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On the cover: An arrangement of tissue section slides, a test tube of serum, and some- _ strip chart recordings symbolize ttie--_ largest segment of the Company's business: contract services in toxicol= - ogy, chemistry and immunobiology._

a - .. c - --jk 6. di- Hazleton LaboratorieS_Corporation is a recognized-and re- spected leader in the lile -sciences business. We are the world's largest independent_ provi der of biolo ical and chemical resear-ch servicos.- `rr'e are also a lea ing sourcQ for related supplies such as laboratory- eqniprnent, large re- search an irnals, bi-ological an d medical products. Our clients -incinde the world's -premie, r research institutes and manu- facturers of pharmaceuticals, chemicals, food and cosmetics. -Today, Hazleton- operates over one milli on square -feet of valuable laboratory -and production space and employs over 1600 people in America and Europe. Hazleton common stock -is listed on the New York Stock Exchange. Introduction .......................... ........... ....... 3 Lettertc Shareholders ........ .. ...:................ 4 Narrative and IliusttatiQns ............................. 6 Statements of Income .................................. 16 Balance Sheets .................. .:..................... 17 Statements of Changes in Financial Position ............ 18 Statements of Changrs-ir. Sharehoider-' Equity .......... 19 Notes to Financial Statements ........................... 20 Accountants' Reuort .................... . ................ 25 Ten-year Suznmary. .................................... 26 Management's Discussion and Analysis ................. 28 Officers, 7irectors, and Subsidiaries .......... . . . . . ..... 30 1

TO OUR EIfAI1EHOlDERE: For the year ended )une-3U,1983 revenues-rose for the twelf#h consecutive year to $70.4 rnillio-n,- up_ 25% from the previous -year's results. Operating ~rofits decreased slightl; to $4.2 miliion and net interest income deciined-by $F1.5- rnillihn, Net__in= come, therefore, was down 21% ,o $2.6 million and earning.s-per share declined 24% to 700. We _ have adjusted ali-cor.iparisons in this section to reflect the pooling of interes t vrith Dutchland Lab- _ oratories, -Inc. and to ex- _ clude- the -extraordinary item of $6g4,000 recorded _ _ in -the fourth quarter of - 1982_ fetal boyine serum and a fhll_lir.e of cell culture media screened= using- myeloma cell lt` nes is now - available to scientists engaged in monoclonal anti- 5ody=resea_rch. Renamed-H_azleion Dutchlahd; it doubled the revenues- and resources of our Re- search Animal Group. Other highlights-of the year vvere- record reve- - nues and operating prnfits at Hazleton -Laboratories America, thdacquisition of the business and-aasets of the Wahmann Company in = 'i'i:ndnium; MaryIand.-the - ase of the land and The year started out well. AW "~ _ `". ~' pu-rch Our opening backlog was-==_ buildings- of our Madi- _-- $46 mil_lion-and-in thefirst _ scn, - Wi-sconsin, laborato= half we reported record = ries-and the listing of our _ ~ ~~ ~~ revenues, net in..ome and c~n:~on st,~k on tti ..e N _ ew earnings per share. How- York Stock Exchange. -ever; the recessian. -both in America and );urope. The inajor disappoint- - lasted - lor.ger than_ we or ments= were the start-up most other rnanagers-antic- oroblerns and --resulting ipated. Thus, new orders operating losses at-our new were jargel unchan ed - y g Donald P: Nieasen (Ieft) and Kirby E. Cromer (rrgM) ce(e'arats the Kirschner Medical subsidi= for the-year and the back- iisteng of Aaz/efofi on t-kefloor-oJtheNew York Stock Exchange. ary, and the reduced proF ~•r.Ld to-$40 m'r1= Yrifliam .!. Batten (center) is chairman o,f-t#ee Esccbange. ita,• - [©g dec,~ - biaty of Hazletnn Sys- lion. This- restulted in substantial under utiliza- terr.s. Inc. (HSI) and Hazleton Laboratories Europe -tion of-our new capacity. In addition, the in-- - (HLE). These factors, irt _conjunctiori with- t.he dustry's highly competitive pricing conditions sharp decline in interest-income,_caused the de- continued and-=start-up problems -at Kirschner cline in net income and earnings per share and - --Iviedical were heavier tharLexp-ected,_Thus, while broke our record of-eleven yFarsof consecutively revenues wer-e at new high levels, they were-less highersarnirigs. than plarvand-ourvperatingprofits were flat for the - second-year in a row. The result was-a very good Irn order to better focus the Company for th~_ #u- -- first half and a very-disappointing second half. = ture, severaa management changes have beer~-- irnplemented. First,_ Kirschner- Medical was -iri- corporated as a separate subsid'€ar-y with- Mr. - The highlight of the -year was the acq~risit-ion of - Bruce Hegstad as- President. Succeeding Mr. Heg- 000 shares of Inc for-195 Dutchland L.aboratories , , . Hazleton common- stock on November 3, 1982. --~ is also _ a Corporate Vice-_ President and brings Based-in Denver, Pennsylvania, Dutchla~.d-is a ~ twenty years of management experience in -the- -leading producer of rabbits and guinea pigs for the _ ~i life sciences industry ta HSI. Mr. Cyrus Lip,t an biomed'rcai- research market. The- company also ~ has been promoted -to Corporate Vice -Pre-Sident produces_ a growing line of biological products in- 14 from our Hazleton Laboratories America sub- cluding sera, antisera, liquid cell culture media, sidi3ry. htr. Lippmatr will-_spearhead a drive to _ blood -cells and reagents- used- in biological and - increase the Company's- tot3l - marketing and genetic research. Dutchland's new Hybri-SureT" = sales capabilities. 0 -stad as President of H-3l is Mr. jantes Larkin.-He -- 4

Seyeral-new products and services were irtf}fated Revenues milli0.is d ~lFaPa - t= aperating: - in or exga nded _iri the past_ yea,. While - resulta-were unsatisfactory, Kirsehner Medical's -revenues more 'than doubled wiih the irstroduc- _ tion of K-Cast''. Increased assay capacity resulteal in record irnmuuobiology revor3-ues: Initial success in providing clinical trials of hum-an drugs led us to plan for expansion in_this_area in-1-984: An 8u0%- expansion of our guinea pig and rabbit breeding - capacity was completed and _an-open-house for the scientific co*nma.rnity -was held_-on September- °i-. _ 1983. IHSI introduced several new Qr__improved -producls. In summary, it was a very-active year f-o_r new product and service developm eFit: - -As_-we cc~mnrerlce -ihe-riew - year, -we _beliel~~ our - scientific, technical and ma,,age~ent- personney', are the_finest in the industry. The sarne -i-s-true for = 16.. ~ our data processing sl:iils. _HSl's and I-iLE's back- - 121 logs are-a# their highest levels- iri the last twelve- - rronths.Financially, we have npverheprr stronger with a nec-worth of $53 :nillion-ann onlv niodleYt= _ lo;ig-term debt, Our ur expansion-prog€arns-over the past-three years resulted in the e~penditure ef ?+ 73 ovar $4i's ~nillion to fl6ubla our r apacii . L=ast ear . y y Earninga Per Share d t 7 f thi t b i A ~ w~e-ogera cu e ai a s new capac ty: s= 0 ~ the economy improves, and our clienis'-s-pending _ on research and development continues-to ri3e; we believe -Hazleton-will -erjoy°higher revenues and with it, substantially h:gl-i-er eernings. That is the_ gnal of our sixteen hunared-e.*;iployees, a_ma;ority- -of whom are also share;~olgers. KIRBY L. CRAMER DGNA-LI1 P. NIEL'3EN 6hairmarr President - in mdlions of dollars - - 53.0 _ 6,7- - - 5.._ ~ 394.0__+ ~_ 74 75 76 -77 78 79 8C 81 82 83 -- 7-4 -T5 70' 77 ,'8= 79 80 81 82 = 83-- 5 - Nst Income 70.4 in nalliorts of d¢llsrs - -3.28 4 75 76_ 77 78 79 80 87 - 82 83 - Shareholders'- Equity - -

HAZLETON AND THEAG1ROWlNG-WESCtENCES MARKET - In_aworldwhAre rncteasing-popnlation=and=e-xpund- They ar-e-recognized throughoutthE-avorld forthe ingtechnology combine to make us-alla part of-a ene= - quality of their-.aor's and their d-idication=to=service world society, dependunt-on scientific arm indust=r-ial== -for- cuT clierits. -development for our survival, identifying-and eontrol- ling healt~:=risks have never beanmore cruciat.- Vl%e believe Hazleton-is idEally-s-tr~rctured to succeed Governments-andthe private sector-v~, rldwade-are- in tuis burgeoningmarket.''he Company is divided respor.ding. As navee before, government regulation= into three groups. (1) contract=researyh services in - and-volu-ntary testing are affec-tir.g-tha developme ,t_ --tnxi-cology, chemist-ry-and immnnobiology; labora- - of pharmaceuticals= agri-chetriicais: food additives, tory and -medical products and (21) research anima-ls.- petroleum prodncts-t1r.e=many substances which - can,if carelessly employed,-harn:-ai; Lvell as help. - - 'd`hFs cancer-n-is generating growth in research and -_ development throughout the :ife sciences--industry - 4^JoTldwide researvh-expendit:iies-are-risir:o draraaii- cally. In the pharmaceutical inuustry, increased -- - ermphasis=on new drug-developmarlt to cure-ca ncer, _- geriatric and venereal disaase;wi 1in= _ heart°disease _ , crease derrrandfor our scientific products and services.- - In-the chemieal~ndustr~, ectrzpanies are *ricving from gar.erioto proprietary-compouards, to ir~c-rease-both --- - profifabi7ity and long-term growth.-T},_is rnea-rn more- - Fesea-rsh_a-ttdnevelopa;en#,=and thusn.=continuir:g_ =-- - need-for Hazleton's capabilities. Financially, Hazleton iswEli-positianed to meet the -_ growing-dernands - of clientsjn these industiies: Our revenues_have risen avcry year and our lorg-ter-rn-_ - =-profit growth is the best in-the life_sciences indu$t-ry. - _ --'~ur fr,ancial conditiofi-is strong, a-nd sperati-ng - capacity is _prime:l=torrheet pres+ent ar.dfuture detnand.- _ --Of coursa;-ou_r-inost impnrtan;-asset and The real key- -ta Hazleton's future is-the-more tiiani sixteen hundred members of the 1-_Iazleton_family. These superbly - qualified individunls collectively possess an expErtise- - unmatclredanywhere i-n thn life sciences indu;try: _ - - .4; j ---I. - 1 i ~N _. , \1.~~1~^c_- ~ ~f - - -l`7fe~~ I$ I 6-

V W Y

Hazleton f.abor-atories is the _largest independent- biological testingvrganizatinn fnAi:e world, with laboratories located in-Iviadisor, Wisconsin, ViEnna, Virginia-, Harrogate, England and-Murtstei, West -Oe_rmany. Here-pha:nnaceutical~ ehomicals; _food _ additives, -cosmetics, toiletries-and other consumer and-industriaf-products, are-tested ffle specified = physiological effects. Oufclients-are-among the world'§-leading carporations and-research iost:tutions: Toxicology aod-pathology experietlce-spanning -fou_r decades has created the unparalleled scieatific= -- resources ofNazleton today - the most-extensive=gf- __ any contract lal~oratory-grou-R i-n-the werld.=T-hey include a-ful]-bat+__ery of tests ranging fro;r.ecutit -- through ch_ronica_r,d including nral, dermal, and inha- lation routes of administration, metabolism anci- - pri-rnate-teratology-and the emergingdisciplines-uf-= _ irnmunatoxtcolugy. Quality control_of tests is-crucially important. Hazle- ton has developed soptiisticated data-handEing- --- systems to ensure error-frep-entr-y of the -myriad - tabulations-thatmust _be r2corded. Weigl:t,-food _ consun:ptiory, biood_sam, plir.g and urihalysis_data-a_rE= _ carefully and accurately charted for each t2st-subject. - A typical chr-onic-stu_dy may-have_Qver 70J.®Ct0 data_ euteies:-_ -TFe payoff from these frequently updated_systnms has -- been a degree of accuracy and productivity unsur- -passed in the industry. Hazleton-has-the only contract laboratory ecc: edited by the T oxicology Laborato__ry - Accreditation hoard.- This is costtyand-exhaustingly detailed svo;k: Daily, we examine over fifty thousandPndividuat research anima[s-from mice, rats and large_r-rodents ta dc~gs_ and mont;eys. At the cnci of a study, eurpatholagiats_ carefully exarnine-the vital organs of the fesearc- animals.Every week;-niore then twelve thousand tissues-ainde;go examination.-We_-also cor,duc_t-an extensive battery-of human clinical studies: -

- -_ - = lxrleinistry-lsihe secor}a -a1vtsion of our contract = - scieriescoanpaey icr1 h-e wQr!&._in the e~per-ience-and - staff and-!aboratory space-3han any tnde_per:dent life research-business. E:ere again, Hazleton has m_©re = - - gx~ia o~~ui staff, as-vveil as=the_ exten# dod-qua1ity_ at4u-r-facifities._Hazletcii-is anuodisp~uted-feadat in = the Eefd. -- and-its tises.=(3_verti-me; thay expand-e-'--beyonci nz;trt- = =_ {io.al=enal~~is Ec~_irrof~:de_~ther=are_ areas-of ca~ercia:l_-_=_-___ - - and regulatory concern. _ _ _OuTsophisticated_a-crd d_iverse-cheznica# capabi!ities = - - h~vff _gr-o;vn_:ovQr-a span ot aecades,=They began wPv!t a focus oo=t-ne -devetapnent and testihgO=Vi€a=€:iiz D __ ~`=~ent~fnousa~da~~yse= r~~~ a~~ e~!~2e~== ~ecn_'r_.~ts {eru~ c ke-y issues -s~~:~~e t~?-tt~eir deTart-- -m ent;the analysis of physiological-ffuids-tc defe-rrainef = -#h-e_ievet of new _pparmaceet:cea -corrapound& in the _ - i~urnan-tilood strearOtest-s to-d-efernr:n_e impurities=in - tiy i=n=puts=frocn=re:note iermina-ls,_~niroI_aIs aspecis oU-____ residues. -Oc}r capa6ilitfes irt=th:es~:a-teas are enhancacf=by _sdme_= unia-ue=ir.te-3riei-sdpport_s-y-s-terns_ Compuie-rs, d-riven_- -ri t_ritionat lahqii~-r-food-rnadufactui€ir4and = _ - - pac~agi,-~~;-and_minaife =aaure}nettt of=pesti£:de==- _ a -widewariety_of ptoducts_znd-trtat-cria!s-i---parTic-ularlS' =- -ourI-a6ora-t-oTy operations. induding sa_rr.-p!e t-rac~kiog-- - 4n c! scient-ific data acqerisftiQn.-Samp!=eTeceipt and= _ -_- - -unmatched-iF the Uni:eCStates, positioning u5 to-=_ seFve well the=gccwingneeds of-the pharm3cedticrl, -_ - chemical, food and personal products induslriess;- tn addition tn-tnese inie-rna-i support-systenis, _the - _ divisifln=_can-hoast of-state-of=thc-a-rt Insi4rurne=nt-atiom To-ou=ki'.owlodge, :Fazleton's cfier,-tiatry capabilily=is rea;tin~,tul-r~sponse to their requests; to cornmunic at e tb _ the eliyxrts, ~%~:odaorrry-thirx. }noth-eF~rou~has the ~fe-or,ssiorr =_-- "- wori; initiatioo occur uncfer=the diTectidnADfspersont~e~ _ - _-

= GnmunubioEc,gy-is the=newest of the=divisions withi=n the- contract research group. This division was estab- -= lished so that Nazletorr could provide-research ser-- - eices t5 t-he-grow-ing field of molecular hiotoW; w-hich-_ operates at the cutting edge of science. ~ r~ent=;n i~,inunobio:tgy, : t•xazleto!t-has_con;rni-tted- - - substantial resc.*u;ces to-selected areas.- s hese incl~ude- recombinant DNA products.=genetic-toxicology, -_ i-rnin-urotoxicr,lng;=-and mar.oclonal-adtibodies. - 4foooclonai antibodteaistke-newe-st and-cnos, ex•~t~ _ Far more than a decade, H-azl€ton tia--, provided= ing-area of reaearc-h. ih-r-his divis;or:; This field i:_rvolves :adioimmunnassay services to-research organizatiohs, - the use of manmade :.ells, hybrid cel3s-called hybri= teadhinoinsYtutiona, private cnedical centers ar~d dosnes, ~_prrduce~in:irtrited strppiies of r~iunoclonal - pharmaceutical-cc,rrpenies. 1rl~e perfot~ri mere tt-ian _ antibodies. Because they-are able to ge_ro-in ost specihe= 300,000 immunoassays a_year_f©r-ou-r-clients to help - adversaries=within the body, these antibodies are thear determine exact cflneentrations`of steroids, _- -proteins an_ d=other s-abstances, `1=-Ii-ese serv;ces-have-- sddressed a-wide range-of heattfr Eoncerns,-incliuding_ the early detection of cancer; hor3r.onal-iinbalanCes, _ human growth = abnormalities, hypertension-and inferti=:ity. __ In addition to pe€forrning clinical testing, the Hazteton staff actively d-evelops-new_ assays and _ techniques. Anticipating the probable iFnpact=-ot' recent develep- © :ikeiy to have an expanding impact-bn our undef=- standing-and trea;.ment-of disease.- - ~ Haz[eter._salreadV producing rndnoclonal_anti'o;:,dies - to help sci-entists-detect_hoFinonal i.mbala4ce£ w-ith-- i speed and accuracy._.Th-is technology is beiug-appli¢d-_ , in agriculture and industry to rurify bio[ogidai _ materials. This technology_-will-ultimately find ita-- biggest znarlcet-in the actual treatment of discases: such as cancer, ay-thritis, _ malaria and= venereal disease.