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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




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Form 10-Q



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QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended
September 30, 2001

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 October 31, 2001 was 54,019,609.



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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                 
|                                                                                                | 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 6 -- Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                                                                                      



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FISHER SCIENTIFIC INTERNATIONAL INC.

Form 10-Q

For the Quarter Ended September 30,
2001


INDEX

|                                                                                                               |                                                                                           |          |    |   | 
|-------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------- | -- | - | 
|                                                                                                               |                                                                                           | Page No.
|                                                                                                               |                                                                                           |         
|Part I  FINANCIAL
        INFORMATION:                                                                        |                                                                                           |          |    |  
|Item 1  Financial Statements:                                                                                 |                                                                                           |          |    |  
|                                                                                                               | Introduction to the Financial Statements                                                  |          |    | 2 | 
|                                                                                                               | Statement of Operations  Three and
        Nine Months Ended September 30, 2001 and 2000 |          |    | 3 | 
|                                                                                                               | Balance Sheet  September 30, 2001
        and December 31, 2000.                         |          |    | 4 | 
|                                                                                                               | Statement of Cash Flows  Nine Months
        Ended September  30, 2001 and 2000.         |          |    | 5 | 
|                                                                                                               | Notes to Financial Statements                                                             |          |    | 6 | 
|Item 2  Managements
        Discussion and Analysis of Results of Operations and Financial
        Condition |                                                                                           |          | 12 |  
|Item 3  Quantitative and
        Qualitative Disclosures About Market Risk                                    |                                                                                           |          | 16 |  
|                                                                                                              
|PART II  OTHER
        INFORMATION:                                                                           |                                                                                           |          |    |  
|Item 6  Exhibits and Reports on
        Form 8-K                                                              |                                                                                           |          | 17 |  
|SIGNATURE                                                                                                      |                                                                                           |          | 18 |  

1



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##### 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, 2000 balance sheet is the balance sheet
included in the audited financial statements as shown in the
Companys 2000 Annual Report on Form 10-K. The Company
believes that the disclosures are adequate to make the
information presented not misleading when read in conjunction
with the financial statements included in the Companys
Annual Report on Form 10-K for the year ended
December 31, 2000.

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

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FISHER SCIENTIFIC INTERNATIONAL INC.






STATEMENT OF OPERATIONS


|                                            |         |                                      |       |                   |  |      |       |      |  |   |         |      |  |   |         |      | 
|------------------------------------------- | ------- | ------------------------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                            |         |                                      |       |                  
|                                            |         | Three Months Ended                   |       | Nine Months Ended
|                                            |         | September 30,                        |       | September 30,    
|                                            |         |                                      |       |                  
|                                            |         | 2001                                 |       | 2000              |  | 2001 |       | 2000
|                                            |         |                                      |       |                   |  |      |       |     
|                                            |         |                                     
|                                            |         | (in millions, except per share data)
|                                            |         |                                     
|                                            |         | (unaudited)                         
|Sales                                       |         | $                                    | 729.5 |                   |  | $    | 662.3 |      |  | $ | 2,125.3 |      |  | $ | 1,977.6 |     
|Cost of sales                               |         |                                      | 543.9 |                   |  |      | 499.4 |      |  |   | 1,585.6 |      |  |   | 1,487.8 |     
|Selling, general and administrative expense |         |                                      | 133.4 |                   |  |      | 122.7 |      |  |   | 400.0   |      |  |   | 369.4   |     
|Restructuring and other charges (credits)   |         |                                      |      |                   |  |      | (2.0  | )    |  |   | 51.6    |      |  |   | (2.0    | )   
|                                            |         |                                      |       |                   |  |      |       |      |  |   |         |      |  |   |         |     
|Income from operations                      |         |                                      | 52.2  |                   |  |      | 42.2  |      |  |   | 88.1    |      |  |   | 122.4   |     
|Interest expense                            |         |                                      | 24.1  |                   |  |      | 24.4  |      |  |   | 74.9    |      |  |   | 75.0    |     
|Other (income) expense, net                 |         |                                      | (0.1  | )                 |  |      | (1.3  | )    |  |   | 1.6     |      |  |   | (4.3    | )   
|                                            |         |                                      |       |                   |  |      |       |      |  |   |         |      |  |   |         |     
|Income before income taxes                  |         |                                      | 28.2  |                   |  |      | 19.1  |      |  |   | 11.6    |      |  |   | 51.7    |     
|Income tax provision                        |         |                                      | 11.3  |                   |  |      | 6.0   |      |  |   | 6.2     |      |  |   | 20.7    |     
|                                            |         |                                      |       |                   |  |      |       |      |  |   |         |      |  |   |         |     
|Net income                                  |         | $                                    | 16.9  |                   |  | $    | 13.1  |      |  | $ | 5.4     |      |  | $ | 31.0    |     
|                                            |         |                                      |       |                   |  |      |       |      |  |   |         |      |  |   |         |     
|Net income per common share:                |         |                                      |       |                   |  |      |       |      |  |   |         |      |  |   |         |     
|                                            | Basic   |                                      | $     | 0.31              |  |      | $     | 0.33 |  |   | $       | 0.11 |  |   | $       | 0.77 | 
|                                            |         |                                      |       |                   |  |      |       |      |  |   |         |      |  |   |         |     
|                                            | Diluted |                                      | $     | 0.30              |  |      | $     | 0.30 |  |   | $       | 0.10 |  |   | $       | 0.70 | 
|                                            |         |                                      |       |                   |  |      |       |      |  |   |         |      |  |   |         |     

See the accompanying notes to financial
statements.

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FISHER SCIENTIFIC INTERNATIONAL INC.






BALANCE SHEET


|                                                |                                       |                                                       |       |              |         |  |       |        |         |  
|----------------------------------------------- | ------------------------------------- | ----------------------------------------------------- | ----- | ------------ | ------- |  | ----- | ------ | ------- | -
|                                                |                                       | September 30,                                         |       | December 31,
|                                                |                                       | 2001                                                  |       | 2000        
|                                                |                                       |                                                       |       |             
|                                                |                                       | (unaudited)                                           |       |             
|                                                |                                       |                                                      
|                                                |                                       | (in millions)                                        
|ASSETS                                          |                                       |                                                       |       |              |         |  |       |       
|Current assets:                                 |                                       |                                                       |       |              |         |  |       |       
|                                                | Cash and cash equivalents             |                                                       | $     | 229.8        |         |  | $     | 66.0   |        
|                                                | Receivables, net                      |                                                       |       | 344.0        |         |  |       | 296.8  |        
|                                                | Inventories                           |                                                       |       | 248.2        |         |  |       | 224.2  |        
|                                                | Other current assets                  |                                                       |       | 77.0         |         |  |       | 63.6   |        
|                                                |                                       |                                                       |       |              |         |  |       |       
|                                                |                                       | Total current assets                                  |       |              | 899.0   |  |       |        | 650.6   |  
|Property, plant and equipment                   |                                       |                                                       | 305.8 |              |         |  | 251.3 |       
|Goodwill                                        |                                       |                                                       | 406.7 |              |         |  | 334.2 |       
|Other assets                                    |                                       |                                                       | 167.5 |              |         |  | 149.6 |       
|                                                |                                       |                                                       |       |              |         |  |       |       
|                                                |                                       | Total assets                                          |       | $            | 1,779.0 |  |       | $      | 1,385.7 |  
|                                                |                                       |                                                       |       |              |         |  |       |       
|LIABILITIES AND STOCKHOLDERS EQUITY
	(DEFICIT) |                                       |                                                       |       |              |         |  |       |       
|Current liabilities:                            |                                       |                                                       |       |              |         |  |       |       
|                                                | Short-term debt                       |                                                       | $     | 71.1         |         |  | $     | 47.6   |        
|                                                | Accounts payable                      |                                                       |       | 328.0        |         |  |       | 308.5  |        
|                                                | Accrued and other current liabilities |                                                       |       | 174.2        |         |  |       | 151.7  |        
|                                                |                                       |                                                       |       |              |         |  |       |       
|                                                |                                       | Total current liabilities                             |       |              | 573.3   |  |       |        | 507.8   |  
|Long-term debt                                  |                                       |                                                       | 974.9 |              |         |  | 991.1 |       
|Other liabilities                               |                                       |                                                       | 218.7 |              |         |  | 198.5 |       
|                                                |                                       |                                                       |       |              |         |  |       |       
|                                                |                                       | Total liabilities                                     |       |              | 1,766.9 |  |       |        | 1,697.4 |  
|                                                |                                       |                                                       |       |              |         |  |       |       
|Commitments and contingencies                   |                                       |                                                       |       |              |         |  |       |       
|Stockholders equity (deficit):                 |                                       |                                                       |       |              |         |  |       |       
|                                                | Preferred stock                       |                                                       |       |             |         |  |       |       |        
|                                                | Common stock                          |                                                       |       | 0.5          |         |  |       | 0.4    |        
|                                                | Capital in excess of par value        |                                                       |       | 656.3        |         |  |       | 326.0  |        
|                                                | Accumulated deficit                   |                                                       |       | (566.5       | )       |  |       | (571.9 | )      
|                                                | Accumulated other comprehensive loss  |                                                       |       | (77.2        | )       |  |       | (65.9  | )      
|                                                | Treasury stock, at cost               |                                                       |       | (1.0         | )       |  |       | (0.3   | )      
|                                                |                                       |                                                       |       |              |         |  |       |       
|                                                |                                       | Total stockholders equity (deficit)                  |       |              | 12.1    |  |       |        | (311.7  | )
|                                                |                                       |                                                       |       |              |         |  |       |       
|                                                |                                       | Total liabilities and stockholders equity
	(deficit) |       | $            | 1,779.0 |  |       | $      | 1,385.7 |  
|                                                |                                       |                                                       |       |              |         |  |       |       

See the accompanying notes to financial
statements.

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FISHER SCIENTIFIC INTERNATIONAL INC.






STATEMENT OF CASH FLOWS


|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |       |       |       |  
|------------------------------------------------------------- | ------------------------------------------------------------------------------ | ---------------------------------------------------------------------- | ---------------------------------------------- | ------ | ---- | ------ | ----- | ----- | ----- | ----- | -
|                                                              |                                                                                |                                                                       
|                                                              |                                                                                | Nine Months Ended                                                     
|                                                              |                                                                                | September 30,                                                         
|                                                              |                                                                                |                                                                       
|                                                              |                                                                                | 2001                                                                   |                                                | 2000  
|                                                              |                                                                                |                                                                        |                                                |       
|                                                              |                                                                                |                                                                       
|                                                              |                                                                                | (in millions)                                                         
|                                                              |                                                                                |                                                                       
|                                                              |                                                                                | (unaudited)                                                           
|Cash flows from operating activities:                         |                                                                                |                                                                        |                                                |        |      |        |       |      
|                                                              | Net income                                                                     |                                                                        | $                                              | 5.4    |      |        | $     | 31.0  |      
|                                                              | Adjustments to reconcile net income to cash
	provided by operating activities: |                                                                        |                                                |        |      |        |       |       |      
|                                                              |                                                                                | Restructuring and other charges, net of cash
	expended                 |                                                |        | 42.9 |        |       |       | (2.0  | )    
|                                                              |                                                                                | Depreciation and amortization                                          |                                                |        | 59.6 |        |       |       | 47.5  |      
|                                                              |                                                                                | Loss on sale of property, plant and equipment and
	write-off of assets |                                                |        | 0.2  |        |       |       | 0.5   |      
|                                                              |                                                                                | Deferred income taxes                                                  |                                                |        | (7.1 | )      |       |       | 3.5   |      
|                                                              |                                                                                | Equity in loss of unconsolidated affiliates                            |                                                |        | 5.1  |        |       |       | 0.4   |      
|                                                              |                                                                                | Other non-cash expenses                                                |                                                |        | 0.5  |        |       |       | 1.0   |      
|                                                              |                                                                                | Changes in working capital, net of effects of
	acquisitions:           |                                                |        |      |        |       |       |       |      
|                                                              |                                                                                |                                                                        | Receivables, net                               |        |      | (20.2  | )     |       |       | (13.9 | )
|                                                              |                                                                                |                                                                        | Inventories                                    |        |      | (5.2   | )     |       |       | (13.5 | )
|                                                              |                                                                                |                                                                        | Accounts payable                               |        |      | 12.4   |       |       |       | 6.6   |  
|                                                              |                                                                                |                                                                        | Other working capital changes                  |        |      | (14.8  | )     |       |       | 3.3   |  
|                                                              |                                                                                | Other assets and liabilities                                           |                                                |        | (1.0 | )      |       |       | (12.6 | )    
|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |      
|                                                              |                                                                                |                                                                        | Cash provided by operating activities          |        |      | 77.8   |       |       |       | 51.8  |  
|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |      
|Cash flows from investing activities:                         |                                                                                |                                                                        |                                                |        |      |        |       |      
|                                                              | Acquisitions, net of cash acquired                                             |                                                                        |                                                | (163.9 | )    |        |       | (22.3 | )    
|                                                              | Capital expenditures                                                           |                                                                        |                                                | (23.8  | )    |        |       | (18.7 | )    
|                                                              | Proceeds from sale of property, plant and
	equipment                           |                                                                        |                                                | 0.1    |      |        |       | 0.8   |      
|                                                              | Other investing activity                                                       |                                                                        |                                                | (9.2   | )    |        |       | (6.2  | )    
|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |      
|                                                              |                                                                                |                                                                        | Cash used in investing activities              |        |      | (196.8 | )     |       |       | (46.4 | )
|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |      
|Cash flows from financing activities:                         |                                                                                |                                                                        |                                                |        |      |        |       |      
|                                                              | Proceeds from stock options exercised                                          |                                                                        |                                                | 1.5    |      |        |       | 0.3   |      
|                                                              | Proceeds from accounts receivable securitization,
	net                         |                                                                        |                                                |       |      |        |       | (21.7 | )    
|                                                              | Proceeds from sale of common stock                                             |                                                                        |                                                | 289.9  |      |        |       |      |      
|                                                              | Proceeds from long-term debt                                                   |                                                                        |                                                |       |      |        |       | 8.3   |      
|                                                              | Acquisition of treasury stock                                                  |                                                                        |                                                | (0.7   | )    |        |       |      |      
|                                                              | Payments of long-term debt                                                     |                                                                        |                                                | (13.8  | )    |        |       | (11.7 | )    
|                                                              | Changes in short-term debt, net                                                |                                                                        |                                                | 5.8    |      |        |       | 6.2   |      
|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |      
|                                                              |                                                                                |                                                                        | Cash provided by (used in)financing activities |        |      | 282.7  |       |       |       | (18.6 | )
|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |      
|Effect of exchange rate changes on cash and cash
	equivalents |                                                                                |                                                                        | 0.1                                            |        |      |        | (2.9  | )    
|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |      
|Net change in cash and cash equivalents                       |                                                                                |                                                                        | 163.8                                          |        |      |        | (16.1 | )    
|Cash and cash equivalents  beginning
	of period              |                                                                                |                                                                        | 66.0                                           |        |      |        | 50.3  |      
|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |      
|Cash and cash equivalents  end of
	period                    |                                                                                | $                                                                      | 229.8                                          |        |      | $      | 34.2  |      
|                                                              |                                                                                |                                                                        |                                                |        |      |        |       |      

See the accompanying notes to financial
statements.

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FISHER SCIENTIFIC INTERNATIONAL INC.






NOTES TO FINANCIAL STATEMENTS


(unaudited)


Note 1  Nature of Business and
Results of Operations

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 is
managed in three business segments: domestic distribution,
international distribution, and laboratory workstations. The
domestic and international distribution segments engage in the
supply, marketing, service and manufacture of scientific,
clinical, educational, and occupational health and safety
products. The laboratory workstations segment manufactures
laboratory workstations, fume hoods and enclosures for
technology and communication centers.

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

Note 2  Public Offering of Common
Stock

On May 9, 2001, the Company sold
12.8 million shares of common stock, including
1.8 million shares in connection with the
underwriters over-allotment option, to the public at a
price of $24.00 per share. An additional 1.0 million shares
were sold by employees and other individuals from shares
distributed from a rabbi trust set up in connection with the
Companys recapitalization in 1998 to meet tax obligations
triggered by the offering. Proceeds to the Company from the
offering were approximately $289.9 million, net of
underwriters discounts and offering costs. The Company did
not receive any proceeds for the sale of shares by the selling
stockholders.

Note 3  Acquisitions

In February 2001, the Company acquired the
pharmaceutical packaging services business of Covance, Inc. and
renamed it Fisher Clinical Services Inc. (FCS). FCS
provides pharmaceutical and biotechnology companies and other
customers outsourced packaging, labeling and distribution
services related to prescription drugs undergoing phase III and
IV clinical trials. The adjusted purchase price of
$132.7 million was financed through the sale of receivables
under the Companys receivables securitization facility.
The acquisition was accounted for using the purchase method of
accounting. The results of FCS have been included in the
domestic distribution segment from the date of acquisition.

In June 2001, the Company acquired a controlling
interest in Medical Analysis Systems, Inc. (MAS)
after having acquired a non-controlling interest in March 2001.
MAS is a leading manufacturer of controls and reagents for the
clinical laboratory market. In July 2001, the Company acquired
Safety Equipment Company, a distributor of safety supplies and
personal protection equipment. The acquisitions, having an
aggregate purchase price of approximately $31.2 million,
were accounted for under the purchase method of accounting. The
results of these entities have been included in the domestic
distribution segment from their respective dates of acquisition.
Prior to June 2001, the Company accounted for its investment in
MAS using the equity method of accounting. The pro forma effect
of these acquisitions is not material to the Companys
financial statements.

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FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL STATEMENTS 
(Continued)

(unaudited)


Note 4  Inventories

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

|                  |       |               |       |              |  |   |       |       | 
|----------------- | ----- | ------------- | ----- | ------------ |  | - | ----- | ----- | 
|                  |       | September 30, |       | December 31,
|                  |       | 2001          |       | 2000        
|                  |       |               |       |             
|Raw materials     |       | $             | 39.2  |              |  | $ | 28.8  |      
|Work in process   |       |               | 9.7   |              |  |   | 6.9   |      
|Finished products |       |               | 199.3 |              |  |   | 188.5 |      
|                  |       |               |       |              |  |   |       |      
|                  | Total |               | $     | 248.2        |  |   | $     | 224.2 | 
|                  |       |               |       |              |  |   |       |      

Note 5  Derivative Financial
Instruments

Effective January 1, 2001, Fisher adopted
Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments and Hedging
Activities (SFAS 133), as amended, which
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded
in other contracts and for hedging activities. All derivatives,
whether designated in hedging relationships or not, are required
to be recorded on the balance sheet at fair value. If the
derivative is designated as a fair value hedge, the changes in
the fair value of the derivative and of the hedged item
attributable to the hedged risk are recognized in earnings. If
the derivative is designated as a cash flow hedge, the effective
portions of changes in the fair value of the derivative are
recorded in other comprehensive income (OCI) and are
recognized in the income statement when the hedged item affects
earnings. Ineffective portions of changes in the fair value of
cash flow hedges are recognized in earnings. For derivative
instruments not designated as hedging instruments, changes in
fair value are recognized in earnings in the current period. The
adoption of SFAS 133, as amended, resulted in a
$0.8 million pre-tax ($0.5 million after-tax)
reduction to OCI on January 1, 2001.

The nature of Fishers business activities
necessarily involves the management of various financial and
market risks, including those related to changes in interest
rates and foreign currency exchange rates. As discussed more
fully in notes 3, 6 and 12 to the financial statements
appearing in the Companys 2000 Annual Report on
Form 10-K, Fisher uses derivative financial instruments to
mitigate or eliminate certain of those risks. The Company
assesses, both at the inception of the hedge and on an on-going
basis, whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in cash
flows of hedged items. When it is determined that a derivative
is not highly effective as a hedge, the Company discontinues
hedge accounting prospectively. Fisher does not hold derivatives
for trading purposes.

The Company enters into interest-rate swap
agreements in order to manage its exposure to interest rate
risk. These interest rate swaps are designated as cash flow
hedges of Fishers variable rate debt. During the three and
nine months ended September 30, 2001, no ineffectiveness
was recognized in the statement of operations on these hedges.
Amounts accumulated in OCI are reclassified into earnings as
interest is accrued on the hedged transactions. The amounts
accumulated in OCI will fluctuate based on changes in the fair
value of the Companys derivatives at each reporting period.

Note 6  Comprehensive Income
(Loss)

The following is a summary of comprehensive
income (loss) for the three and nine months ended
September 30, 2001 and 2000 (in millions). Comprehensive
income (loss) components included in stockholders equity
(deficit) include any changes in equity during a period that are
not the result of transactions with the Companys
stockholders.

7



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##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL STATEMENTS 
(Continued)

(unaudited)


|                                                           |                             |               |      |               |  |      |       |      |  |   |      |      |   |   |       |      | 
|---------------------------------------------------------- | --------------------------- | ------------- | ---- | ------------- |  | ---- | ----- | ---- |  | - | ---- | ---- | - | - | ----- | ---- | 
|                                                           |                             |               |      |              
|                                                           |                             | Three Months  |      | Nine Months  
|                                                           |                             | Ended         |      | Ended        
|                                                           |                             | September 30, |      | September 30,
|                                                           |                             |               |      |              
|                                                           |                             | 2001          |      | 2000          |  | 2001 |       | 2000
|                                                           |                             |               |      |               |  |      |       |     
|Net income                                                 |                             | $             | 16.9 |               |  | $    | 13.1  |      |  | $ | 5.4  |      |   | $ | 31.0  |     
|Foreign currency translation adjustment                    |                             |               | 16.3 |               |  |      | (13.0 | )    |  |   | (5.0 | )    |   |   | (25.3 | )   
|Change in unrealized fair value of derivative
	instruments |                             |               | (3.8 | )             |  |      |      |      |  |   | (6.6 | )    |   |   |      |     
|Unrealized investment gain                                 |                             |               |     |               |  |      | 4.6   |      |  |   | 0.3  |      |   |   | 6.1   |     
|                                                           |                             |               |      |               |  |      |       |      |  |   |      |      |   |   |       |     
|                                                           | Comprehensive income (loss) |               | $    | 29.4          |  |      | $     | 4.7  |  |   | $    | (5.9 | ) |   | $     | 11.8 | 
|                                                           |                             |               |      |               |  |      |       |      |  |   |      |      |   |   |       |     

Note 7  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 nine months ended September 30, 2001 and
2000 (in millions):

|                                                                                                         |  |               |      |               |  |      |      |      |  |  |      |  |  |  |      | 
|-------------------------------------------------------------------------------------------------------- |  | ------------- | ---- | ------------- |  | ---- | ---- | ---- |  |  | ---- |  |  |  | ---- | 
|                                                                                                         |  |               |      |              
|                                                                                                         |  | Three Months  |      | Nine Months  
|                                                                                                         |  | Ended         |      | Ended        
|                                                                                                         |  | September 30, |      | September 30,
|                                                                                                         |  |               |      |              
|                                                                                                         |  | 2001          |      | 2000          |  | 2001 |      | 2000
|                                                                                                         |  |               |      |               |  |      |      |     
|Weighted average shares of common stock
	outstanding used in the computation of basic earnings per share |  |               | 54.0 |               |  |      | 40.1 |      |  |  | 47.8 |  |  |  | 40.1 | 
|Common stock equivalents (a)                                                                             |  |               | 3.1  |               |  |      | 3.5  |      |  |  | 3.8  |  |  |  | 4.2  | 
|                                                                                                         |  |               |      |               |  |      |      |      |  |  |      |  |  |  |      | 
|Shares used in the computation of diluted
	earnings per share                                            |  |               | 57.1 |               |  |      | 43.6 |      |  |  | 51.6 |  |  |  | 44.3 | 
|                                                                                                         |  |               |      |               |  |      |      |      |  |  |      |  |  |  |      | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The amount of outstanding antidilutive common
	stock options and warrants excluded from the computation of
	diluted earnings per share for the three and nine months ended
	September  30, 2001 was 1.4 million and
	0.9 million, respectively. The amount of outstanding
	antidilutive common stock options and warrants excluded from the
	computation of diluted earnings per share for the three and nine
	months ended September 30, 2000 was 0.6  million and
	0.3 million, respectively.

Note 8  Restructuring and Other
Charges

During the first quarter of 2001, the Company
adopted and commenced implementation of a streamlining plan (the
Plan) aimed at improving its operations, largely
through office, warehouse and manufacturing facility
consolidations and the discontinuance of certain product lines.
The Company recorded a restructuring charge of
$18.1 million in the first quarter of 2001. Upon adoption
of the Plan, the Company anticipated incurring approximately an
additional $7.0 million of nonrecurring expenses related to
the Plan, of which the Company has incurred $5.6 million
for the nine months ended September 30, 2001.

The restructuring charge consisted of
$10.9 million in accruals for employee termination and
other severance costs associated with approximately 500 salaried
and hourly employees who were severed as part of the Plan and
$7.2 million of exit costs relating primarily to lease
cancellation costs and costs associated with the discontinuation
of certain product lines. As of September 30, 2001, the
Company has spent $8.2 million of the $18.1 million
accrued.

In March 2001, the Company accelerated the
vesting of approximately 2.3 million common stock options having
an average exercise price of $20.85 per share. These options
were then converted into the right to receive approximately
1.0 million shares of common stock, which were issued and
deposited into a rabbi trust. The number of shares
issued was determined by dividing the spread value
of the option (the difference between the last reported sale
price on March 30, 2001 of $35.44 and the exercise price of
the

8



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##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL STATEMENTS 
(Continued)

(unaudited)


option) by $35.44. As a result of these
transactions, the Company recorded a primarily non-cash
compensation charge of $33.5 million during the first
quarter of 2001.

Note 9  Other (Income)
Expense

Other (income) expense, includes the
Companys equity in the losses of unconsolidated affiliates
totaling $0.3 million and $5.1 million for the three
and nine months ended September 30, 2001, respectively.

Note 10  Segment
Information

Selected business segment financial information
for the three and nine months ended September 30, 2001 and
2000 is shown below (in millions):

|       |                            |               |   |                   |       |      |   |       |       |  |   |         |         |  |   |         |         | 
|------ | -------------------------- | ------------- | - | ----------------- | ----- | ---- | - | ----- | ----- |  | - | ------- | ------- |  | - | ------- | ------- | 
|       |                            |               |   |                   |       |     
|       |                            | Three Months  |   |                  
|       |                            | Ended         |   | Nine Months Ended
|       |                            | September 30, |   | September 30,    
|       |                            |               |   |                  
|       |                            | 2001          |   | 2000              |       | 2001 |   | 2000 
|       |                            |               |   |                   |       |      |   |      
|Sales: |                            |               |   |                   |       |      |   |       |       |  |   |         |         |  |   |        
|       | Domestic distribution      |               | $ | 619.9             |       |      | $ | 560.7 |       |  | $ | 1,795.8 |         |  | $ | 1,653.0 |        
|       | International distribution |               |   | 105.8             |       |      |   | 100.3 |       |  |   | 320.2   |         |  |   | 316.4   |        
|       | Laboratory workstations    |               |   | 45.6              |       |      |   | 39.6  |       |  |   | 132.1   |         |  |   | 122.1   |        
|       | Eliminations               |               |   | (41.8             | )     |      |   | (38.3 | )     |  |   | (122.8  | )       |  |   | (113.9  | )      
|       |                            |               |   |                   |       |      |   |       |       |  |   |         |         |  |   |        
|       |                            | Total         |   | $                 | 729.5 |      |   | $     | 662.3 |  |   | $       | 2,125.3 |  |   | $       | 1,977.6 | 
|       |                            |               |   |                   |       |      |   |       |       |  |   |         |         |  |   |        

|                        |                                 |                   |       |                   |      |      |   |      |      |      |   |       |       |      |   |       |       |       | 
|----------------------- | ------------------------------- | ----------------- | ----- | ----------------- | ---- | ---- | - | ---- | ---- | ---- | - | ----- | ----- | ---- | - | ----- | ----- | ----- | 
|                        |                                 |                   |       |                   |      |     
|                        |                                 | Three Months      |       |                  
|                        |                                 | Ended             |       | Nine Months Ended
|                        |                                 | September 30,     |       | September 30,    
|                        |                                 |                   |       |                  
|                        |                                 | 2001              |       | 2000              |      | 2001 |   | 2000
|                        |                                 |                   |       |                   |      |      |   |     
|Income from operations: |                                 |                   |       |                   |      |      |   |      |      |      |   |       |       |      |   |      
|                        | Domestic distribution           |                   | $     | 47.1              |      |      | $ | 42.4 |      |      | $ | 128.5 |       |      | $ | 116.7 |      
|                        | International distribution      |                   |       | 3.1               |      |      |   | 2.8  |      |      |   | 9.2   |       |      |   | 7.1   |      
|                        | Laboratory workstations         |                   |       | 1.8               |      |      |   | 0.8  |      |      |   | 3.3   |       |      |   | 2.9   |      
|                        | Eliminations                    |                   |       | 0.2               |      |      |   | (0.3 | )    |      |   | (0.2  | )     |      |   | (0.8  | )    
|                        |                                 |                   |       |                   |      |      |   |      |      |      |   |       |       |      |   |      
|                        |                                 | Segment sub-total |       |                   | 52.2 |      |   |      | 45.7 |      |   |       | 140.8 |      |   |       | 125.9 |      
|                        | Restructuring and other charges |                   |       |                  |      |      |   | (3.5 | )    |      |   | (52.7 | )(a)  |      |   | (3.5  | )    
|                        |                                 |                   |       |                   |      |      |   |      |      |      |   |       |       |      |   |      
|                        |                                 |                   | Total |                   | $    | 52.2 |   |      | $    | 42.2 |   |       | $     | 88.1 |   |       | $     | 122.4 | 
|                        |                                 |                   |       |                   |      |      |   |      |      |      |   |       |       |      |   |      

Income from operations is revenue less related
costs and direct and allocated expenses. Intercompany sales and
transfers between segments were not material for the three and
nine months ended September 30, 2001 and 2000.



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 2001 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
	addition, the Company accelerated the vesting of common stock
	options and recorded a primarily non-cash compensation charge of
	$33.5 million in the first quarter.

9



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##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL STATEMENTS 
(Continued)

(unaudited)


Note 11  Recent Accounting
Pronouncements

In July 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 eliminates the pooling-of-interests
method for business combinations. SFAS 141 also specifies
the types of acquired intangible assets that are required to be
recognized and reported separately from goodwill and those
acquired intangible assets that are required to be included in
goodwill. SFAS 141 shall be effective for all business
combinations completed by the Company after June 30, 2001.
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, shall not be amortized. Goodwill and intangible assets
acquired in business combinations completed prior to
July 1, 2001, shall continue to be amortized until
December 31, 2001.

SFAS 142 requires the use of a nonamortization
approach to account for purchased goodwill and certain
intangibles. Under the nonamortization approach, goodwill and
certain intangibles will not be amortized in results of
operations, but instead would be reviewed for impairment and
written down with a resulting charge to operations only in the
period in which the recorded value of goodwill and certain
intangibles is more than its fair value. SFAS 142 requires
the Company to perform an evaluation of whether goodwill is
impaired as of January 1, 2002, the effective date of the
statement for the Company. Additionally, SFAS 142 requires the
Company to reassess the useful lives and residual values of all
intangible assets and make any necessary amortization
adjustments. Any transitional impairment loss resulting from the
adoption of SFAS 142 will be recognized as a cumulative
effect of a change in accounting principle in the Companys
statement of operations.

In August 2001, the FASB issued Statement of
Financial Accounting Standards No. 143, Accounting
For Asset Retirement Obligations
(SFAS 143). This Statement 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. When the liability is
initially recorded, the entity capitalizes a cost by increasing
the carrying amount of the related long-lived asset. Over time,
the liability is accreted to its present value each period, and
the capitalized cost is depreciated over the useful life of the
related asset. Upon settlement of the liability, an entity
either settles the obligation for its recorded amount or incurs
a gain or loss upon settlement. The Company is required to adopt
the provisions of SFAS 143 at the beginning of its fiscal
year 2002.

In October 2001, the FASB issued Statement of
Financial Accounting Standards No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets
(SFAS 144). This statement addresses financial
accounting and reporting for the impairment or disposal of
long-lived assets. This statement supersedes FASB Statement
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of, and
the accounting and reporting provisions of APB Opinion
No. 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. This
Statement also amends ARB No. 51, Consolidated
Financial Statements, to eliminate the exception to
consolidation for a subsidiary for which control is likely to be
temporary. This Statement requires that one accounting model be
used for long-lived assets to be disposed of by sale, whether
previously held and used or newly acquired. This Statement also
broadens the presentation of discontinued operations to include
more disposal transactions.

10



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##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.


NOTES TO FINANCIAL STATEMENTS 
(Continued)

(unaudited)


The Company is in the process of evaluating the
effect that adopting these Statements will have on its financial
statements.

Note 12  Subsequent Event

On November 5, 2001, the Company acquired
Cole-Parmer Instrument Company and its affiliated companies
(Cole-Parmer). Cole-Parmer manufactures and
distributes specialty instruments, equipment and supplies to the
scientific research and industrial markets. The purchase price
of $205 million was paid from the proceeds of the
Companys public offering in May 2001 and the sale of
receivables under the Companys receivables securitization
facility. The results of Cole-Parmer will be included in the
domestic distribution segment.

11



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##### 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, 2000. 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.

In February 2001, the Company acquired the
pharmaceutical packaging services business of Covance Inc., and
renamed it Fisher Clinical Services Inc. (FCS). FCS
enables pharmaceutical and biotechnology companies and other
customers to outsource the packaging, labeling and distribution
of prescription drugs used in phase III and IV clinical trials.
The adjusted purchase price of $132.7 million was financed
through the sale of receivables under the Companys
receivables securitization facility.

In May 2001, the Company sold 12.8 million
shares of common stock, including the exercise of the
underwriters over-allotment option, in a public offering at a
price of $24.00 per share. Net proceeds to the Company, after
deducting the underwriting discount and expenses, were
approximately $289.9 million. The Company used a portion of the
net proceeds to reduce the amount of receivables sold under the
Companys receivables securitization facility by
$170.0 million and the remainder for acquisitions.

Results of Operations

The following table sets forth the Companys
sales and income from operations by segment for the three and
nine months ended September 30, 2001 and 2000 (in millions):

|       |                            |                    |   |                   |       |      |   |       |       |  |   |         |         |  |   |         |         | 
|------ | -------------------------- | ------------------ | - | ----------------- | ----- | ---- | - | ----- | ----- |  | - | ------- | ------- |  | - | ------- | ------- | 
|       |                            |                    |   |                  
|       |                            | Three Months Ended |   | Nine Months Ended
|       |                            | September 30,      |   | September 30,    
|       |                            |                    |   |                  
|       |                            | 2001               |   | 2000              |       | 2001 |   | 2000 
|       |                            |                    |   |                   |       |      |   |      
|Sales: |                            |                    |   |                   |       |      |   |       |       |  |   |         |         |  |   |        
|       | Domestic distribution      |                    | $ | 619.9             |       |      | $ | 560.7 |       |  | $ | 1,795.8 |         |  | $ | 1,653.0 |        
|       | International distribution |                    |   | 105.8             |       |      |   | 100.3 |       |  |   | 320.2   |         |  |   | 316.4   |        
|       | Laboratory workstations    |                    |   | 45.6              |       |      |   | 39.6  |       |  |   | 132.1   |         |  |   | 122.1   |        
|       | Eliminations               |                    |   | (41.8             | )     |      |   | (38.3 | )     |  |   | (122.8  | )       |  |   | (113.9  | )      
|       |                            |                    |   |                   |       |      |   |       |       |  |   |         |         |  |   |        
|       |                            | Total              |   | $                 | 729.5 |      |   | $     | 662.3 |  |   | $       | 2,125.3 |  |   | $       | 1,977.6 | 
|       |                            |                    |   |                   |       |      |   |       |       |  |   |         |         |  |   |        

|                        |                                 |                    |       |                   |      |      |   |      |      |      |   |        |       |      |   |       |       |       | 
|----------------------- | ------------------------------- | ------------------ | ----- | ----------------- | ---- | ---- | - | ---- | ---- | ---- | - | ------ | ----- | ---- | - | ----- | ----- | ----- | 
|                        |                                 |                    |       |                  
|                        |                                 | Three Months Ended |       | Nine Months Ended
|                        |                                 | September 30,      |       | September 30,    
|                        |                                 |                    |       |                  
|                        |                                 | 2001               |       | 2000              |      | 2001 |   | 2000
|                        |                                 |                    |       |                   |      |      |   |     
|Income from operations: |                                 |                    |       |                   |      |      |   |      |      |      |   |        |       |      |   |      
|                        | Domestic distribution           |                    | $     | 47.1              |      |      | $ | 42.4 |      |      | $ | 128.5  |       |      | $ | 116.7 |      
|                        | International distribution      |                    |       | 3.1               |      |      |   | 2.8  |      |      |   | 9.2    |       |      |   | 7.1   |      
|                        | Laboratory workstations         |                    |       | 1.8               |      |      |   | 0.8  |      |      |   | 3.3    |       |      |   | 2.9   |      
|                        | Eliminations                    |                    |       | 0.2               |      |      |   | (0.3 | )    |      |   | (0.2   | )     |      |   | (0.8  | )    
|                        |                                 |                    |       |                   |      |      |   |      |      |      |   |        |       |      |   |      
|                        |                                 | Segment sub-total  |       |                   | 52.2 |      |   |      | 45.7 |      |   |        | 140.8 |      |   |       | 125.9 |      
|                        | Restructuring and other charges |                    |       |                  |      |      |   | (3.5 | )    |      |   | (52.7) | (a)   |      |   | (3.5  | )    
|                        |                                 |                    |       |                   |      |      |   |      |      |      |   |        |       |      |   |      
|                        |                                 |                    | Total |                   | $    | 52.2 |   |      | $    | 42.2 |   |        | $     | 88.1 |   |       | $     | 122.4 | 
|                        |                                 |                    |       |                   |      |      |   |      |      |      |   |        |       |      |   |      



---



|    |                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 2001 restructuring charge taken in the

12



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##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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
	addition, the Company accelerated the vesting of common stock
	options and recorded a primarily non-cash compensation charge of
	$33.5  million in the first quarter.

Sales

Sales for the three and nine months ended
September 30, 2001 increased 10.1% and 7.5% to $729.5
million and $2,125.3 million, respectively, from $662.3 million
and $1,977.6 million for the comparable periods in 2000.
Excluding foreign exchange effects, sales increased to $732.0
million and $2,144.0 million for the three and nine months ended
September 30, 2001, respectively, a 10.5% and 8.4% increase
from the corresponding periods in 2000. For the three and nine
months ended September 30, 2001, sales in the domestic
distribution segment increased 10.6% and 8.6% to $619.9 million
and $1,795.8 million, respectively. The increase is attributable
to growth in the pharmaceutical and biotech markets and the
impact of acquisitions, primarily FCS which was acquired in
February 2001. The Company expects annual revenue growth for the
domestic distribution segment, including the results of
Cole-Parmer which was acquired on November 5, 2001, (see
Note 12  Subsequent Event) of 10% to 11% for
2001.

Excluding foreign exchange effects, international
distribution sales increased to $108.2 million and $336.8
million for the three and nine months ended September 30,
2001, respectively, a 7.9% and 6.4% increase from the
corresponding periods a year ago. The Company expects reported
annual revenue growth of approximately 4% for the international
distribution segment, excluding the impact of foreign exchange.

In the laboratory workstation segment, sales grew
to $45.6 million and $132.1 million or 15.2% and 8.2% for the
three and nine months ended September 30, 2001,
respectively. The growth is primarily attributable to increased
sales volume and improved order activity. The Company expects
annual sales growth for the laboratory workstation segment of
approximately 7.5% for 2001.

Gross
Profit

Fishers gross profit for the three and nine
months ended September 30, 2001, increased 13.9% and 10.2%
to $185.6 million and $539.7 million, respectively, from the
corresponding periods a year ago. Gross profit as a percent of
sales increased to 25.4% for the three and nine months ended
September 30, 2001, from 24.6% and 24.8%, respectively, for
the comparable periods in 2000. The increase in gross profit as
a percentage of sales was primarily due to acquisitions during
the year.

Selling,
General and Administrative Expense

Selling, general and administrative expense for
the three and nine months ended September 30, 2001,
increased 8.7% and 8.3% to $133.4 million and $400.0 million,
respectively, for the comparable periods in 2000. Excluding
nonrecurring costs, selling, general and administrative expense
as a percentage of sales was 18.3% and 18.8% for the three and
nine months ended September 30, 2001, respectively,
compared with 17.7% and 18.4% for the comparable periods a year
ago. The increase in selling, general and administrative expense
as a percentage of sales is primarily due to the effect of
acquisitions during the year.

Restructuring
and Other Charges

During the first quarter of 2001, the Company
adopted and commenced implementation of a streamlining plan (the
Plan) aimed at improving its operations, largely
through office, warehouse and manufacturing facility
consolidations and the discontinuance of certain product lines.
The Company recorded a restructuring charge of $18.1 million in
the first quarter of 2001. Upon adoption of the Plan, the
Company anticipated incurring approximately an additional
$7.0 million of nonrecurring expenses related to the Plan,
of which the Company has incurred $5.6 million for the nine
months ended September 30, 2001.

The restructuring charge consisted of $10.9
million in accruals for employee termination and other severance
costs associated with approximately 500 salaried and hourly
employees who were severed as part of

13



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##### Table of Contents



the Plan and $7.2 million of exit costs relating
primarily to lease cancellation costs and costs associated with
the discontinuation of certain product lines. As of
September 30, 2001, the Company has spent $8.2 million
of the $18.1 million accrued.


In addition, in March 2001, the Company
accelerated the vesting of approximately 2.3 million common
stock options having an average exercise price of $20.85 per
share. These options were then converted into the right to
receive approximately 1.0 million shares of common stock, which
were issued and deposited into a rabbi trust. The
number of shares issued was determined by dividing the
spread value of the option (the difference between
the last reported sale price on March 30, 2001 of $35.44
and the exercise price of the option) by $35.44. As a result of
these transactions, the Company recorded a primarily noncash
compensation charge of $33.5 million during the first quarter of
2001.

Income from
Operations

Income from operations for the three months ended
September 30, 2001, increased 23.7% to $52.2 million
from $42.2 million for the comparable period in 2000.
Income from operations for the nine months ended
September 30, 2001, decreased to $88.1 million from
$122.4 million for the comparable period in 2000. Excluding
restructuring and other charges of $52.7 million and $3.5
million for the nine months ended September 30, 2001 and
2000, respectively, income from operations increased 11.8% to
$140.8 million from $125.9 million for the comparable
period a year ago.

Income from operations for the domestic
distribution segment increased 11.1% and 10.1% to
$47.1 million and $128.5 million, respectively, for
the three and nine months ended September 30, 2001. The
Company expects income from operations as a percentage of sales
for our domestic distribution segment to be approximately 7.1%
for 2001. Income from operations for the international
distribution segment increased 10.7% and 29.6% to
$3.1 million and $9.2 million, respectively, for the
three and nine months ended September 30, 2001. The Company
expects the international distribution segment income from
operations as a percentage of sales to increase to approximately
3.2% for 2001. Income from operations for the laboratory
workstations segment increased to $1.8 million from
$0.8 million and to $3.3 million from
$2.9 million, respectively, for the three and nine months
ended September 30, 2001. The Company expects income from
operations as a percentage of sales for the laboratory
workstations segment to be approximately 2.7% for 2001.

Other
(Income) Expense, net

Other (income) expense, net totaled
$0.1 million of income and $1.6 million of expense for the
three and nine months ended September 30, 2001,
respectively, compared with $1.3 million and
$4.3 million of income for the comparable periods in 2000.
The increase in other expense for the nine month period was
primarily due to the Companys equity in the losses of
unconsolidated affiliates, HealthNexis, formerly The New Health
Exchange, and MAS, prior to acquiring a controlling interest.
The losses totaled $5.1 million for the nine months ended
September 30, 2001, compared with $0.4 million in the
prior year. The Company expects the equity losses in HealthNexis
to continue for the remainder of the year.

Income Tax
Provision

The Company recorded an income tax provision of
$11.3 million, a 40% effective tax rate for the three
months ended September 30, 2001, compared with an income
tax provision of $6.0 million, a 31% effective tax rate for
the comparable period a year ago. The amount of the income tax
provision for the three months ended September 30, 2001 was
impacted by the implementation of strategic tax planning
initiatives that resulted in the reduction of the year-to-date
tax rate from 45% to 40%. For the nine months ended
September 30, 2001, the Company recorded an income tax
provision of $6.2 million compared with a
$20.7 million income tax provision for the corresponding
period in 2000. The effective income tax rate for the nine
months ended September 30, 2001 was 53% compared with 40%
for the corresponding period in 2000. The higher effective tax
rate for the nine months ended September 30, 2001 resulted
from the restructuring and stock compensation charges taken in
the first quarter of 2001 having a U.S. tax benefit of only 37%.
For the fourth quarter of 2001, the Company anticipates that its
effective tax rate will be approximately 40%.

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Liquidity and Capital Resources

During the nine months ended September 30,
2001, the Companys operations provided $77.8 million
of cash compared with $51.8 million of cash for the same
period in 2000. This change in cash provided by operating
activities is primarily due to an increase in net income
adjusted for non-cash items.

During the nine months ended September 30,
2001, the Company used $196.8 million of cash for investing
activities compared with $46.4 million for the same period
in 2000. The increase in cash used for investing activities is
primarily due to an increase in acquisition spending. In the
first quarter of 2001, the Company acquired FCS for an adjusted
purchase price of $132.7 million. The Company also acquired
two other entities for an aggregate purchase price of
approximately $31.2 million. The acquisitions were funded
with cash on hand and through the sale of receivables under the
receivables securitization facility. On November 5, 2001,
the Company acquired Cole-Parmer for a purchase price of
$205 million, paid from the proceeds of the Companys
public offering in May 2001 and from proceeds for the sale of
receivables under the Companys receivables securitization
facility. The Company also invested $6.0 million as a debt
investment in MAS in the first quarter of 2001 and
$3.2 million for the Companys minority interest in
HealthNexis. Pursuant to the limited liability company agreement
for HealthNexis, of which the Company is a founding member, the
Company has committed to invest approximately $6.5 million
in the entity for an approximate 13% ownership interest. Through
September 30, 2001, the Company has funded
$5.4 million of its commitment and anticipates fulfilling
the remaining commitment by December 31, 2001. The Company
anticipates an increase in annual capital expenditures during
2001 to approximately $45 million due to its ongoing
warehouse consolidation program and expenditures related to
acquisitions.

During the nine months ended September 30,
2001, the Companys financing activities provided
$282.7 million of cash compared with using
$18.6 million of cash for the same period in 2000. On
May 9, 2001, the Company sold 12.8 million shares of
common stock, including 1.8 million shares for the exercise
of the underwriters over-allotment option, to the public
at a price of $24.00 per share. An additional 1.0 million
shares were sold by employees and other individuals from shares
distributed from a rabbi trust set up in connection with the
Companys recapitalization in 1998 to meet tax obligations
triggered by the offering. Proceeds to the Company from the
offering were approximately $289.9 million net of
underwriters discounts and offering costs. The Company did
not receive any proceeds for the sale of shares by the selling
stockholders. The Company used a portion of the net proceeds to
reduce the amount of receivables sold under the Companys
receivables securitization facility by $170.0 million and
the remainder for acquisitions.

The Company expects 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 its ongoing operating, capital expenditure
and debt service requirements for at least the next
12 months.

Recent Accounting Pronouncements

In July 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 eliminates the pooling-of-interests
method for business combinations. SFAS 141 also specifies
the types of acquired intangible assets that are required to be
recognized and reported separately from goodwill and those
acquired intangible assets that are required to be included in
goodwill. SFAS 141 shall be effective for all business
combinations completed by the Company after June 30, 2001.
Under the provisions of SFAS 141 goodwill and intangible assets
determined to have an indefinite useful life that is acquired in
a business combination completed after June 30, 2001, shall
not be amortized. Goodwill and intangible assets acquired in
business combinations completed prior to July 1, 2001,
shall continue to be amortized until December 31, 2001.

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SFAS 142 requires the use of a nonamortization
approach to account for purchased goodwill and certain
intangibles. Under the nonamortization approach, goodwill and
certain intangibles will not be amortized in results of
operations, but instead would be reviewed for impairment and
written down with a resulting charge to operations only in the
period in which the recorded value of goodwill and certain
intangibles is more than its fair value. SFAS 142 requires
the Company to perform an evaluation of whether goodwill is
impaired as of January 1, 2002, the effective date of the
statement for the Company. Additionally, SFAS 142 requires
the Company to reassess the useful lives and residual values of
all intangible assets and make any necessary amortization
adjustments. Any transitional impairment loss resulting from the
adoption of SFAS 142 will be recognized as a cumulative effect
of a change in accounting principle in the Companys
statement of operations.

In August 2001, the FASB issued Statement of
Financial Accounting Standards No. 143, Accounting
For Asset Retirement Obligations
(SFAS 143). This Statement 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. When the liability is
initially recorded, the entity capitalizes a cost by increasing
the carrying amount of the related long-lived asset. Over time,
the liability is accreted to its present value each period, and
the capitalized cost is depreciated over the useful life of the
related asset. Upon settlement of the liability, an entity
either settles the obligation for its recorded amount or incurs
a gain or loss upon settlement. The Company is required to adopt
the provisions of SFAS 143 at the beginning of its fiscal year
2002.

In October 2001, the FASB issued Statement of
Financial Accounting Standards No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets
(SFAS 144). This statement addresses financial
accounting and reporting for the impairment or disposal of
long-lived assets. This statement supersedes FASB Statement
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of, and
the accounting and reporting provisions of APB Opinion
No. 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. This
Statement also amends ARB No. 51, Consolidated
Financial Statements, to eliminate the exception to
consolidation for a subsidiary for which control is likely to be
temporary. This Statement requires that one accounting model be
used for long-lived assets to be disposed of by sale, whether
previously held and used or newly acquired. This Statement also
broadens the presentation of discontinued operations to include
more disposal transactions.

The Company is in the process of evaluating the
effect that adopting these Statements will have on its financial
statements.




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.

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PART II  OTHER
INFORMATION




Item 6  Exhibits and Reports
on Form 8-K

(b)     Reports on
Form 8-K:

The Company did not file any current reports on
Form 8-K during the last quarter covered by this report.

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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: November 14, 2001

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