##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2006
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to            .
 Commission file number: 01-10920
 
 Fisher Scientific International Inc.
  Delaware
    
    02-0451017(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)Liberty Lane, HamptonNew Hampshire
    
    03842(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code:
(603) 926-5911
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
  o þ




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##### 



FISHER SCIENTIFIC INTERNATIONAL INC.
 FORM 10-Q
 FOR THE QUARTER ENDED MARCH 31, 2006
 INDEX
 Page No.Part I 
    
    FINANCIAL INFORMATION:Item 1 
    
    Financial Statements:Consolidated Statement of Operations Three Months Ended March 31, 2006 and 2005 (unaudited)
    
    
    2Consolidated Balance Sheet  March 31, 2006 and December 31, 2005 (unaudited)
    
    
    3Consolidated Statement of Cash Flows  Three Months Ended March 31, 2006 and 2005 (unaudited)
    
    
    4Consolidated Statement of Changes in Stockholders Equity  Three Months Ended March 31, 2006 (unaudited)
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2 
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    20Item 3 
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4 
    
    Controls and Procedures
    
    
    27Part II 
    
    OTHER INFORMATION:Item 4 
    
    Submission of Matters to Security Holders
    
    
    27Item 6 
    
    Exhibits
    
    
    27SIGNATURE
    
    
    28EX-10.01 ADI Holding Co Agreement and Plan of MergerEX-31.01 Section 302 Certification of CEOEX-31.02 Section 302 Certification of CFOEX-32.01 Section 906 Certification of CEOEX-32.02 Section 906 Certification of CFO
  1




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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 Item 1  Financial Statements
 FISHER SCIENTIFIC INTERNATIONAL INC.
 
 CONSOLIDATED STATEMENT OF OPERATIONS
 (In millions, except per share
data) (Unaudited)
 Three Months EndedMarch 31,2006
    
    
    2005Net sales
    
    $
    1,412.4
    
    
    $
    1,306.8Cost of sales
    
    
    898.6
    
    
    
    864.9Selling, general and administrative expenses
    
    
    341.1
    
    
    
    297.9Restructuring expense
    
    
    0.4
    
    
    
    8.3Operating income
    
    
    172.3
    
    
    
    135.7Interest expense
    
    
    29.1
    
    
    
    30.6Other income, net
    
    
    (2.7
    )
    
    
    (1.0
    )Income from continuing operations before income taxes
    
    
    145.9
    
    
    
    106.1Income tax provision
    
    
    39.7
    
    
    
    30.1Income from continuing operations
    
    
    106.2
    
    
    
    76.0Income (loss) from discontinued operations, net of tax (benefit) of ($1.7)
and $0.2, respectively
    
    
    (3.0
    )
    
    
    1.0Net income
    
    $
    103.2
    
    
    $
    77.0Earnings per share:Basic net income per common share:Income from continuing operations
    
    
    0.85
    
    
    $
    0.63Income (loss) from discontinued operations
    
    
    (0.02
    )
    
    
    0.01Net income
    
    $
    0.83
    
    
    $
    0.64Diluted net income per common share:Income from continuing operations
    
    $
    0.81
    
    
    $
    0.60Income (loss) from discontinued operations
    
    
    (0.02
    )
    
    
    0.01Net income
    
    $
    0.79
    
    
    $
    0.61Weighted average common shares outstanding:Basic
    
    
    123.8
    
    
    
    119.6Diluted
    
    
    130.6
    
    
    
    126.0
  2




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FISHER SCIENTIFIC INTERNATIONAL INC.
 
 CONSOLIDATED BALANCE SHEET
 (In millions, except share
data) (Unaudited)
 March 31,
    
    
    December 31,2006
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    433.9
    
    
    $
    407.2Accounts receivable, net
    
    
    726.9
    
    
    
    679.4Inventories
    
    
    618.9
    
    
    
    589.0Other current assets
    
    
    274.7
    
    
    
    276.2Current assets held for sale
    
    
    42.4
    
    
    
    39.5Total current assets
    
    
    2,096.8
    
    
    
    1,991.3Property, plant and equipment, net
    
    
    793.4
    
    
    
    788.2Goodwill
    
    
    3,797.8
    
    
    
    3,769.8Intangible assets, net
    
    
    1,566.6
    
    
    
    1,569.1Other assets
    
    
    271.5
    
    
    
    268.1Long-term assets held for sale
    
    
    57.7
    
    
    
    59.2Total assets
    
    $
    8,583.8
    
    
    $
    8,445.7LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term debt
    
    $
    41.5
    
    
    $
    74.5Accounts payable
    
    
    502.1
    
    
    
    479.9Accrued and other current liabilities
    
    
    415.5
    
    
    
    429.5Current liabilities held for sale
    
    
    26.9
    
    
    
    30.9Total current liabilities
    
    
    986.0
    
    
    
    1,014.8Long-term debt
    
    
    2,127.5
    
    
    
    2,135.4Other long-term liabilities
    
    
    986.4
    
    
    
    983.0Long-term liabilities held for sale
    
    
    8.8
    
    
    
    8.2Total liabilities
    
    
    4,108.7
    
    
    
    4,141.4Commitments and contingenciesStockholders equity:Preferred stock ($0.01 par value; 15,000,000 shares authorized; none outstanding)
    
    
    
    
    
    
    Common stock ($0.01 par value; 500,000,000 shares authorized;
124,252,740 and 123,656,538 shares issued; 123,997,765 and 123,401,563 shares
outstanding at March 31, 2006 and December 31, 2005, respectively)
    
    
    1.2
    
    
    
    1.2Capital in excess of par value
    
    
    4,233.8
    
    
    
    4,191.9Retained earnings
    
    
    232.2
    
    
    
    129.0Accumulated other comprehensive income (loss)
    
    
    11.9
    
    
    
    (13.8
    )Treasury stock, at cost (254,975 shares at March 31, 2006 and December 31, 2005)
    
    
    (4.0
    )
    
    
    (4.0
    )Total stockholders equity
    
    
    4,475.1
    
    
    
    4,304.3Total liabilities and stockholders equity.
    
    $
    8,583.8
    
    
    $
    8,445.7
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FISHER SCIENTIFIC INTERNATIONAL INC.
 
 CONSOLIDATED STATEMENT OF CASH FLOWS
 (In millions) (Unaudited)
 Three Months EndedMarch 31,2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    103.2
    
    
    $
    77.0Adjustments to reconcile net income to net cash provided by operating activities:Depreciation
    
    
    31.4
    
    
    
    31.4Amortization of intangible assets
    
    
    14.4
    
    
    
    12.7Amortization  other
    
    
    4.2
    
    
    
    3.7Stock-based compensation expense
    
    
    14.3
    
    
    
    Deferred income taxes
    
    
    23.6
    
    
    
    17.1Tax benefit
of stock options
    
    
    (10.2
    )
    
    
    Restructuring expense
    
    
    
    
    
    
    6.3Other noncash items
    
    
    2.1
    
    
    
    1.1Gain on sale of business and investments
    
    
    
    
    
    
    (0.5
    )Changes in working capitalAccounts receivable, net
    
    
    (45.0
    )
    
    
    (69.7
    )Inventories
    
    
    (22.1
    )
    
    
    17.5Other current assets
    
    
    5.3
    
    
    
    (10.2
    )Accounts payable
    
    
    20.0
    
    
    
    2.5Accrued and other current liabilities
    
    
    (24.7
    )
    
    
    (21.2
    )Other assets and liabilities
    
    
    (5.3
    )
    
    
    3.5Cash provided by operating activities
    
    
    111.2
    
    
    
    71.2Cash flows from investing activities:Acquisitions, net of cash acquired
    
    
    (27.4
    )
    
    
    (6.7
    )Capital expenditures
    
    
    (37.6
    )
    
    
    (28.0
    )Proceeds from sale of property, plant and equipment
    
    
    
    
    
    
    5.7Other
    
    
    (15.6
    )
    
    
    (1.0
    )Cash used in investing activities
    
    
    (80.6
    )
    
    
    (30.0
    )Cash flows from financing activities:Proceeds from stock options exercised
    
    
    20.6
    
    
    
    42.2Tax benefit of stock options
    
    
    10.2
    
    
    
    Debt payments
    
    
    (41.3
    )
    
    
    (5.0
    )Proceeds from revolving credit facility
    
    
    
    
    
    
    5.5Revolving credit facility payments
    
    
    
    
    
    
    (5.5
    )Deferred financing costs
    
    
    
    
    
    
    (0.4
    )Cash (used in) provided by financing activities
    
    
    (10.5
    )
    
    
    36.8Effect of exchange rate changes on cash and cash equivalents
    
    
    6.6
    
    
    
    (3.2
    )Net change in cash and cash equivalents
    
    
    26.7
    
    
    
    74.8Cash and cash equivalents  beginning of period
    
    
    407.2
    
    
    
    162.5Cash and cash equivalents  end of period
    
    $
    433.9
    
    
    $
    237.3
  4




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FISHER SCIENTIFIC INTERNATIONAL INC.
 
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
 (In millions, except share data)  (Unaudited)
 Shares to
    
    
    
    
    
    
    AccumulatedCapital in
    
    
    Shares
    
    
    be
    
    
    
    
    
    
    Other
    
    
    Treasury Stock,Common Stock
    
    
    Excess of
    
    
    Deposited
    
    
    Distributed
    
    
    Retained
    
    
    Comprehensive
    
    
    at CostShares
    
    
    Amount
    
    
    Par Value
    
    
    in Trust
    
    
    from Trust
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Shares
    
    
    Amount
    
    
    TotalBalance at January 1, 2006
    
    
    123,656,538
    
    
    $
    1.2
    
    
    $
    4,191.9
    
    
    $
    (16.9
    )
    
    $
    16.9
    
    
    $
    129.0
    
    
    $
    (13.8
    )
    
    
    254,975
    
    
    $
    (4.0
    )
    
    $
    4,304.3Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103.2Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22.4
    
    
    
    
    
    
    
    
    
    
    
    22.4Unrealized investment
gain, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.2
    
    
    
    
    
    
    
    
    
    
    
    3.2Unrealized gain on cash
flow hedges, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    0.1Proceeds from stock options
    
    
    596,202
    
    
    
    
    
    
    
    20.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.6Tax benefit
from stock options
    
    
    
    
    
    
    
    
    
    
    7.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.0Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    14.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14.3Trust activity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.3
    
    
    
    (0.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at March 31, 2006
    
    
    124,252,740
    
    
    $
    1.2
    
    
    $
    4,233.8
    
    
    $
    (16.6
    )
    
    $
    16.6
    
    
    $
    232.2
    
    
    $
    11.9
    
    
    
    254,975
    
    
    $
    (4.0
    )
    
    $
    4,475.1
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##### Table of Contents



FISHER SCIENTIFIC INTERNATIONAL INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 Note 1  Nature of Operations
  Scientific products and services segment
 Healthcare products and services segment
 Note 2  Basis of Presentation
     6




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##### Table of Contents



Note 3  Stock-Based Compensation
 Summary of stock-based compensation plans
      7




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##### Table of Contents



Change in accounting for stock-based compensation plans
   Three MonthsEndedMarch 31,2006Cost of sales
    
    $
    0.1Selling, general and administrative
    
    
    14.2Stock-based compensation expense before tax
    
    
    14.3Less: income tax benefit
    
    
    (5.1
    )Net stock-based compensation expense
    
    $
    9.2
  Impact ofAdoption ofSFAS 123RIncome from continuing operations before income taxes
    
    $
    14.3Income from continuing operations
    
    $
    9.2Net income
    
    $
    9.2Cash flows from operating activities
    
    $
    9.2Cash flows from financing activities
    
    $
    10.2Basic earnings per share
    
    $
    0.07Diluted earnings per share
    
    $
    0.07
  8




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##### Table of Contents



Three MonthsEndedMarch 31,2005Net income, as reported
    
    $
    77.0Add: stock-based employee compensation included in net income,
net of tax
    
    
    0.5Deduct: stock-based compensation expense determined using fair
value based method for all awards, net of tax
    
    
    (4.9
    )Net income, pro forma
    
    $
    $72.6Net income per common shareAs reported:Basic
    
    $
    $0.64Diluted
    
    $
    $0.61Pro forma:Basic
    
    $
    $0.61Diluted
    
    $
    $0.57
  Expected stock price volatility
    
    
    36
    %Risk free interest rate
    
    
    3.9
    %Expected life of options
    
    

    5.0
    yearsExpected annual dividends
    
    
    
   Stock Options
  9




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##### Table of Contents



WeightedStock
    
    
    Average(Options in thousands)
    
    Options
    
    
    Exercise PriceOutstanding at December 31, 2005
    
    
    11,469
    
    
    $
    43.01Granted
    
    
    
    
    
    
    Exercised
    
    
    (596
    )
    
    
    34.51Canceled/expired/forfeited
    
    
    (192
    )
    
    
    62.60Outstanding at March 31, 2006
    
    
    10,681
    
    
    $
    43.14Exercisable at March 31, 2006
    
    
    7,926
    
    
    $
    37.30
  Options Outstanding
    
    Options ExercisableWeighted Average
    
    Weighted
    
    
    
    
    
    WeightedNumber
    
    Remaining
    
    Average
    
    Number
    
    AverageOutstanding
    
    Contractual Life
    
    Exercise
    
    Exercisable
    
    ExerciseRange of Exercise Price
    

(in
000s)
    

(in
Years)
    
    Price
    

(in
000s)
    
    Price$9.00 - $13.00
    
    
    782
    
    
    
    1.8
    
    
    $
    9.50
    
    
    
    782
    
    
    $
    9.5013.01 - 17.00
    
    
    3
    
    
    
    2.5
    
    
    
    14.16
    
    
    
    3
    
    
    
    14.1617.01 - 21.00
    
    
    82
    
    
    
    2.9
    
    
    
    18.23
    
    
    
    82
    
    
    
    18.2321.01 - 25.00
    
    
    802
    
    
    
    4.9
    
    
    
    23.97
    
    
    
    802
    
    
    
    23.9725.01 - 29.00
    
    
    1,477
    
    
    
    5.9
    
    
    
    28.44
    
    
    
    1,472
    
    
    
    28.4529.01 - 33.00
    
    
    645
    
    
    
    5.3
    
    
    
    30.25
    
    
    
    626
    
    
    
    30.2133.01 - 37.00
    
    
    158
    
    
    
    3.3
    
    
    
    34.78
    
    
    
    152
    
    
    
    34.8237.01 - 41.00
    
    
    1,697
    
    
    
    3.1
    
    
    
    39.19
    
    
    
    1,588
    
    
    
    39.2041.01 - 45.00
    
    
    584
    
    
    
    5.0
    
    
    
    44.15
    
    
    
    512
    
    
    
    44.1445.01 - 49.00
    
    
    106
    
    
    
    5.8
    
    
    
    47.88
    
    
    
    103
    
    
    
    47.9349.01 - 54.00
    
    
    65
    
    
    
    7.9
    
    
    
    53.45
    
    
    
    43
    
    
    
    53.4754.01 - 59.00
    
    
    739
    
    
    
    8.4
    
    
    
    56.72
    
    
    
    190
    
    
    
    56.4359.01 - 64.00
    
    
    1,799
    
    
    
    8.9
    
    
    
    61.29
    
    
    
    891
    
    
    
    61.3764.01 - 69.00
    
    
    1,742
    
    
    
    9.2
    
    
    
    64.61
    
    
    
    680
    
    
    
    64.6010,681
    
    
    
    
    
    
    
    
    
    
    
    7,926
    10




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Restricted
    
    
    Weighted AverageStock
    
    
    Grant-DateNon-vested restricted stock units
    
    Units
    
    
    Fair ValueNon-vested at January 1, 2006
    
    
    3,000
    
    
    $
    64.48Granted
    
    
    987,530
    
    
    
    65.81Vested
    
    
    
    
    
    
    Forfeited
    
    
    (12,300
    )
    
    
    65.40Non-vested at March 31, 2006
    
    
    978,230
    
    
    $
    65.81
   Note 4  Discontinued Operations
   March 31,
    
    
    December 31,2006
    
    
    2005Accounts receivable, net
    
    $
    19.3
    
    
    $
    17.6Inventories
    
    
    18.1
    
    
    
    16.6Other current assets
    
    
    5.0
    
    
    
    5.3Total current assets
    
    
    42.4
    
    
    
    39.5Property, plant and equipment, net
    
    
    41.7
    
    
    
    43.1Other assets
    
    
    16.0
    
    
    
    16.1Total assets
    
    $
    100.1
    
    
    $
    98.7Accounts payable
    
    $
    16.8
    
    
    $
    21.2Accrued and other current liabilities
    
    
    10.1
    
    
    
    9.7Total current liabilities
    
    
    26.9
    
    
    
    30.9Other liabilities
    
    
    8.8
    
    
    
    8.2Total liabilities
    
    $
    35.7
    
    
    $
    39.1
  11




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##### Table of Contents



Three Months
    
    Three MonthsEnded March 31,
    
    Ended March 31,2006
    
    2005Net sales
    
    $
    37.4
    
    
    $
    44.4Income (loss) before income taxes
    
    
    (4.7
    )
    
    
    0.1(Provision) benefit for income taxes
    
    
    1.7
    
    
    
    Income (loss) from discontinued operations, net of tax
    
    
    (3.0
    )
    
    
    0.1
   Three MonthsEnded March 31,2005Net sales
    
    $
    10.4Income before income taxes
    
    
    1.1Provision for income taxes
    
    
    0.2Income from discontinued operations, net of tax
    
    
    0.9
 Note 5  Business Combinations
    Note 6  Inventories
  March 31,
    
    
    December 31,2006
    
    
    2005Raw materials
    
    $
    153.7
    
    
    $
    138.1Work in process
    
    
    73.8
    
    
    
    71.7Finished products
    
    
    391.4
    
    
    
    379.2Total
    
    $
    618.9
    
    
    $
    589.0
 12




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##### Table of Contents



Note 7
 Goodwill and Other Intangible Assets
   March 31,
    
    
    December 31,2006
    
    
    2005Scientific products and services
    
    $
    2,732.0
    
    
    $
    2,708.3Healthcare products and services
    
    
    1,065.8
    
    
    
    1,061.5$
    3,797.8
    
    
    $
    3,769.8
  WeightedAverage
    
    
    March 31, 2006
    
    
    December 31, 2005Amortization
    
    
    Net
    
    
    
    
    
    
    NetPeriod
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Accumulated(Years)
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationCustomer relationships
    
    
    18.9
    
    
    $
    294.6
    
    
    $
    46.9
    
    
    $
    296.4
    
    
    $
    41.0Non-compete agreements
    
    
    4.1
    
    
    
    1.6
    
    
    
    12.2
    
    
    
    1.7
    
    
    
    12.1Patents and tradenames
    
    
    15.0
    
    
    
    13.1
    
    
    
    6.7
    
    
    
    13.3
    
    
    
    6.3Developed technology
    
    
    9.0
    
    
    
    177.2
    
    
    
    46.4
    
    
    
    181.3
    
    
    
    39.8Supplier arrangements
    
    
    9.2
    
    
    
    16.0
    
    
    
    5.4
    
    
    
    16.5
    
    
    
    4.8Other amortizable intangible assets
    
    
    13.1
    
    
    
    25.6
    
    
    
    12.1
    
    
    
    24.7
    
    
    
    11.1Total other intangible assets subject to amortization
    
    
    14.5
    
    
    $
    528.1
    
    
    $
    129.7
    
    
    $
    533.9
    
    
    $
    115.1Indefinite-lived intangible assets
    
    
    
    
    
    
    1,038.5
    
    
    
    
    
    
    
    1,035.2Total other intangible assets
    
    
    
    
    
    $
    1,566.6
    
    
    
    
    
    
    $
    1,569.1
   For the year ended December 31,2006 (a)
    
    $
    42.92007
    
    $
    55.22008
    
    $
    53.72009
    
    $
    50.32010
    
    $
    46.4Thereafter
    
    $
    279.6
 
 (a)
    
    Amount represents estimated amortization expense for the remaining nine months ended
December 31, 2006.
 13




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##### Table of Contents



Note 8  Debt
  March 31,
    
    
    December 31,2006
    
    
    2005Term Facility
    
    $
    374.1
    
    
    $
    381.22.50% Convertible Senior Notes due 2023, convertible at $47.46 per share
    
    
    300.0
    
    
    
    300.0Floating Rate Convertible Senior Debentures due 2033, convertible at $59.09 per share
    
    
    344.6
    
    
    
    344.63.25% Convertible Senior Subordinated Notes due 2024, convertible at $80.40 per share
    
    
    330.0
    
    
    
    330.06 3/4% Senior Subordinated Notes due 2014
    
    
    300.0
    
    
    
    300.06 1/8% Senior Subordinated Notes due 2015 (includes $2.6 million and $2.6 million of
unamortized debt discount at March 31, 2006 and December 31, 2005, respectively)
    
    
    497.4
    
    
    
    497.4Other debt
    
    
    22.9
    
    
    
    56.7Total debt
    
    
    2,169.0
    
    
    
    2,209.9Less: short-term portion
    
    
    (41.5
    )
    
    
    (74.5
    )Total long-term debt
    
    $
    2,127.5
    
    
    $
    2,135.4
    Note 9  Equity
   14




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##### Table of Contents



Note 10  Employee Benefit Plans
   Three Months Ended March 31,OtherPostretirementPension Benefits
    
    
    SERP Benefits
    
    
    Benefits2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Components of net periodic benefit (income) costService cost
    
    $
    5.3
    
    
    $
    5.3
    
    
    $
    0.7
    
    
    $
    0.6
    
    
    $
    
    
    
    $
    0.1Interest cost
    
    
    8.0
    
    
    
    7.7
    
    
    
    0.8
    
    
    
    0.7
    
    
    
    0.3
    
    
    
    0.5Expected return on plan assets
    
    
    (9.8
    )
    
    
    (9.8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of unrecognized net (gain) loss
    
    
    0.9
    
    
    
    (0.1
    )
    
    
    0.1
    
    
    
    0.1
    
    
    
    (0.4
    )
    
    
    (0.4
    )Amortization of unrecognized prior service (benefit) cost
    
    
    
    
    
    
    (0.1
    )
    
    
    0.4
    
    
    
    0.4
    
    
    
    (0.4
    )
    
    
    (0.4
    )Recognized net actuarial loss
    
    
    0.6
    
    
    
    1.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Settlement/curtailment loss
    
    
    1.0
    
    
    
    0.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic benefit (income) cost
    
    $
    6.0
    
    
    $
    4.6
    
    
    $
    2.0
    
    
    $
    1.8
    
    
    $
    (0.5
    )
    
    $
    (0.2
    )
  Note 11  Earnings Per Share
  15




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##### Table of Contents



Three Months EndedMarch 31,2006
    
    
    2005Weighted average common shares outstanding used in
computing basic net income per common share
    
    
    123.8
    
    
    
    119.6Dilutive securities:Stock options, restricted stock units and warrants (a)
    
    
    4.2
    
    
    
    4.8Convertible notes
    
    
    2.6
    
    
    
    1.6Weighted average common shares outstanding used in
computing diluted net income per common share
    
    
    130.6
    
    
    
    126.0Basic net income per common share
    
    $
    0.83
    
    
    $
    0.64Diluted net income per common share
    
    $
    0.79
    
    
    $
    0.61
 
 (a)
    
    The weighted average amount of outstanding antidilutive common stock options and
warrants excluded from the computation of diluted net income per common share for the
three-month period ended March 31, 2006 was 2.1 million and for the three-month period
ended March 31, 2005 was 1.6 million.   2.50%
    
    Floating Rate
    
    3.25%Convertible Senior
    
    Convertible Senior
    
    Convertible SeniorNotes
    
    Debentures
    
    Subordinated NotesIssuance amount (in millions)
    
    $
    300.0
    
    
    $
    344.6
    
    
    $
    330.0Conversion price per share
    
    $
    47.46
    
    
    $
    59.09
    
    
    $
    80.40Trigger price
    
    $
    56.96
    
    
    $
    76.82
    
    
    $
    96.48
 16




---



##### Table of Contents



Total Potential SharesFuture
    
    2.50%
    
    Floating Rate
    
    3.25%
    
    PotentialFisher Common
    
    Convertible Senior
    
    Convertible Senior
    
    Convertible Senior
    
    ShareStock Price
    
    Notes
    
    Debentures
    
    Subordinated Notes
    
    Increase$47.46
    
    
    
    
    
    
    
    $48.46
    
    0.1
    
    
    
    
    
    0.1$59.09
    
    1.2
    
    
    
    
    
    1.2$60.09
    
    1.3
    
    0.1
    
    
    
    1.4$80.40
    
    2.6
    
    1.5
    
    
    
    4.1$81.40
    
    2.6
    
    1.6
    
    0.1
    
    4.3$90.00
    
    3.0
    
    2.0
    
    0.4
    
    5.4
 Note 12  Restructuring Plan Activities
   December 31,
    
    
    2006
    
    
    2006
    
    
    March 31,2005
    
    
    Charges
    
    
    Payments
    
    
    20062004 Plan
    
    $
    5.3
    
    
    $
    0.4
    
    
    $
    (3.0
    )
    
    $
    2.7Other plans
    
    
    0.7
    
    
    
    
    
    
    
    (0.2
    )
    
    
    0.5Total restructuring
    
    $
    6.0
    
    
    $
    0.4
    
    
    $
    (3.2
    )
    
    $
    3.2
  Note 13  Commitments and Contingencies
  17




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##### Table of Contents



Note 14  Segment Information
  18




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##### Table of Contents



Net Sales
    
    
    Operating IncomeThree Months Ended
    
    
    Three Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Scientific products and services
    
    $
    1,076.9
    
    
    $
    983.8
    
    
    $
    140.5
    
    
    $
    129.4Healthcare products and services
    
    
    353.5
    
    
    
    336.7
    
    
    
    47.6
    
    
    
    43.0Eliminations
    
    
    (18.0
    )
    
    
    (13.7
    )
    
    
    
    
    
    
    (0.2
    )Segment sub-total
    
    
    1,412.4
    
    
    
    1,306.8
    
    
    
    188.1
    
    
    
    172.2Restructuring expense
    
    
    
    
    
    
    
    
    
    
    (0.4
    )
    
    
    (8.3
    )Inventory step-up
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    (17.1
    )Equity-based compensation expense
    
    
    
    
    
    
    
    
    
    
    (14.3
    )
    
    
    Acquisition, integration and other costs
    
    
    
    
    
    
    
    
    
    
    (0.9
    )
    
    
    (11.1
    )Total
    
    $
    1,412.4
    
    
    $
    1,306.8
    
    
    $
    172.3
    
    
    $
    135.7
  Note 15  Income Tax
  Three Months Ended March 31,2006
    
    
    %
    
    
    2005
    
    
    %Taxes computed at statutory rate
    
    $
    51.1
    
    
    
    35.0
    %
    
    $
    37.1
    
    
    
    35.0
    %Foreign tax rate differential and foreign losses not tax benefited
    
    
    (12.6
    )
    
    
    (8.6
    )%
    
    
    (9.4
    )
    
    
    (8.8
    )%State income taxes, net of federal benefit
    
    
    2.7
    
    
    
    1.8
    %
    
    
    2.8
    
    
    
    2.6
    %Export sales benefit
    
    
    (0.7
    )
    
    
    (0.5
    )%
    
    
    (0.8
    )
    
    
    (0.8
    )%Nondeductible permanent items, net
    
    
    0.4
    
    
    
    0.3
    %
    
    
    0.7
    
    
    
    0.7
    %Foreign tax credits benefited
    
    
    (0.3
    )
    
    
    (0.2
    )%
    
    
    Other
    
    
    (0.9
    )
    
    
    (0.6
    )%
    
    
    (0.3
    )
    
    
    (0.3
    )%Income tax provision
    
    $
    39.7
    
    
    
    27.2
    %
    
    $
    30.1
    
    
    
    28.4
    %
 19




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##### Table of Contents



Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
  Results of Operations
  Executive Overview
    20




---



##### Table of Contents



Sales
  Three Months Ended March 31,2006
    
    
    2005Net
    
    
    Sales
    
    
    Net
    
    
    SalesSales
    
    
    Growth
    
    
    Sales
    
    
    GrowthScientific products and services
    
    $
    1,076.9
    
    
    
    9.5
    %
    
    $
    983.8
    
    
    
    32.6
    %Healthcare products and services
    
    
    353.5
    
    
    
    5.0
    %
    
    
    336.7
    
    
    
    48.0
    %Eliminations
    
    
    (18.0
    )
    
    
    
    
    
    
    (13.7
    )Total
    
    $
    1,412.4
    
    
    
    8.1
    %
    
    $
    1,306.8
    
    
    
    35.2
    %
 Consolidated
 Scientific Products and Services.
 Healthcare Products and Services.
 Operating Income
  21




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##### Table of Contents



Three Months Ended March 31,Operating
    
    
    Operating Income as aIncome
    
    
    Percentage of Net Sales2006
    
    
    2005
    
    
    2006
    
    
    2005Scientific products and services
    
    $
    140.5
    
    
    $
    129.4
    
    
    
    13.0
    %
    
    
    13.2
    %Healthcare products and services
    
    
    47.6
    
    
    
    43.0
    
    
    
    13.5
    %
    
    
    12.8
    %Eliminations
    
    
    
    
    
    
    (0.2
    )Sub-total
    
    
    188.1
    
    
    
    172.2
    
    
    
    13.3
    %
    
    
    13.2
    %Other charges:Restructuring expense
    
    
    (0.4
    )
    
    
    (8.3
    )
    
    
    
    
    
    
    Inventory step-up
    
    
    (0.2
    )
    
    
    (17.1
    )
    
    
    
    
    
    
    Equity-based compensation expense
    
    
    (14.3
    )
    
    
    
    
    
    

    
    
    
    
    Acquisition, integration and other costs
    
    
    (0.9
    )
    
    
    (11.1
    )
    
    
    
    
    
    
    
    
    
    
    Operating income
    
    $
    172.3
    
    
    $
    135.7
    
    
    
    12.2
    %
    
    
    10.4
    %
 Consolidated.
 Scientific Products and Services.
 Healthcare Products and Services.
 22




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##### Table of Contents



Change in accounting for stock-based compensation plans
 ,
  Restructuring Plan Activities
   December 31,
    
    
    2006
    
    
    2006
    
    
    March 31,2005
    
    
    Charges
    
    
    Payments
    
    
    20062004 Plan
    
    $
    5.3
    
    
    $
    0.4
    
    
    $
    (3.0
    )
    
    $
    2.7Other plans
    
    
    0.7
    
    
    
    
    
    
    
    (0.2
    )
    
    
    0.5Total restructuring
    
    $
    6.0
    
    
    $
    0.4
    
    
    $
    (3.2
    )
    
    $
    3.2
  Discontinued Operations
  23




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##### Table of Contents



Interest Expense
  Other Income, net
  Income Tax Provision
  Liquidity and Capital Resources
    24




---



##### Table of Contents



Critical Accounting Policies/Estimates
  
 Item 3  Quantitative and Qualitative Disclosures About Market Risk
  Financial Instruments
   25




---



##### Table of Contents



Interest Rate Risk and Management
   Currency Risk and Management
    Commodity Risk Management
  26




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##### Table of Contents



Item 4  Controls and Procedures
  
 PART II  OTHER INFORMATION
 
 Item 4  Submission of Matters to Security Holders
  
 Item 6  Exhibits
 Exhibit 10.01:
    
    ADI Holding Company Agreement and Plan of Merger.Exhibit 31.01:
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31.02:
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 32.01:
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.Exhibit 32.02:
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 27




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##### Table of Contents



SIGNATURE
  FISHER SCIENTIFIC INTERNATIONAL INC./s/ Kevin P. ClarkKevin P. ClarkVice President and Chief Financial Officer
(Principal Financial and Accounting Officer)