  |        
|                                         | Other current assets                                                                                                                                                                                                      |                            |                                            | 96.1         |         |         |       | 89.3   |        
|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|                                         |                                                                                                                                                                                                                           | Total current assets       |                                            |              | 793.3   |         |       |        | 757.8   |        
|Property, plant and equipment            |                                                                                                                                                                                                                           |                            | 319.8                                      |              |         |         | 322.1 |       
|Goodwill                                 |                                                                                                                                                                                                                           |                            | 450.9                                      |              |         |         | 507.4 |       
|Other assets                             |                                                                                                                                                                                                                           |                            | 255.7                                      |              |         |         | 251.9 |       
|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|                                         |                                                                                                                                                                                                                           | Total assets               |                                            | $            | 1,819.7 |         |       | $      | 1,839.2 |        
|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|LIABILITIES AND STOCKHOLDERS
    EQUITY
|Current liabilities:                     |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|                                         | Short-term debt                                                                                                                                                                                                           |                            | $                                          | 27.8         |         |         | $     | 75.7   |        
|                                         | Accounts payable                                                                                                                                                                                                          |                            |                                            | 375.1        |         |         |       | 336.1  |        
|                                         | Accrued and other current liabilities                                                                                                                                                                                     |                            |                                            | 211.0        |         |         |       | 225.9  |        
|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|                                         |                                                                                                                                                                                                                           | Total current liabilities  |                                            |              | 613.9   |         |       |        | 637.7   |        
|Long-term debt                           |                                                                                                                                                                                                                           |                            | 929.7                                      |              |         |         | 956.1 |       
|Other liabilities                        |                                                                                                                                                                                                                           |                            | 211.8                                      |              |         |         | 222.1 |       
|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|                                         |                                                                                                                                                                                                                           | Total liabilities          |                                            |              | 1,755.4 |         |       |        | 1,815.9 |        
|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|Commitments and contingencies            |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|Stockholders equity:                    |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|                                         | Preferred stock ($0.01 par value; 15,000,000
    shares authorized; none outstanding)                                                                                                                                     |                            |                                            |             |         |         |       |       |        
|                                         | Common stock ($0.01 par value; 500,000,000 shares
    authorized; 54,582,801 and 54,194,484 shares issued; and
    54,546,195 and 54,157,878 shares outstanding at June 30,
    2002 and December 31, 2001, respectively) |                            |                                            | 0.5          |         |         |       | 0.5    |        
|                                         | Capital in excess of par value                                                                                                                                                                                            |                            |                                            | 674.8        |         |         |       | 661.1  |        
|                                         | Accumulated deficit                                                                                                                                                                                                       |                            |                                            | (561.7       | )       |         |       | (555.5 | )      
|                                         | Accumulated other comprehensive loss                                                                                                                                                                                      |                            |                                            | (48.3        | )       |         |       | (81.8  | )      
|                                         | Treasury stock, at cost (36,606 shares at
    June 30, 2002 and
    December 31, 2001)                                                                                                                                    |                            |                                            | (1.0         | )       |         |       | (1.0   | )      
|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|                                         |                                                                                                                                                                                                                           | Total stockholders equity |                                            |              | 64.3    |         |       |        | 23.3    |        
|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       
|                                         |                                                                                                                                                                                                                           |                            | Total liabilities and stockholders equity |              | $       | 1,819.7 |       |        | $       | 1,839.2 | 
|                                         |                                                                                                                                                                                                                           |                            |                                            |              |         |         |       |       

See the accompanying notes to financial
statements.

4



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.






STATEMENT OF CASH FLOWS


(in millions)

|                                                    |                                                                                 |                                                                     |                                                 |        |       |       |       |        |       |        |  
|--------------------------------------------------- | ------------------------------------------------------------------------------- | ------------------------------------------------------------------- | ----------------------------------------------- | ------ | ----- | ----- | ----- | ------ | ----- | ------ | -
|                                                    |                                                                                 |                                                                    
|                                                    |                                                                                 | Six Months Ended                                                   
|                                                    |                                                                                 | June 30,                                                           
|                                                    |                                                                                 |                                                                    
|                                                    |                                                                                 | 2002                                                                |                                                 | 2001  
|                                                    |                                                                                 |                                                                     |                                                 |       
|                                                    |                                                                                 |                                                                    
|                                                    |                                                                                 | (unaudited)                                                        
|Cash flows from operating activities:               |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|                                                    | Net loss                                                                        |                                                                     | $                                               | (6.2   | )     |       | $     | (11.5  | )    
|                                                    | Adjustments to reconcile net loss to cash
    provided by operating activities: |                                                                     |                                                 |        |       |       |       |        |      
|                                                    |                                                                                 | Restructuring and other charges (credits), net of
    cash expended |                                                 |        | (1.5  | )     |       |        | 46.7  |       
|                                                    |                                                                                 | Depreciation and amortization                                       |                                                 |        | 37.6  |       |       |        | 39.0  |       
|                                                    |                                                                                 | Loss on sale of property, plant and equipment                       |                                                 |        | 1.0   |       |       |        | 0.1   |       
|                                                    |                                                                                 | Deferred income taxes                                               |                                                 |        | (20.5 | )     |       |        | (11.2 | )     
|                                                    |                                                                                 | Equity in loss of unconsolidated affiliates                         |                                                 |        | 0.7   |       |       |        | 4.8   |       
|                                                    |                                                                                 | Cumulative effect of accounting change                              |                                                 |        | 63.8  |       |       |        |      |       
|                                                    |                                                                                 | Other noncash expenses                                              |                                                 |        | 11.3  |       |       |        |      |       
|                                                    |                                                                                 | Changes in working capital, net of effects of
    acquisitions:     |                                                 |        |       |       |       |        |       |       
|                                                    |                                                                                 |                                                                     | Accounts receivables, net                       |        |       | (40.2 | )     |        |       | (15.4  | )
|                                                    |                                                                                 |                                                                     | Inventories                                     |        |       | (7.3  | )     |        |       | (17.3  | )
|                                                    |                                                                                 |                                                                     | Accounts payable                                |        |       | 36.4  |       |        |       | (3.3   | )
|                                                    |                                                                                 |                                                                     | Other working capital changes                   |        |       | (13.8 | )     |        |       | (1.0   | )
|                                                    |                                                                                 | Other assets and liabilities                                        |                                                 |        | 4.3   |       |       |        | (6.4  | )     
|                                                    |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|                                                    |                                                                                 |                                                                     | Cash provided by operating activities           |        |       | 65.6  |       |        |       | 24.5   |  
|                                                    |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|Cash flows from investing activities:               |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|                                                    | Acquisitions, net of cash acquired                                              |                                                                     |                                                 |       |       |       |       | (148.1 | )    
|                                                    | Capital expenditures                                                            |                                                                     |                                                 | (15.9  | )     |       |       | (14.0  | )    
|                                                    | Proceeds from sale of property, plant and
    equipment                         |                                                                     |                                                 | 0.1    |       |       |       | 0.1    |      
|                                                    | Other investing activity                                                        |                                                                     |                                                 | (0.6   | )     |       |       | (9.2   | )    
|                                                    |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|                                                    |                                                                                 |                                                                     | Cash used in investing activities               |        |       | (16.4 | )     |        |       | (171.2 | )
|                                                    |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|Cash flows from financing activities:               |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|                                                    | Proceeds from stock options exercised                                           |                                                                     |                                                 | 5.4    |       |       |       | 0.5    |      
|                                                    | Long-term debt proceeds                                                         |                                                                     |                                                 | 150.0  |       |       |       |       |      
|                                                    | Proceeds from sale of common stock                                              |                                                                     |                                                 |       |       |       |       | 289.9  |      
|                                                    | Acquisition of treasury stock                                                   |                                                                     |                                                 |       |       |       |       | (0.5   | )    
|                                                    | Payments of long-term debt                                                      |                                                                     |                                                 | (219.9 | )     |       |       | (12.5  | )    
|                                                    | Changes in short-term debt, net                                                 |                                                                     |                                                 | (8.0   | )     |       |       | 5.1    |      
|                                                    | Debt refinancing costs                                                          |                                                                     |                                                 | (9.8   | )     |       |       |       |      
|                                                    |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|                                                    |                                                                                 |                                                                     | Cash provided by (used in) financing activities |        |       | (82.3 | )     |        |       | 282.5  |  
|                                                    |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|Effect of exchange rate changes on cash             |                                                                                 |                                                                     | 3.2                                             |        |       |       | (1.4  | )     
|Net change in cash and cash equivalents             |                                                                                 |                                                                     | (29.9                                           | )      |       |       | 134.4 |       
|Cash and cash equivalents  beginning
    of period |                                                                                 |                                                                     | 75.1                                            |        |       |       | 66.0  |       
|                                                    |                                                                                 |                                                                     |                                                 |        |       |       |       |       
|Cash and cash equivalents  end of
    period       |                                                                                 | $                                                                   | 45.2                                            |        |       | $     | 200.4 |       
|                                                    |                                                                                 |                                                                     |                                                 |        |       |       |       |       

See the accompanying notes to financial
statements.

5



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.






STATEMENT OF CHANGES IN STOCKHOLDERS
EQUITY


AND OTHER COMPREHENSIVE INCOME


(in millions)

|                           |                                           |                                       |     |            |   |           |       |             |   |             |       |               |   |          |      |       |   |               |        |      |   |   |       |      |   |   |      |   |   |   |      |      |   |  |   |      |      | 
|-------------------------- | ----------------------------------------- | ------------------------------------- | --- | ---------- | - | --------- | ----- | ----------- | - | ----------- | ----- | ------------- | - | -------- | ---- | ----- | - | ------------- | ------ | ---- | - | - | ----- | ---- | - | - | ---- | - | - | - | ---- | ---- | - |  | - | ---- | ---- | 
|                           |                                           |                                       |     |            |   |           |       |             |   |             |       | Accumulated   |   |          |      |       |   |              
|                           |                                           |                                       |     |            |   |           |       | Shares      |   |             |       | Other         |   |          |      |       |   |              
|                           |                                           |                                       |     | Capital in |   | Shares    |       | To Be       |   |             |       | Comprehensive |   | Treasury |      |       |   | Other        
|                           |                                           | Common                                |     | Excess of  |   | Deposited |       | Distributed |   | Accumulated |       | Income        |   | Stock,   |      |       |   | Comprehensive
|                           |                                           | Stock                                 |     | Par Value  |   | In Trust  |       | From Trust  |   | Deficit     |       | (Loss)        |   | at Cost  |      | Total |   | Income       
|                           |                                           |                                       |     |            |   |           |       |             |   |             |       |               |   |          |      |       |   |              
|                           |                                           |                                      
|                           |                                           | (unaudited)                          
|Balance at January 1, 2002 |                                           | $                                     | 0.5 |            |   | $         | 661.1 |             |   | $           | (50.6 | )             |   | $        | 50.6 |       |   | $             | (555.5 | )    |   | $ | (81.8 | )    |   | $ | (1.0 | ) |   | $ | 23.3 |      |   |  |   |     
|                           | Net loss                                  |                                       |     |           |   |           |       |            |   |             |       |              |   |          |      |      |   |               |        | (6.2 | ) |   |       |     |   |   |      |  |   |   |      | (6.2 | ) |  | $ | (6.2 | )   
|                           | Foreign currency translation adjustment   |                                       |     |           |   |           |       |            |   |             |       |              |   |          |      |      |   |               |        |     |   |   |       | 28.3 |   |   |      |  |   |   |      | 28.3 |   |  |   | 28.3 |     
|                           | Unrealized investment losses              |                                       |     |           |   |           |       |            |   |             |       |              |   |          |      |      |   |               |        |     |   |   |       | (0.7 | ) |   |      |  |   |   |      | (0.7 | ) |  |   | (0.7 | )   
|                           | Unrealized gain on cash flow hedges       |                                       |     |           |   |           |       |            |   |             |       |              |   |          |      |      |   |               |        |     |   |   |       | 0.6  |   |   |      |  |   |   |      | 0.6  |   |  |   | 0.6  |     
|                           | Realization of losses on cash flow hedges |                                       |     |           |   |           |       |            |   |             |       |              |   |          |      |      |   |               |        |     |   |   |       | 5.3  |   |   |      |  |   |   |      | 5.3  |   |  |   | 5.3  |     
|                           |                                           |                                       |     |            |   |           |       |             |   |             |       |               |   |          |      |       |   |               |        |      |   |   |       |      |   |   |      |   |   |   |      |      |   |  |   |     
|                           |                                           | Subtotal  other comprehensive income |     |            |  |           |       |             |  |             |       |               |  |          |      |       |  |               |        |      |  |   |       |      |  |   |      |   |  |   |      |      |  |  |   | $    | 27.3 | 
|                           |                                           |                                       |     |            |   |           |       |             |   |             |       |               |   |          |      |       |   |               |        |      |   |   |       |      |   |   |      |   |   |   |      |      |   |  |   |     
|                           | Proceeds from stock options               |                                       |     |           |   |           |       | 5.4         |   |             |       |              |   |          |      |      |   |               |        |     |   |   |       |     |   |   |      |  |   |   |      | 5.4  |   |  |   |      |     
|                           | Tax benefit from stock options            |                                       |     |           |   |           |       | 8.3         |   |             |       |              |   |          |      |      |   |               |        |     |   |   |       |     |   |   |      |  |   |   |      | 8.3  |   |  |   |      |     
|                           | Trust activity                            |                                       |     |           |   |           |       |            |   |             |       | 9.7           |   |          |      | (9.7  | ) |               |        |     |   |   |       |     |   |   |      |  |   |   |      |     |   |  |   |      |     
|                           |                                           |                                       |     |            |   |           |       |             |   |             |       |               |   |          |      |       |   |               |        |      |   |   |       |      |   |   |      |   |   |   |      |      |   |  |   |     
|Balance at June 30, 2002   |                                           | $                                     | 0.5 |            |   | $         | 674.8 |             |   | $           | (40.9 | )             |   | $        | 40.9 |       |   | $             | (561.7 | )    |   | $ | (48.3 | )    |   | $ | (1.0 | ) |   | $ | 64.3 |      |   |  |   |     
|                           |                                           |                                       |     |            |   |           |       |             |   |             |       |               |   |          |      |       |   |               |        |      |   |   |       |      |   |   |      |   |   |   |      |      |   |  |   |     

See the accompanying notes to financial
statements.

6



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.






NOTES TO FINANCIAL STATEMENTS


(unaudited)


Note 1  Formation and
Background

Fisher Scientific International Inc.
(Fisher or the Company) was incorporated
in September 1991. The Companys operations are conducted
throughout North and South America, Europe, the Far East, the
Middle East and Africa directly or through one or more
subsidiaries, joint ventures, agents or dealers. The Company
reports financial results on the basis of three reportable
segments: domestic distribution, international distribution and
laboratory workstations. The domestic distribution segment
engages in the supply, marketing, service and manufacture of
scientific, clinical, educational, and occupational health and
safety products. Additionally, this segment provides contract
manufacturing and pharmaceutical packaging services for phase
III and IV clinical trials. The international distribution
segment engages in the supply, marketing and service of
primarily scientific research products. The laboratory
workstations segment manufactures laboratory workstations and
fume hoods for the scientific research market and enclosures for
technology and communication centers.

In February 2002, certain of the Companys
stockholders sold 7.4 million shares of common stock in an
underwritten public offering. The Company did not receive any of
the proceeds from this offering. Currently, certain affiliates
of Thomas H. Lee Partners and the other institutional investors
involved in the Companys recapitalization in 1998 together
with management of the Company own approximately 50% of the
Companys outstanding common stock.

Certain prior year amounts have been reclassified
to conform to their current presentation.

Note 2  Change in
Accounting Principle

In June 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting
Standards No. 141, Business Combinations
(SFAS 141) and Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible
Assets (SFAS 142).

SFAS 141 requires the purchase method of
accounting for business combinations initiated after
June 30, 2001, and eliminated the pooling-of-interests
method for business combinations. SFAS 141 also specifies the
types of acquired intangible assets that are required to be
included in goodwill. Under the provisions of SFAS 141, goodwill
and intangible assets determined to have an indefinite useful
life that are acquired in a business combination completed after
June 30, 2001, were not amortized. Goodwill and intangible
assets acquired in business combinations completed prior to
July 1, 2001, continued to be amortized through
December 31, 2001.

SFAS 142 requires the use of a nonamortization
approach to account for goodwill and indefinite-lived intangible
assets. Under the nonamortization approach, goodwill and
indefinite-lived intangible assets will not be amortized but
instead will be reviewed for impairment and written down with a
resulting charge to operations in the period in which the
recorded value of goodwill and indefinite-lived intangible
assets is more than its fair value. The adoption of SFAS 142
required the Company to reassess the useful lives and residual
values of all intangible assets and make any necessary
amortization adjustments. Based on that assessment, no
adjustments were made to the amortization period or residual
values of our intangible assets. Additionally, SFAS 142 requires
the Company to perform an evaluation of whether goodwill and
indefinite-lived intangible assets are impaired as of
January 1, 2002, the effective date of the statement for
the Company. The Company has determined that no impairment
exists for its indefinite-lived intangible assets.

SFAS 142 provided a six-month transitional period
from the effective date of adoption to perform an initial
assessment of whether an indication of goodwill impairment
exists. This initial assessment compares the fair value of the
reporting unit to its carrying value, including goodwill. Fair
value was determined using a combination of discounted cash flow
and multiple of earnings valuation techniques. To the extent
that the fair value was less than the carrying value, the
Company was required to perform a second test to measure the
amount of the goodwill impairment, if any.

7



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL
STATEMENTS  (Continued)

During the second quarter of 2002, the Company
completed its transitional assessment in accordance with these
tests to determine if goodwill was impaired as of
January 1, 2002. As a result, the Company recorded a
non-cash charge of $63.8 million ($46.1 million, net
of tax) in the Companys statement of operations for the
six months ended June 30, 2002, reflecting the cumulative
effect of the accounting change to adjust goodwill to
fair-value. The international distribution segment and
laboratory workstations segment accounted for $19.7 million
and $44.1 million of the charge, respectively.

The impairment charge in the international
distribution segment related to certain of our smaller market
distribution businesses where current operating performance is
lower than the original forecast. Our laboratory workstations
segment is sensitive to changes in capital spending and several
of the markets the laboratory workstations segment sells to,
including the technology industry, experienced a significant
economic slowdown causing a reduction in spending in those
markets. As a result, sales growth was significantly less than
originally forecasted, resulting in decreased profitability due
to decreased volume and ensuing pricing pressures.

SFAS 142 also requires that goodwill be tested
annually and between annual tests if events occur or
circumstances change that would more likely than not reduce the
fair value of a reporting unit below its carrying amount. The
Company has elected to perform its annual test for indications
of goodwill impairment as of October 31 of each year. Future
impairments of goodwill, if any, will be recorded to operating
income in the Companys statement of operations.

In accordance with SFAS 142, the Company
discontinued the amortization of goodwill effective
January 1, 2002. The following is a reconciliation of net
income (loss), as reported, to net income (loss) and net
income (loss) per share for the three and six months ended
June 30, 2001, excluding goodwill amortization (in
millions, except per share amounts):

|                                                                        |         |               |      |               |  |   |       |       |  
|----------------------------------------------------------------------- | ------- | ------------- | ---- | ------------- |  | - | ----- | ----- | -
|                                                                        |         | Three Months  |      | Six Months   
|                                                                        |         | Ended         |      | Ended        
|                                                                        |         | June 30, 2001 |      | June 30, 2001
|                                                                        |         |               |      |              
|Net income (loss), as reported                                          |         | $             | 12.2 |               |  | $ | (11.5 | )    
|Goodwill amortization, net of tax                                       |         |               | 3.7  |               |  |   | 7.0   |      
|                                                                        |         |               |      |               |  |   |       |      
|Net income (loss), excluding goodwill amortization                      |         | $             | 15.9 |               |  | $ | (4.5  | )    
|                                                                        |         |               |      |               |  |   |       |      
|Net income (loss) per common share, excluding
    goodwill amortization |         |               |      |               |  |   |       |      
|                                                                        | Basic   |               | $    | 0.32          |  |   | $     | (0.10 | )
|                                                                        |         |               |      |               |  |   |       |      
|                                                                        | Diluted |               | $    | 0.30          |  |   | $     | (0.10 | )
|                                                                        |         |               |      |               |  |   |       |      

Note 3  Senior
Subordinated Notes

In April 2002, the Company issued and sold
$150.0 million of 8 1/8 percent 10-year senior
subordinated notes (the Note Offering). The Company
used the net proceeds of the Note Offering, together with
proceeds from the sale of accounts receivables through its
receivables securitization facility and cash on hand, to repay
bank term debt totaling $211.3 million. As a result of the
refinancing, the Company recorded an $11.2 million charge
in the second quarter, consisting of $7.1 million of
fixed-swap unwind costs and $4.1 million of deferred
financing and other costs associated with the term debt.

Note 4  Acquisitions

In November 2001, the Company acquired
Cole-Parmer Instrument Company and its affiliated companies
(Cole-Parmer) for $208.5 million in cash.
Cole-Parmer is a leading worldwide manufacturer

8



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL
STATEMENTS  (Continued)

and distributor of specialty technical
instruments, equipment and supplies. The results of Cole-Parmer
have been included in the domestic distribution segment from the
date of acquisition.

The following unaudited pro forma financial
information presents the consolidated results of operations as
if the acquisition had occurred at the beginning of 2001 (in
millions, except per share amounts). The unaudited pro forma
amounts include a financing charge to reflect estimated
borrowing costs that would have been incurred had the
acquisition occurred at the beginning of 2001. The unaudited pro
forma financial information is provided for informational
purposes only and does not purport to be indicative of the
Companys results of operations that would actually have
been achieved had the acquisition been completed for the period
presented, or that may be achieved in the future.

|                                    |         |               |       |               |  |   |         |       |  
|----------------------------------- | ------- | ------------- | ----- | ------------- |  | - | ------- | ----- | -
|                                    |         | Three Months  |       | Six Months   
|                                    |         | Ended         |       | Ended        
|                                    |         | June 30, 2001 |       | June 30, 2001
|                                    |         |               |       |              
|Sales                               |         | $             | 751.3 |               |  | $ | 1,484.8 |      
|Net income (loss)                   |         | $             | 13.5  |               |  | $ | (10.1   | )    
|Net income (loss) per common share: |         |               |       |               |  |   |         |      
|                                    | Basic   |               | $     | 0.27          |  |   | $       | (0.23 | )
|                                    | Diluted |               | $     | 0.26          |  |   | $       | (0.23 | )

Note 5  Inventories

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

|                  |       |          |       |              |  |   |       |       | 
|----------------- | ----- | -------- | ----- | ------------ |  | - | ----- | ----- | 
|                  |       | June 30, |       | December 31,
|                  |       | 2002     |       | 2001        
|                  |       |          |       |             
|Raw materials     |       | $        | 43.0  |              |  | $ | 33.6  |      
|Work in process   |       |          | 9.6   |              |  |   | 11.0  |      
|Finished products |       |          | 221.3 |              |  |   | 216.8 |      
|                  |       |          |       |              |  |   |       |      
|                  | Total |          | $     | 273.9        |  |   | $     | 261.4 | 
|                  |       |          |       |              |  |   |       |      

Note 6  Goodwill and
Intangible Assets

The following is a reconciliation of changes in
the carrying amount of goodwill by segment for the six months
ended June 30, 2002 (in millions):

|                                |                                        |              |       |               |   |              |       |       |   |   |      |       |   |   |       |       |  
|------------------------------- | -------------------------------------- | ------------ | ----- | ------------- | - | ------------ | ----- | ----- | - | - | ---- | ----- | - | - | ----- | ----- | -
|                                |                                        | Domestic     |       | International |   | Laboratory   |       |      
|                                |                                        | Distribution |       | Distribution  |   | Workstations |       | Total
|                                |                                        |              |       |               |   |              |       |      
|Balance as of December 31, 2001 |                                        | $            | 299.3 |               |   | $            | 111.0 |       |   | $ | 97.1 |       |   | $ | 507.4 |      
|                                | Cumulative effect of accounting change |              |       |              |   |              |       | (19.7 | ) |   |      | (44.1 | ) |   |       | (63.8 | )
|                                | Purchase price allocation adjustment   |              |       | (7.0          | ) |              |       |      |   |   |      |      |   |   |       | (7.0  | )
|                                | Effect of foreign currency change      |              |       | 4.9           |   |              |       | 9.4   |   |   |      |      |   |   |       | 14.3  |  
|                                |                                        |              |       |               |   |              |       |       |   |   |      |       |   |   |       |      
|Balance as of June 30, 2002     |                                        | $            | 297.2 |               |   | $            | 100.7 |       |   | $ | 53.0 |       |   | $ | 450.9 |      
|                                |                                        |              |       |               |   |              |       |       |   |   |      |       |   |   |       |      

In accordance with SFAS 142 the Company
completed its evaluation of whether goodwill was impaired as of
January 1, 2002, and recorded a non-cash charge for the
cumulative effect of the accounting change (see
Note 2  Change in Accounting
Principal).

In April 2002, the Company acquired an additional
interest in Medical Analysis Systems, Inc. (MAS),
bringing the Companys ownership interest in MAS to 91%.
MAS is a manufacturer of controls and reagents for the clinical
laboratory market. The Company has included the results of MAS
in the Companys

9



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL
STATEMENTS  (Continued)

consolidated financial statements since obtaining
a controlling interest in MAS in June 2001. As a result of the
Companys ownership in MAS exceeding 80%, MAS qualifies for
inclusion in the consolidated tax group of Fisher. As a result,
the Company has recorded an adjustment to the purchase price
allocation for MAS reflecting a reduction in the acquired
deferred tax asset valuation allowance and an offsetting
decrease to goodwill.

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

|                                                                                                                                                                    |                                                                    |          |      |              |  |   |      |      | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | -------- | ---- | ------------ |  | - | ---- | ---- | 
|                                                                                                                                                                    |                                                                    | June 30, |      | December 31,
|                                                                                                                                                                    |                                                                    | 2002     |      | 2001        
|                                                                                                                                                                    |                                                                    |          |      |             
|Customer lists (net of accumulated amortization
    of $5.2 million and $4.4 million at June 30, 2002 and December
    31, 2001, respectively)                      |                                                                    | $        | 14.7 |              |  | $ | 15.1 |     
|Non-compete agreements (net of accumulated
    amortization of $13.4 million and $11.6 million at June 30, 2002
    and December 31, 2001, respectively)            |                                                                    |          | 7.6  |              |  |   | 9.5  |     
|Patents and tradenames (net of accumulated
    amortization of $6.2 million and $5.5 million at June 30, 2002
    and December 31, 2001, respectively)              |                                                                    |          | 7.3  |              |  |   | 7.3  |     
|Other amortizable intangible assets (net of
    accumulated amortization of $7.4 million and $7.0 million at
    June 30, 2002 and December 31, 2001, respectively) |                                                                    |          | 12.9 |              |  |   | 13.6 |     
|                                                                                                                                                                    |                                                                    |          |      |              |  |   |      |     
|                                                                                                                                                                    | Amortizable intangible assets, net of accumulated
    amortization |          | $    | 42.5         |  |   | $    | 45.5 | 
|                                                                                                                                                                    |                                                                    |          |      |              |  |   |      |     

For the three and six months ended June 30,
2002, the Company recorded amortization expense of
$2.2 million and $4.3 million, respectively. For the
three and six months ended June 30, 2001, the Company
recorded amortization expense of $1.5 million and
$2.6 million, respectively.

The estimated amortization expense for each of
the five succeeding years is as follows:

|                                |  |   |      | 
|------------------------------- |  | - | ---- | 
|For the year ended December 31, |  |  
|                                |  |  
|2002(a)                         |  | $ | 3.7  | 
|2003                            |  | $ | 6.1  | 
|2004                            |  | $ | 5.6  | 
|2005                            |  | $ | 2.8  | 
|2006                            |  | $ | 2.4  | 
|2007                            |  | $ | 2.1  | 
|thereafter                      |  | $ | 19.8 | 



|    |                                                                                                 
|--- | ------------------------------------------------------------------------------------------------
|(a) | Amount represents estimated amortization expense
    for the six months ended December 31, 2002.

At June 30, 2002 and December 31, 2001, the
Company had indefinite-lived intangible assets of $61.5 million
which primarily consists of tradenames.

Note 7  Accounts
Payable

The Company maintains a zero balance cash
management system for its accounts payable. Accordingly,
included in accounts payable at June 30, 2002, and
December 31, 2001, are approximately $99.0 million and
$95.0 million of outstanding checks, respectively.

10



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL
STATEMENTS  (Continued)

Note 8  Other Comprehensive
Income (Loss)

The following is a summary of other comprehensive
income (loss) for the three and six months ended
June 30, 2002 and 2001 (in millions). Other comprehensive
income (loss) components included in stockholders
equity include any changes in equity during a period that are
not the result of transactions with the Companys
stockholders.

|                                          |  |                    |      |                  |  |      |      |      |  |   |      |   |  |   |       |  
|----------------------------------------- |  | ------------------ | ---- | ---------------- |  | ---- | ---- | ---- |  | - | ---- | - |  | - | ----- | -
|                                          |  |                    |      |                 
|                                          |  | Three Months Ended |      | Six Months Ended
|                                          |  | June 30,           |      | June 30,        
|                                          |  |                    |      |                 
|                                          |  | 2002               |      | 2001             |  | 2002 |      | 2001
|                                          |  |                    |      |                  |  |      |      |     
|Net income (loss)                         |  | $                  | 20.1 |                  |  | $    | 12.2 |      |  | $ | (6.2 | ) |  | $ | (11.5 | )
|Foreign currency translation adjustment   |  |                    | 33.7 |                  |  |      | (5.1 | )    |  |   | 28.3 |   |  |   | (21.3 | )
|Unrealized investment gains (losses)      |  |                    | (0.1 | )                |  |      | 0.5  |      |  |   | (0.7 | ) |  |   | (2.8  | )
|Unrealized gain on cash flow hedges       |  |                    |     |                  |  |      | 1.2  |      |  |   | 0.6  |   |  |   | 0.3   |  
|Realization of losses on cash flow hedges |  |                    | 5.3  |                  |  |      |     |      |  |   | 5.3  |   |  |   |      |  
|                                          |  |                    |      |                  |  |      |      |      |  |   |      |   |  |   |       |  
|Other comprehensive income (loss)         |  | $                  | 59.0 |                  |  | $    | 8.8  |      |  | $ | 27.3 |   |  | $ | (35.3 | )
|                                          |  |                    |      |                  |  |      |      |      |  |   |      |   |  |   |       |  

Note 9  Earnings Per
Share

The following is a reconciliation of the shares
used in the computation of basic and diluted earnings per share
for the three and six months ended June 30, 2002 and 2001
(in millions):

|                                                                                                            |  |              |      |            |  |      |      |      |  |  |      |  |  |  |      | 
|----------------------------------------------------------------------------------------------------------- |  | ------------ | ---- | ---------- |  | ---- | ---- | ---- |  |  | ---- |  |  |  | ---- | 
|                                                                                                            |  |              |      |           
|                                                                                                            |  | Three Months |      | Six Months
|                                                                                                            |  | Ended        |      | Ended     
|                                                                                                            |  | June 30,     |      | June 30,  
|                                                                                                            |  |              |      |           
|                                                                                                            |  | 2002         |      | 2001       |  | 2002 |      | 2001
|                                                                                                            |  |              |      |            |  |      |      |     
|Weighted average shares of common stock
    outstanding used in the computation of basic earnings per share |  |              | 54.5 |            |  |      | 49.2 |      |  |  | 54.4 |  |  |  | 44.7 | 
|Common stock equivalents(a)                                                                                 |  |              | 3.4  |            |  |      | 3.6  |      |  |  | 3.4  |  |  |  |     | 
|                                                                                                            |  |              |      |            |  |      |      |      |  |  |      |  |  |  |      | 
|Shares used in the computation of diluted
    earnings per share                                            |  |              | 57.9 |            |  |      | 52.8 |      |  |  | 57.8 |  |  |  | 44.7 | 
|                                                                                                            |  |              |      |            |  |      |      |      |  |  |      |  |  |  |      | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The amount of outstanding antidilutive common
    stock options and warrants excluded from the computation of
    diluted earnings per share for the three and six months ended
    June 30, 2002 was 1.1 million, and 1.3 million,
    respectively and for the three and six months ended
    June 30, 2001 was 1.2 million and 4.1 million,
    respectively.

Note 10  Restructuring and
Other Charges

During 2001, the Company implemented two
restructuring plans focused on integration of the Companys
international operations and recent acquisitions and
streamlining aimed at improving domestic operations (the
2001 Plan). As a result of these actions, the
Company recorded restructuring charges totaling
$27.0 million consisting of $18.1 million recorded in
the first quarter of 2001 and $8.9 million recorded in the
fourth quarter of 2001. During the second quarter of 2002, the
Company recorded a net restructuring credit of $1.5 million
for the reversal for certain costs accrued in the 2001 Plan. The
restructuring credit is primarily related to a reduction in
estimated severance costs of approximately $1.6 million due
to certain employees electing to voluntarily separate from the
company as well as outplacement costs that were less than
anticipated. Additionally, the Company recorded an additional
$0.1 million related to certain exit costs that could not be

11



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL
STATEMENTS  (Continued)

estimated at the time the plan was announced and
recorded. The following table summarizes the recorded accruals
and activity related to the 2001 Plan for the six
months ended June 30, 2002 (in millions):

|                                |  |             |      |            |  |       |      |   |  |   |      |  
|------------------------------- |  | ----------- | ---- | ---------- |  | ----- | ---- | - |  | - | ---- | -
|                                |  | Employee    |      | Other      |  |      
|                                |  | Separations |      | Exit Costs |  | Total
|                                |  |             |      |            |  |      
|Balance as of December 31, 2001 |  | $           | 7.4  |            |  | $     | 6.0  |   |  | $ | 13.4 |  
|Cash payments                   |  |             | (3.1 | )          |  |       | (1.9 | ) |  |   | (5.0 | )
|Restructuring charge (credit)   |  |             | (1.6 | )          |  |       | 0.1  |   |  |   | (1.5 | )
|                                |  |             |      |            |  |       |      |   |  |   |      |  
|Balance as of June 30, 2002     |  | $           | 2.7  |            |  | $     | 4.2  |   |  | $ | 6.9  |  
|                                |  |             |      |            |  |       |      |   |  |   |      |  

Note 11  Segment
Information

The Company reports financial results on the
basis of three reportable segments: domestic distribution,
international distribution and laboratory workstations. The
Companys distribution and related manufacturing and
service operations are principally managed on a geographic basis
and are reported as the domestic distribution and international
distribution segments. The Companys workstation
manufacturing operations, which generally does not sell through
the distribution operations, is reported separately as the
laboratory workstations segment. The domestic distribution
segment engages in the supply, marketing, service and
manufacture of scientific, clinical, educational, and
occupational health and safety products. Additionally, this
segment provides contract manufacturing and pharmaceutical
packaging services for phase III and IV clinical trials. The
international distribution segment engages in the supply,
marketing and services of primarily scientific research
products. The laboratory workstations segment manufactures
laboratory workstations and fume hoods for the scientific
research market and enclosures for technology and communication
centers.

The Company evaluates the performance of its
operations based upon operating income. Income from operations
is revenue less related costs and direct and allocated expenses.
Interest expense, other income and expense and income taxes are
not evaluated on a segment basis. In addition, special charges
are not allocated to the segments. The accounting policies of
the segments are the same as described in the summary of
significant accounting policies. Intercompany sales and
transfers between segments were not material for the three and
six months ended June 30, 2002 and 2001.

Selected reportable segment financial information
for the three and six months ended June 30, 2002 and 2001
is shown below (in millions):

|       |                            |                    |   |                  |       |      |   |       |       |  |   |         |         |  |   |         |         | 
|------ | -------------------------- | ------------------ | - | ---------------- | ----- | ---- | - | ----- | ----- |  | - | ------- | ------- |  | - | ------- | ------- | 
|       |                            |                    |   |                 
|       |                            | Three Months Ended |   | Six Months Ended
|       |                            | June 30,           |   | June 30,        
|       |                            |                    |   |                 
|       |                            | 2002               |   | 2001             |       | 2002 |   | 2001 
|       |                            |                    |   |                  |       |      |   |      
|Sales: |                            |                    |   |                  |       |      |   |       |       |  |   |         |         |  |   |        
|       | Domestic distribution      |                    | $ | 699.9            |       |      | $ | 602.4 |       |  | $ | 1,370.2 |         |  | $ | 1,175.9 |        
|       | International distribution |                    |   | 106.5            |       |      |   | 103.8 |       |  |   | 214.3   |         |  |   | 214.4   |        
|       | Laboratory workstations    |                    |   | 47.3             |       |      |   | 44.7  |       |  |   | 89.9    |         |  |   | 86.5    |        
|       | Eliminations               |                    |   | (43.8            | )     |      |   | (42.1 | )     |  |   | (89.0   | )       |  |   | (81.0   | )      
|       |                            |                    |   |                  |       |      |   |       |       |  |   |         |         |  |   |        
|       |                            | Total              |   | $                | 809.9 |      |   | $     | 708.8 |  |   | $       | 1,585.4 |  |   | $       | 1,395.8 | 
|       |                            |                    |   |                  |       |      |   |       |       |  |   |         |         |  |   |        

12



---



##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL
STATEMENTS  (Continued)

|                        |                                    |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |      |      | 
|----------------------- | ---------------------------------- | ------------------ | - | ---------------- | ---- | ---- | - | ---- | ---- |  | - | ----- | ----- |  | - | ---- | ---- | 
|                        |                                    |                    |   |                 
|                        |                                    | Three Months Ended |   | Six Months Ended
|                        |                                    | June 30,           |   | June 30,        
|                        |                                    |                    |   |                 
|                        |                                    | 2002               |   | 2001             |      | 2002 |   | 2001
|                        |                                    |                    |   |                  |      |      |   |     
|Income from operations: |                                    |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |     
|                        | Domestic distribution              |                    | $ | 53.7             |      |      | $ | 45.4 |      |  | $ | 101.1 |       |  | $ | 85.3 |     
|                        | International distribution         |                    |   | 5.0              |      |      |   | 3.4  |      |  |   | 9.8   |       |  |   | 8.5  |     
|                        | Laboratory workstations            |                    |   | 2.8              |      |      |   | 1.9  |      |  |   | 4.5   |       |  |   | 3.4  |     
|                        | Eliminations                       |                    |   | (0.3             | )    |      |   | (0.4 | )    |  |   | (0.4  | )     |  |   | (0.4 | )   
|                        |                                    |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |     
|                        |                                    | Segment sub-total  |   |                  | 61.2 |      |   |      | 50.3 |  |   |       | 115.0 |  |   |      | 96.8 | 
|                        | Restructuring and other charges(a) |                    |   | (1.5             | )    |      |   |     |      |  |   | (1.5  | )     |  |   | 51.6 |     
|                        | Nonrecurring charges(a)            |                    |   |                 |      |      |   |     |      |  |   |      |       |  |   | 1.1  |     
|                        | Goodwill amortization              |                    |   |                 |      |      |   | 4.4  |      |  |   |      |       |  |   | 8.2  |     
|                        |                                    |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |     
|                        |                                    | Total              |   | $                | 62.7 |      |   | $    | 45.9 |  |   | $     | 116.5 |  |   | $    | 35.9 | 
|                        |                                    |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |     



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The domestic distribution, international
    distribution and laboratory workstations segments accounted for
    $15.4 million, $2.6 million and $0.1 million,
    respectively, of the restructuring charge taken in the first
    quarter of 2001. The domestic distribution segment incurred a
    $1.1 million inventory write-off to cost of sales in the
    first quarter related to the restructuring. In connection with
    the Companys May 2001 stock offering process, the Company
    accelerated the vesting of common stock options that resulted in
    a primarily non-cash compensation charge of $33.5 million,
    which was recorded in the first quarter of 2001.

Note 12  Recent Accounting
Pronouncements

In August 2001, the FASB issued Statement of
Financial Accounting Standards No. 143, Accounting
For Asset Retirement Obligations (SFAS 143).
SFAS 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. It
applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition,
construction, development and/or the normal operation of a
long-lived asset, except for certain obligations of lessees.
This standard requires entities to record the fair value of a
liability for an asset retirement obligation in the period
incurred. The Company does not anticipate the adoption of SFAS
143 as of January 1, 2003 will have a material effect on
its financial position or results of operations.

In April 2002, the FASB issued Statement of
Financial Accounting Standards No. 145, Rescission of
FASB Statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13, and Technical Correction
(SFAS 145). SFAS 145 provides that a loss on
extinguishment of debt meet the requirements of APB 30 to be
treated as an extraordinary item in the statement of operations.
The Company has elected to early adopt the provisions of SFAS
145, related to the rescission of SFAS 4. In connection with the
retirement of bank term debt in April 2002 (see Note
3  Senior Subordinated Notes), the Company
recognized a $3.3 million charge ($2.1 million, net of
tax) for deferred financing costs in other expense, as it does
not meet the requirements for classification as an extraordinary
item in accordance with SFAS 145. Accordingly, the provisions of
this statement have been adopted as of April 1, 2002 and
will be applied prospectively.

In July 2002, the FASB issued Statement of
Financial Accounting Standards No. 146, Accounting
for Exit or Disposal Activities (SFAS 146).
SFAS 146 requires the recognition of a liability for costs
associated with an exit plan or disposal activity when incurred
and nullifies Emerging Issues Task Force (EITF) Issue 94-3,
Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring), which allowed
recognition at the date of an entitys commitment to an
exit plan. The provisions of this statement are effective for
exit or disposal activities that may be initiated by the Company
after December 31, 2002. The Company does not anticipate the
adoption of SFAS 146 will have a material effect on its
financial position or results of operations.

13



---



##### Table of Contents






Item 2  Managements
Discussion and Analysis of Results of Operations and Financial
Condition

This Form 10-Q contains forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Companys actual results could
differ materially from those set forth in the forward-looking
statements. Certain factors that might cause such a difference
include those discussed in the section entitled
Managements Discussion and Analysis of Results of
Operations and Financial Condition  Cautionary
Factors Regarding Forward-Looking Statements contained in
the Companys Form 10-K for the year ended
December 31, 2001. The Company undertakes no obligation to
publicly update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in the report
might not occur.

We report financial results on the basis of three
reportable segments: domestic distribution, international
distribution and laboratory workstations. The domestic
distribution segment engages in the supply, marketing, service
and manufacture of scientific, clinical, educational and
occupational health and safety products. Additionally, this
segment provides contract manufacturing and pharmaceutical
packaging services for phase III and IV clinical trials. The
international distribution segment engages in the supply,
marketing and service of primarily scientific research products.
The laboratory workstations segment manufactures laboratory
workstations, fume hoods for the scientific research market and
enclosures for technology and communication centers.

In February 2002, certain of our stockholders
sold 7.4 million shares of common stock in an underwritten
public offering. We did not receive any of the proceeds from
this offering. Currently, certain affiliates of Thomas H. Lee
Partners and the other institutional investors involved in the
Companys recapitalization in 1998 together with management
of the Company own approximately 50% of the Companys
outstanding common stock.

In April 2002, we issued and sold
$150.0 million of 8 1/8 percent 10-year senior
subordinated notes pursuant to Rule 144A of the Securities
Act of 1933 (the Note Offering). We used the net
proceeds of the Note Offering, together with proceeds from the
sale of accounts receivables through our receivables
securitization facility and cash on hand, to repay bank term
debt totaling $211.3 million. As a result of the
refinancing, we recorded an $11.2 million charge in the
second quarter consisting of $7.1 million of fixed-swap
unwind costs and $4.1 million of deferred financing and
other costs associated with the term debt. Excluding these
charges we expect to realize savings of approximately
$3.0 million in 2002 interest expense.

Approximately 60% of our product deliveries in
the United States are through United Parcel Service
(UPS). The collective bargaining agreement between
UPS and its delivery employees was scheduled to expire on
July 31, 2002. On July 16, 2002, UPS announced that it had
reached an agreement on a new six-year contract to replace the
agreement that expired July 31, 2002. The contract will be
presented to the union-represented workers of UPS for
ratification, which is expected. If UPS experiences a major work
stoppage or slowdown, it would have a material adverse impact on
our results of operations and cash flows. Although we have
implemented plans to mitigate its possible effects, those
effects have not been reflected in our forecasts.

On July 31, 2002, we acquired a
Netherlands-based distributor operating under the names of
Retsch and Emergo, further enhancing our position in northern
Europe and strengthening our European management team. Retsch
and Emergo are distributors of instruments, equipment and
supplies to the scientific research and industrial markets with
annual revenues of approximately $14 million. The net
purchase price of approximately $8.0 million was funded
using cash on hand.

14



---



##### Table of Contents



Results of Operations

The following table sets forth our sales and
income from operations by reportable segment for the three and
six months ended June 30, 2002 and 2001 (in millions):

|       |                            |                    |   |                  |       |      |   |       |       |  |   |         |         |  |   |         |         | 
|------ | -------------------------- | ------------------ | - | ---------------- | ----- | ---- | - | ----- | ----- |  | - | ------- | ------- |  | - | ------- | ------- | 
|       |                            |                    |   |                 
|       |                            | Three Months Ended |   | Six Months Ended
|       |                            | June 30,           |   | June 30,        
|       |                            |                    |   |                 
|       |                            | 2002               |   | 2001             |       | 2002 |   | 2001 
|       |                            |                    |   |                  |       |      |   |      
|Sales: |                            |                    |   |                  |       |      |   |       |       |  |   |         |         |  |   |        
|       | Domestic distribution      |                    | $ | 699.9            |       |      | $ | 602.4 |       |  | $ | 1,370.2 |         |  | $ | 1,175.9 |        
|       | International distribution |                    |   | 106.5            |       |      |   | 103.8 |       |  |   | 214.3   |         |  |   | 214.4   |        
|       | Laboratory workstations    |                    |   | 47.3             |       |      |   | 44.7  |       |  |   | 89.9    |         |  |   | 86.5    |        
|       | Eliminations               |                    |   | (43.8            | )     |      |   | (42.1 | )     |  |   | (89.0   | )       |  |   | (81.0   | )      
|       |                            |                    |   |                  |       |      |   |       |       |  |   |         |         |  |   |        
|       |                            | Total              |   | $                | 809.9 |      |   | $     | 708.8 |  |   | $       | 1,585.4 |  |   | $       | 1,395.8 | 
|       |                            |                    |   |                  |       |      |   |       |       |  |   |         |         |  |   |        

|                        |                                 |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |      |      | 
|----------------------- | ------------------------------- | ------------------ | - | ---------------- | ---- | ---- | - | ---- | ---- |  | - | ----- | ----- |  | - | ---- | ---- | 
|                        |                                 |                    |   |                 
|                        |                                 | Three Months Ended |   | Six Months Ended
|                        |                                 | June 30,           |   | June 30,        
|                        |                                 |                    |   |                 
|                        |                                 | 2002               |   | 2001             |      | 2002 |   | 2001
|                        |                                 |                    |   |                  |      |      |   |     
|Income from operations: |                                 |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |     
|                        | Domestic distribution           |                    | $ | 53.7             |      |      | $ | 45.4 |      |  | $ | 101.1 |       |  | $ | 85.3 |     
|                        | International distribution      |                    |   | 5.0              |      |      |   | 3.4  |      |  |   | 9.8   |       |  |   | 8.5  |     
|                        | Laboratory workstations         |                    |   | 2.8              |      |      |   | 1.9  |      |  |   | 4.5   |       |  |   | 3.4  |     
|                        | Eliminations                    |                    |   | (0.3             | )    |      |   | (0.4 | )    |  |   | (0.4  | )     |  |   | (0.4 | )   
|                        |                                 |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |     
|                        |                                 | Segment sub-total  |   |                  | 61.2 |      |   |      | 50.3 |  |   |       | 115.0 |  |   |      | 96.8 | 
|                        | Restructuring and other charges |                    |   | (1.5             | )    |      |   |     |      |  |   | (1.5  | )     |  |   | 51.6 |     
|                        | Nonrecurring charges            |                    |   |                 |      |      |   |     |      |  |   |      |       |  |   | 1.1  |     
|                        | Goodwill amortization           |                    |   |                 |      |      |   | 4.4  |      |  |   |      |       |  |   | 8.2  |     
|                        |                                 |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |     
|                        |                                 | Total              |   | $                | 62.7 |      |   | $    | 45.9 |  |   | $     | 116.5 |  |   | $    | 35.9 | 
|                        |                                 |                    |   |                  |      |      |   |      |      |  |   |       |       |  |   |     

Sales

Sales for the three and six months ended
June 30, 2002 increased 14.3% and 13.6% to
$809.9 million and $1,585.4 million, respectively,
from $708.8 million and $1,395.8 million for the
comparable periods in 2001. For the three months ended
June 30, 2002 sales grew approximately 6% to 7% excluding
the effect of acquisitions completed in 2001. For the six months
ended June 30, 2002 sales grew approximately 4% to 5%
excluding the effect of acquisitions completed in 2001.
Excluding the impact of foreign exchange, we continue to expect
full year sales growth to range between 11.0% and 12.0% for
2002, reflecting growth in our base business and the impact of
acquisitions completed in 2001.

Sales in the domestic distribution segment
increased 16.2% and 16.5% to $699.9 million and
$1,370.2 million for the three and six months ended
June 30, 2002, respectively. The sales growth in our
domestic distribution segment is primarily attributable to the
impact of the Cole-Parmer acquisition completed in 2001. We
realized organic sales growth of approximately 5% to 6% for the
six months ended June 30, 2002. We are forecasting full
year domestic distribution sales growth to range between 13.0%
and 14.0% for 2002, reflecting growth in our base business and
the impact of acquisitions completed in 2001.

Sales in the international distribution segment
increased 2.6% and remained flat to $106.5 million and
$214.3 million for the three and six months ended
June 30, 2002, respectively. Excluding the effect of
foreign exchange, sales for the three months ended June 30,
2002 remained flat versus the same period a year ago. Excluding
the effect of foreign exchange, sales for the six months ended
June 30, 2002 grew less than one percent to
$215.7 million. These sales growth rates reflect the
expected disruption associated with our 2001 restructuring plan.
We are forecasting the full year international distribution
segment sales growth rate to

15



---



##### Table of Contents



range between 4.0% and 4.5% for 2002, excluding
the effect of foreign exchange. The increase in growth rates
reflects the acquisition of Retsch and Emergo offset in part by
the year-to-date sales growth trends of this segment.


Sales in the laboratory workstations segment
increased 5.8% and 3.9% to $47.3 million and
$89.9 million for the three and six months ended
June 30, 2002, respectively. Backlog has remained stable at
$110.0 million. However, the current economic uncertainty
and the potential impact on capital spending has led us to keep
our outlook for full-year sales growth between 2.5% and 3.0% for
2002.

Gross
Profit

Gross profit for the three and six months ended
June 30, 2002 increased 18.8% and 18.2% to
$213.5 million or 26.4% of sales and $418.6 million or
26.4% of sales, respectively, from $179.7 million or 25.4%
of sales and $354.1 million or 25.4% of sales for the
comparable periods in 2001. The increase in gross profit as a
percentage of sales was attributable to our acquisitions
completed in 2001. We expect gross profit as a percentage of
sales to remain consistent with our second quarter level.

Selling,
General and Administrative Expense

Selling, general and administrative expense
increased 13.8% and 13.9% to $152.3 million or 18.8% of
sales and $303.6 million or 19.2% of sales for the three
and six months ended June 30, 2002, respectively, from
$133.8 million or 18.9% of sales and $266.6 million or
19.1% of sales for the corresponding periods in 2001. Excluding
goodwill amortization of $4.4 million, selling, general and
administrative expense for the three months ended June 30,
2001 was $129.4 million or 18.3% of sales. Excluding
goodwill amortization of $8.2 million, selling, general and
administrative expense for the six months ended June 30,
2001 was $258.4 million or 18.5% of sales. The increase in
selling, general and administrative expense as a percentage of
sales was attributable to acquisitions completed in 2001,
primarily Cole-Parmer, partially offset by improvements in our
base business as a result of both fixed-cost leverage and
savings from our 2001 restructuring plan. We anticipate selling,
general and administrative expense as a percentage of sales to
remain consistent with second quarter levels for the full year.

Restructuring
and Other Charges (Credits)

We recorded a net restructuring credit of
$1.5 million in the current quarter related to our 2001
restructuring plans. The restructuring credit is primarily
related to a reduction in estimated severance costs of
approximately $1.6 million due to certain employees
electing to voluntarily separate from the Company as well as
outplacement costs being less than anticipated. Additionally, we
recorded an additional $0.1 million related to certain exit
costs that could not be estimated at the time the plan was
announced and recorded.

During the first quarter of 2001, we recorded a
restructuring charge of $18.1 million and a primarily
non-cash compensation charge of $33.5 million in connection
with our May 2001 stock offering process for the accelerated
vesting of common stock options. Domestic distribution,
international distribution and laboratory workstations segments
account for $15.4 million, $2.6 million and
$0.1 million of the restructuring charge recorded in the
first quarter of 2001. We invested the net savings realized from
this plan into improved systems and our workforce.

Income from Operations

Income from operations increased to
$62.7 million or 7.7% of sales and $116.5 million or
7.4% of sales for the three and six months ended June 30,
2002, respectively, from $45.9 million or 6.5% of sales and
$35.9 million or 2.6% of sales for the comparable periods
in 2001. Excluding the restructuring credit of
$1.5 million, as discussed above, for the three and six
months ended June 30, 2002 income from operations was
$61.2 million or 7.6% of sales and $115.0 million or
7.3% of sales, respectively. Excluding restructuring and other
nonrecurring charges of $52.7 million and goodwill
amortization of $4.4 million and $8.2 million, both as
discussed above, income from operations was $50.3 million
or 7.1% of sales and $96.8 million or 6.9% of sales for the
three and six months ended June 30, 2001, respectively. The
increase in income from

16



---



##### Table of Contents



operations as a percentage of sales for the three
months ended June 30, 2002 was attributable to improvements
in our base business and our acquisitions completed in 2001. The
increase in income from operations as a percentage of sales for
the six months ended June 30, 2002 was primarily
attributable to the acquisition of Cole-Parmer. We expect the
trend of operating margin improvement to continue for the
remainder of the year.


Income from operations in the domestic
distribution segment increased to $53.7 million or 7.7% of
sales and $101.1 million or 7.4% of sales for the three and
six months ended June 30, 2002, respectively, from
$45.4 million or 7.5% of sales and $85.3 million or
7.3% of sales for the comparable periods a year ago. The
increase in income from operations as a percentage of sales for
the domestic distribution segment was attributable to
acquisitions completed during 2001 as well as improvements in
our base business. We expect income from operations as a
percentage of segment sales to range between 7.7% and 7.9% for
2002.

Income from operations in the international
distribution segment increased to $5.0 million or 4.7% of
sales and $9.8 million or 4.6% of sales for the three and
six months ended June 30, 2002, respectively, from
$3.4 million or 3.3% of sales and $8.5 million or 4.0%
of sales for the comparable periods a year ago. The improvement
in income from operations as a percentage of sales is
attributable to our strategy to drive higher-margin sales in our
international distribution segment. We expect income from
operations as a percentage of segment sales to range between
4.6% to 4.9% for 2002.

Income from operations in the laboratory
workstations segment increased to $2.8 million or 5.9% of
sales and $4.5 million or 5.0% of sales for the three and
six months ended June 30, 2002, respectively, from
$1.9 million or 4.3% of sales and $3.4 million or 3.9%
of sales for the comparable periods a year ago. Operating income
in the laboratory workstations segment increased primarily from
an improvement in product mix and manufacturing efficiencies. We
expect income from operations as a percentage of segment sales
to range between 5.3% to 5.6% for 2002, as we continue to focus
on manufacturing efficiencies.

Interest
Expense

Interest expense decreased $1.5 million and
$4.0 million to $22.9 million and $46.8 million
for the three and six months ended June 30, 2002,
respectively. The decrease in interest expense for the three
months ended June 30, 2002 was primarily due to a reduction
in the average outstanding debt balance, partially offset by an
increase in the weighted average interest rate. For the six
months ended June 30, 2002, the decrease in interest
expense was primarily due to a reduction in the average debt
balance outstanding, in addition to a slight decrease in the
weighted average interest rate. As a result of the Note Offering
and repayment of bank term debt in April 2002, we are
forecasting interest expense of approximately $93 million
for 2002.

Other
(Income) Expense, net

Other expense for the three and six months ended
June 30, 2002 was $11.9 million and $11.8 million
compared to $1.2 million and $1.7 million of expense
for the comparable periods a year ago. In connection with our
Note Offering, we recorded a charge in other expense in the
second quarter of 2002 of $11.2 million ($7.1 million,
net of tax) consisting of $7.1 million of fixed-swap unwind
costs and $4.1 million of deferred financing and other
costs associated with the retirement of bank term debt resulting
in the increase in other expense for the periods.

Income Tax
Provision

We recorded an income tax provision of
$7.8 million and $18.0 million for the three and six
months ended June 30, 2002 compared with a
$8.1 million income tax provision and $5.1 million
income tax benefit for the corresponding periods in 2001. The
effective income tax rate for the six month period ended
June 30, 2002 was 32% compared with 40% for the
corresponding period in 2001 excluding restructuring and
nonrecurring charges. Approximately five percentage points of
the improvement in the tax rate are due to recently implemented
tax planning strategies and the other three percentage points
are due to the elimination of non-deductible goodwill
amortization.

17



---



##### Table of Contents



Cumulative
Effect of Accounting Change

In June 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting
Standards No. 141, Business Combinations
(SFAS 141) and Statement of Financial
Accounting Standards No. 142, Goodwill and Other
Intangible Assets (SFAS 142).

SFAS 142 requires the use of a nonamortization
approach to account for goodwill and indefinite-lived intangible
assets. Under the nonamortization approach, goodwill and
indefinite-lived intangible assets will not be amortized but
instead will be reviewed for impairment and written down with a
resulting charge to operations in the period in which the
recorded value of goodwill and indefinite-lived intangible
assets is more than its fair value. The adoption of
SFAS 142 required us to reassess the useful lives and
residual values of all intangible assets and make any necessary
amortization adjustments. Based on that assessment, no
adjustments were made to the amortization period or residual
values of our intangible assets. Additionally, SFAS 142 requires
us to perform an evaluation of whether goodwill and
indefinite-lived intangible assets are impaired as of
January 1, 2002, the effective date of the statement for
us. We have determined that no impairment exists for our
indefinite-lived intangible assets.

SFAS 142 provided a six-month transitional
period from the effective date of adoption to perform our
initial assessment of whether an indication of goodwill
impairment exists. This initial assessment compares the fair
value of the reporting unit to its carrying value, including
goodwill. Fair value was determined using a combination of
discounted cash flow and multiple of earnings valuation
techniques. To the extent that the fair value is less than the
carrying value, we are required to perform a second test to
measure the amount of the goodwill impairment, if any.

During the second quarter of 2002, we completed
our transitional assessment in accordance with these tests to
determine if goodwill was impaired as of January 1, 2002.
As a result, we recorded a non-cash charge of $63.8 million
($46.1 million, net of tax) in our statement of operations
reflecting the cumulative effect of the accounting change to
adjust goodwill to its current fair-value. The international
distribution segment and laboratory workstations segment
accounted for $19.7 million and $44.1 million of the
charge, respectively.

The impairment charge in international
distribution segment related to certain of our smaller market
distribution businesses where current operating performance is
lower than the original forecast. Our laboratory workstations
segment is sensitive to changes in capital spending and several
of the markets the laboratory workstations segment sells to,
including the technology industry, experienced a significant
economic slowdown causing a reduction in spending in those
markets. As a result, sales growth was significantly less than
originally forecasted, resulting in decreased profitability due
to the decreased volume and ensuing pricing pressure.

SFAS 142 also requires that goodwill be
tested annually and between annual tests if events occur or
circumstances change that would more likely than not reduce the
fair value of a reporting unit below its carrying amount. The
Company has elected to perform its annual tests for indications
of goodwill impairment as of October 31 of each year. Future
impairments of goodwill, if any, will be recorded to operating
income in our statement of operations.

Liquidity and Capital Resources

For the six months ended June 30, 2002 we
generated cash from operating activities of $65.6 million
compared with $24.5 million for the same period in 2001.
The increase in cash provided by operating activities is
primarily due to an increase in earnings and continued
improvements in working capital management. We expect cash flow
from operations to be $120.0 million to $130.0 million
for 2002.

During the six months ended June 30, 2002,
we used $16.4 million of cash for investing activities
compared with $171.2 million for the same period in 2001.
The change in cash used for investing activities is attributable
to a decrease in acquisition spending. We expect to invest
between $55.0 million and $65.0 million in capital
expenditures for 2002, reflecting continued facility
consolidations and increased investments in our chemicals
manufacturing and pharmaceutical services capacity. We intend to
continue pursuing acquisitions of complementary business that
will enhance our growth and profitability. As discussed above,
we recently

18



---



##### Table of Contents



completed the acquisition of a Netherlands-based
distributor operating under the names of Retsch and Emergo for a
purchase price of approximately $8.0 million.


During the six months ended June 30, 2002,
financing activities used $82.3 million of cash compared
with providing $282.5 million of cash for the same period
in 2001. A year ago we completed a public offering of our common
stock, generating proceeds of $289.9 million that was used
to fund acquisitions. In April 2002, we issued
$150.0 million of 8 1/8 percent 10-year senior
subordinated notes. We used the net proceeds of the Note
Offering, together with proceeds from the sale of accounts
receivables through our receivables securitization facility and
cash on hand, to retire bank term debt totaling
$211.3 million. In connection with the retirement of the
bank debt, we terminated swap agreements totaling
$7.1 million.

At June 30, 2002 we had $133.2 million
of available borrowing capacity under our revolving credit
facility, net of $41.8 million of letters of credit
outstanding, primarily representing guarantees issued to local
banks in support of borrowings by our foreign subsidiaries. The
full amount of our receivables securitization facility was
available at June 30, 2002. On a regular basis we sell
accounts receivable through our receivables securitization
facility to fund working capital requirements.

We expect that cash flows from operations
together with cash and cash equivalents on hand and funds
available under existing credit facilities will be sufficient to
meet our ongoing operating, capital expenditure and debt service
requirements for at least the next twelve months.

Recent Accounting Pronouncements

In August 2001, the FASB issued Statement of
Financial Accounting Standards No. 143, Accounting
For Asset Retirement Obligations (SFAS 143).
SFAS 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. It
applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition,
construction, development and/or the normal operation of a
long-lived asset, except for certain obligations of lessees.
This standard requires entities to record the fair value of a
liability for an asset retirement obligation in the period
incurred. We do not anticipate the adoption of SFAS 143 as of
January 1, 2003 will have a material effect on our
financial position or results of operations.

In April 2002, the FASB issued Statement of
Financial Accounting Standards No. 145, Rescission of
FASB Statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13, and Technical Correction
(SFAS 145). SFAS 145 provides that a loss on
extinguishment of debt meet the requirements of APB 30 to be
treated as an extraordinary item in the statement of operations.
We have elected to early adopt the provisions of SFAS 145,
related to the rescission of SFAS 4. In connection with the
retirement of bank term debt in April 2002 (see
Note  Senior Subordinated Notes), we recognized
a $3.3 million charge ($2.1 million, net of tax) for
deferred financing costs in other expense, as it does not meet
the requirements for classification as an extraordinary item in
accordance with SFAS 145. Accordingly, the provisions of this
statement have been adopted as of April 1, 2002 and will be
applied prospectively.

In July 2002, the FASB issued Statement of
Financial Accounting Standards No. 146, Accounting
for Exit or Disposal Activities (SFAS 146).
SFAS 146 requires the recognition of a liability for costs
associated with an exit plan or disposal activity when incurred
and nullifies Emerging Issues Task Force (EITF) Issue 94-3,
Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring), which allowed
recognition at the date of an entitys commitment to an
exit plan. The provisions of this statement are effective for
exit or disposal activities that may be initiated by the Company
after December 31, 2002. We do not anticipate the adoption of
SFAS 146 will have a material effect on our financial position
or results of operations.

Critical Accounting Policies

The discussion and analysis of our financial
condition and results of operations are based on our
consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial
statements requires us

19



---



##### Table of Contents



to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. On an on-going basis, management
evaluates its estimates and judgments. Those estimates and
assumptions are based on our historical experience, our
observation of trends in the industry, and various other factors
that are believed to be reasonable under the circumstances; the
results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily
available from other sources. Actual results may differ from
these estimates under different assumptions or conditions.





Item 3  Quantitative and
Qualitative Disclosures About Market Risk

The Companys primary interest rate
exposures relate to its cash, fixed and variable rate debt and
interest rate swaps. The potential loss in fair values is based
on an immediate change in the net present values of the
Companys interest rate sensitive exposures resulting from
a 10% change in interest rates. The potential loss in cash flows
and earnings is based on the change in the net interest income
(expense) over a one-year period due to an immediate 10% change
in rates. A hypothetical 10% change in interest rates does not
have a material effect on the fair values, cash flows or
earnings of the Company.

The Companys primary currency rate
exposures are to its debt, cash, foreign currency forward
contracts and certain of its intercompany debt. The potential
loss in fair values is based on an immediate change in the U.S.
dollar equivalent balances of the Companys currency
exposures due to a 10% shift in exchange rates. The potential
loss in cash flows and earnings is based on the change in cash
flows and earnings over a one-year period resulting from an
immediate 10% change in currency exchange rates. A hypothetical
10% change in the currency exchange rates does not have a
material effect on the fair values, cash flows or earnings of
the Company.




PART II  OTHER
INFORMATION






|         |                                                        
|-------- | -------------------------------------------------------
|Item 4  | Submission of Matters to a Vote of Security
    Holders

(a) The annual meeting of stockholders of
the Company was held on May 8, 2002.

(b) At the annual meeting, Mitchell J.
Blutt, David V. Harkins and Paul M. Meister were each elected as
directors of the Company for a three-year term expiring at the
Annual Meeting in 2005 and until his successor has been elected
and duly qualified.

(c) The results of the voting on the
proposals considered at the annual meeting of stockholders are
as follows:



| |                                 
| | --------------------------------
| | 1.     Election of
    Directors

|                  |  |           |            |               |  |                 |         |  |  |  |   | 
|----------------- |  | --------- | ---------- | ------------- |  | --------------- | ------- |  |  |  | - | 
|                  |  | Votes for |            | Votes Against |  | Votes Abstained
|                  |  |           |            |               |  |                
|Mitchell J. Blutt |  |           | 46,784,092 |               |  |                 | 439,226 |  |  |  |  | 
|David V. Harkins  |  |           | 46,815,350 |               |  |                 | 407,968 |  |  |  |  | 
|Paul M. Meister   |  |           | 46,610,086 |               |  |                 | 613,232 |  |  |  |  | 



| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2.     Proposal to
    Re-Approve the Fisher Scientific International Inc. Incentive
    Compensation Plan                                               
|
| | The proposal to re-approve the Fisher Scientific
    International Inc. Incentive Compensation Plan was ratified, and
    voting results were as follows:



| |                                                        
| | -------------------------------------------------------
| | 46,871,130 FOR, 331,294 AGAINST, and 20,894
    ABSTAIN

20



---



##### Table of Contents





| |                                               
| | ----------------------------------------------
| | 3.     Appointment of
    Independent Auditors



| |                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------
| | The appointment of Deloitte & Touche LLP as
    independent auditors for the current year was ratified, and
    voting results were as follows:



| |                                                   
| | --------------------------------------------------
| | 46,747,827 FOR, 468,388 AGAINST, and 7,103 ABSTAIN




Item 6  Exhibits and
Reports on Form 8-K

(b) Reports on Form 8-K:



| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company filed a current report on Form 8-K,
    dated April 23, 2002, announcing the offering of $150 million of
    8 1/8 Senior subordinated notes due 2012.

21



---



##### Table of Contents






SIGNATURE

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.



| |                                                 
| | ------------------------------------------------
| | FISHER SCIENTIFIC INTERNATIONAL INC.            
|
| | /s/ KEVIN P. CLARK                              
| |                                                 
| | Kevin P. Clark                                  
| | Vice President and Chief Financial
    Officer  
| | (Principal Financial and Accounting
    Officer)

Date: August 14, 2002

22