-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D2hmvYTySwzGBnLDXMzhUr5GAcneOG43cMs3JFZj6lEJPEuOpP2vV0ddgZWchaCa hFZXssMeiNaWtnaMll0j7Q== 0000010427-96-000010.txt : 19960318 0000010427-96-000010.hdr.sgml : 19960318 ACCESSION NUMBER: 0000010427-96-000010 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19930925 FILED AS OF DATE: 19960315 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAUSCH & LOMB INC CENTRAL INDEX KEY: 0000010427 STANDARD INDUSTRIAL CLASSIFICATION: OPHTHALMIC GOODS [3851] IRS NUMBER: 160345235 STATE OF INCORPORATION: NY FISCAL YEAR END: 1225 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04105 FILM NUMBER: 96535273 BUSINESS ADDRESS: STREET 1: ONE BAUSCH & LOMB PLACE STREET 2: P O BOX 54 CITY: ROCHESTER STATE: NY ZIP: 14604-2701 BUSINESS PHONE: (716) 338-6000 MAIL ADDRESS: STREET 1: ONE CHASE SQUARE STREET 2: P O BOX 54 CITY: ROCHESTER STATE: NY ZIP: 14601-0054 10-Q/A 1 10-Q/A FIRST QUARTER 1993 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q/A Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended September 25, 1993 Commission File Number: 1-4105 BAUSCH & LOMB INCORPORATED (Exact name of registrant as specified in its charter) New York (State or other jurisdiction of incorporation or organization) 16-0345235 (IRS Employer Identification No.) One Bausch & Lomb Place, Rochester NY 14604-2701 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 716) 338-6000 Indicate by checkmark 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 X . No . As of September 25, 1993 there were outstanding 59,067,678 shares of Common Stock, consisting of 58,576,833 shares of Common Stock and 490,845 shares of Class B Stock which are identical with respect to dividend and liquidation rights and vote together as a single class for all purposes. PART I - FINANCIAL INFORMATION Item 1. Financial Statements. As described more fully in Note A to the Financial Statements, 1993 financial information in this filing has been restated to correct the improper recording of certain sunglass distributor sales in Southeast Asia. Unaudited consolidated financial statements for the third quarter of 1993 and 1992 of Bausch & Lomb Incorporated and Consolidated Subsidiaries are presented on the following pages. The audited balance sheet at December 26, 1992 is presented for comparative purposes. Financial statements for the nine months ended September 25, 1993 have been prepared by the company in accordance with its usual accounting policies and are based in part on approximations. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial statements in accordance with generally accepted accounting principles have been included. All such adjustments were of a normal recurring nature. BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES STATEMENT OF EARNINGS Dollar Amounts In Thousands - Except Per Share Data
Third Quarter Ended Nine Months Ended ----------------------------------------------------- Sept. 25, Sept. 26, Sept. 25, Sept. 26, 1993* 1992 1993* 1992 ------------------------------------------------------ Net Sales $490,136 $461,310 $1,377,170 $1,280,678 Costs And Expenses: Cost of products sold 216,652 211,491 614,267 586,004 Selling, administrative and general 174,746 157,186 507,357 458,629 Research and development 14,495 13,934 43,178 38,737 Investment income (1,764) (1,915) (9,476) (9,709) Interest expense 7,446 6,200 24,960 22,586 Gain from foreign currency (2,051) (2,016) (10,043) (3,822) -------- -------- ---------- ---------- 409,524 384,880 1,170,243 1,092,425 -------- -------- ---------- ---------- Earnings Before Income Taxes And Minority Interest 80,612 76,430 206,927 188,253 Provision for income taxes 27,595 25,222 71,731 64,593 -------- -------- ---------- ---------- Earnings Before Minority Interest 53,017 51,208 135,196 123,660 Minority interest in subsidiaries 995 1,247 3,295 3,976 -------- -------- ---------- ---------- Net Earnings $ 52,022 $ 49,961 $ 131,901 $ 119,684 -------- -------- ---------- ---------- Retained Earnings At Beginning Of Period $838,758 $707,121 $ 785,044 $ 661,182 Cash Dividends Declared: Common stock, $0.22 and $0.66 per share for 1993 ($0.20 and $0.60 per share for 1992) 13,089 11,892 39,254 35,676 -------- -------- ---------- ---------- Retained Earnings At End Of Period $877,691 $745,190 $ 877,691 $745,190 -------- -------- ---------- ---------- -------- -------- ---------- ---------- Net earnings per Common Share $ 0.87 $ 0.83 $ 2.19 $ 1.98 -------- -------- ---------- ---------- -------- -------- ---------- ---------- Average Common Shares Outstanding (000s) 60,151 60,381 ---------- ---------- ---------- ---------- *Results have been restated as more fully described in Note A -- "Restatement of Financial Information." See Notes To Financial Statements
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES BALANCE SHEET Dollar Amounts In Thousands
September 25, December 26, 1993* 1992 Assets Current Assets: Cash and cash equivalents $ 128,336 $ 381,364 Short-term investments, at cost which approximates market 41,463 35,409 Trade receivables, less allowances of $15,445 and $11,834, respectively 354,321 277,338 Inventories 316,114 279,825 Deferred income taxes, less valuation allowance of $10,977 34,189 30,327 Other current assets 111,348 77,452 --------- ---------- 985,771 1,081,715 Property, Plant And Equipment, net 527,514 503,922 Goodwill And Other Intangibles, less accumulated amortization of $116,173 and $107,516, respectively 454,497 217,791 Other Assets 95,302 70,261 --------- ---------- Total Assets $2,063,084 $1,873,689 --------- ---------- --------- ---------- Liabilities and Shareholders' Equity Current Liabilities: Notes payable $ 208,256 $ 198,197 Current portion of long-term debt 21,779 10,657 Accounts payable 69,374 72,434 Accrued compensation 75,238 60,057 Accrued liabilities 235,242 188,353 Federal and foreign Income taxes 56,054 37,100 --------- ---------- 665,943 566,798 Long-Term Debt, less current portion 326,453 277,740 Other Long-Term Liabilities 115,303 110,852 Minority Interest 20,495 20,115 --------- ---------- Total Liabilities 1,128,194 975,505 --------- ---------- Shareholders' Equity: 4% Cumulative Preferred Stock, par value $100 per share - - Class A Preferred Stock, par value $1 per share - - Common Stock, par value $0.40 per share, 60,198,322 shares issued. 24,079 24,079 Class B Stock, par value $0.08 per share, 902,602 shares issued. (888,167 shares in 1992) 72 71 Capital in excess of par value 87,757 89,088 Cumulative translation adjustment 29,393 63,465 Retained earnings 877,691 785,044 --------- ---------- 1,018,992 961,747 Common and Class B Stock in treasury, at cost, 2,033,246 shares 1,642,622 shares in 1992) (84,102) (63,563) --------- ---------- Total Shareholders' Equity 934,890 898,184 --------- ---------- Total Liabilities And Shareholders' Equity $2,063,084 $1,873,689 --------- ---------- --------- ---------- *Results have been restated as more fully described in Note A -- "Restatement of Financial Information." See Notes To Financial Statements
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES STATEMENT OF CASH FLOWS Dollar Amounts In Thousands
Nine Months Ended September 25, September 26, 1993* 1992 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $131,901 $119,684 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation of property, plant, and equipment 53,666 49,032 Amortization of goodwill and other intangibles 8,657 6,598 Loss on retirement of fixed assets 2,155 1,233 Exchange (gain) loss (1,168) 7,819 (Increase) decrease in deferred income taxes (2,402) 3,680 Increase in accounts receivable (69,509) (66,972) (Increase) decrease in inventories (31,652) 5,622 Increase in other current assets (44,173) (16,652) Increase in accounts payable and accruals 24,290 12,608 Increase in tax reserves 18,977 12,158 Increase in undistributed earnings of subsidiaries 905 2,498 Increase in other long-term liabilities 2,501 2,985 ------- -------- Net cash provided by operating activities 94,148 140,293 CASH FLOWS FROM INVESTING ACTIVITIES: Payments for purchase of property, plant and equipment (67,749) (78,259) Acquisition of businesses, net of cash and short-term investments acquired (244,197) - Other (7,411) (22,011) ------- -------- Net cash used in investing activities (319,357) (100,270) CASH FLOWS FROM FINANCING ACTIVITIES: Repurchase of Common shares (25,426) (28,680) Exercise of stock options 3,385 9,692 Restricted stock awards 172 2,981 Net (repayment of) proceeds from issuance of debt 59,335 (226,850) Payment of dividends (38,046) (34,547) ------- -------- Net cash used in financing activities (580) (277,404) Effect of exchange rate changes on cash, cash equivalents and short-term investments (21,185) (9,473) ------- -------- Net decrease in cash, cash equivalents and short-term investments (246,974) (246,854) Cash, cash equivalents and short-term investments, beginning of period 416,773 411,744 ------- -------- Cash, cash equivalents and short-term investments, end of period $169,799 $164,890 ------- -------- ------- -------- Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 25,230 $ 18,867 Income taxes $ 37,766 $ 51,120 *Results have been restated as more fully described in Note A -- "Restatement of Financial Information." See Notes To Financial Statements
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS NOTE A: Restatement of Financial Information The Company has restated its financial statements for the third quarter and nine months ended September 25, 1993. This action was taken as a result of an ongoing investigation surrounding the improper recording of 1993 sunglass sales in Southeast Asia. The investigation disclosed that in certain instances distributor transactions recorded as revenues in 1993 had not actually resulted from a sale to those customers, and thus were improperly recorded. The 1993 financial statements have been restated to reverse the improperly recorded sales. In the opinion of management, all materials adjustments necessary to correct the financial statements have been recorded. The impact of these adjustments on the Company's financial results as originally reported is summarized below: Dollar Amounts In Thousands - Except Per Share Data
Third Quarter Ended Nine Months Ended ----------------------------------------------------- September 25, 1993 September 25, 1993 ---------------------------------------------------- As Reported As Restated As Reported As Restated ---------------------------------------------------- Net Sales: Healthcare $325,249 $325,249 $ $854,806 $ 854,806 Optics 173,562 164,887 531,039 522,364 ---------------------------------------------------- Total $498,811 $490,136 $1,385,845 $1,377,170 Business Segment Earnings $100,600 $ 96,132 $ 251,964 $ 247,496 ---------------------------------------------------- ---------------------------------------------------- Net Earnings $ 55,753 $ 52,022 $ 135,632 $ 131,901 ----------------------------------------------------- ----------------------------------------------------- Net Earnings Per Share $0.93 $0.87 $2.25 $2.19 ------------------------------------------------------ ------------------------------------------------------ Retained Earnings at end of Period $881,422 $877,691 $ 881,422 $ 877,691 ------------------------------------------------------ ------------------------------------------------------
NOTE B: Earnings Per Share Net earnings per common and common equivalent share are based on the weighted average number of Common and Class B Shares outstanding, adjusted for the assumed conversion of dilutive stock options outstanding during the period. It has been assumed that funds obtained from the exercise of stock options have been used to purchase Common Shares at current market prices, and the related net additional Common Shares have been included in the calculation of average common and common equivalent shares outstanding. The number of Common Shares used to calculate net earnings per common and common equivalent shares were 60,151,061 at September 25, 1993 and 60,381,153 at September 26, 1992. See Exhibit 11 filed as a part of this Report for details regarding the computation of earnings per share. NOTE C: Inventories Inventories at September 25, 1993 and at December 26, 1992 were as follows: (Dollar Amounts In Thousands)
September 25, December 26, 1993 1992 Raw materials and supplies $ 69,061 $ 60,851 Work in process 23,570 25,245 Finished products 231,970 202,066 -------- --------- 324,601 288,162 Less - Reserve for valuation of domestic inventories at last-in, first-out cost 8,487 8,337 -------- --------- $316,114 $279,825 -------- --------- -------- ---------
NOTE D: Property, Plant And Equipment Major classes of property, plant and equipment are summarized below: (Dollar Amounts In Thousands)
September 25, December 26, 1993 1992 Land $ 21,105 $ 22,368 Leasehold improvements 24,896 21,520 Buildings 354,762 336,166 Machinery and equipment 522,248 473,031 -------- --------- 923,011 853,085 Less - Accumulated depreciation 395,497 349,163 -------- --------- $527,514 $503,922 -------- --------- -------- ---------
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This financial review, which should be read in conjunction with the accompanying financial statements, contains management's discussion and analysis of the company's operational results for the third quarter and the first nine months of 1993 and its financial condition at September 25, 1993. The focus of this review is on the underlying business reasons for significant changes and trends affecting sales, operating earnings and financial condition. As more fully described in Note A - "Restatement of Financial Information", 1993 amounts have been restated to correct the improper recording of certain sunglass distributor sales in Southeast Asia. The discussion which follows is based on the restated financial information. Bausch & Lomb's results are reported in two business segments. The healthcare segment includes personal health, medical and biomedical products. In the personal health sector, major lines include solutions used for the care of contact lenses and for the relief of eye irritation, contact lens accessories, certain over-the- counter pharmaceutical products, skin care products, the Interplak and Interjet lines of plaque removal devices and other oral care products. Medical products include contact lenses and lens materials, prescription pharmaceuticals, hearing aids and dental implants. Biomedical products include purpose-bred laboratory animals for biomedical research and a variety of biotechnical and professional services provided to the scientific research community. Bausch & Lomb's optics segment includes sunglasses, binoculars, riflescopes, telescopes and optical thin film coating services and products. RESULTS OF OPERATIONS Net Sales Consolidated revenues for the third quarter ended September 25, 1993 were $490.1 million, an increase of $28.8 million or 6% over the 1992 third quarter. For the first nine months of 1993, net sales of $1,377.2 million advanced $96.5 million or 8% over the comparable 1992 period. The following is a summary of net sales by industry segment: Net Sales By Business Segment (Dollar Amounts In Thousands)
Third Quarter Nine Months 1993 1992 1993 1992 Healthcare $325,249 $271,322 $ 854,806 $ 755,810 Optics 164,887 189,988 522,364 524,868 -------- -------- ---------- ----------- Net Sales $490,136 $461,310 $1,377,170 $1,280,678 -------- -------- ---------- ----------- -------- -------- ---------- -----------
Healthcare Segment Revenues Revenues in the healthcare segment increased $53.9 million or 20% over the 1992 third quarter. For the nine-month period, healthcare segment revenues advanced $99.0 million or 13% over the comparable 1992 period. Major product sector revenues as a percentage of total healthcare segment sales follow: Healthcare Segment Net Sales By Product Sector
Third Quarter Nine Months 1993 1992 1993 1992 Personal Health 53% 53% 52% 51% Medical 34% 33% 33% 33% Biomedical 13% 14% 15% 16%
The improvement in revenues in the personal health sector reflected strong worldwide demand for the company's contact lens care products. Lens care revenues in the third quarter advanced 8% over 1992, with the majority of the growth attributable to the success of ReNu multi-purpose solution. Solid gains were also achieved in the Boston line of rigid gas permeable lens solutions. Worldwide oral care revenues advanced 33% over the prior year period. 1992 results were constrained by adverse market conditions and higher levels of product returns outside the U.S. Quality and customer service enhancements have been successfully implemented in 1993. Oral care product results also include shipments of the company's newly introduced Clear Choice alcohol-free mouthwash. Sales attributable to the acquisition of the Curel and Soft Sense skin care lines in the second quarter of 1993 also contributed to revenue growth in this sector. In the medical sector, revenues advanced 25% over the third quarter of 1992. Worldwide sales of contact lenses rose 16% over prior year levels. Combined revenues for the SeeQuence disposable and Medalist frequent replacement lens products increased more than 70%, largely due to higher unit volumes. The launch of the Occasions multifocal lens, the first product to be introduced as part of the new Occasions line of frequent replacement contact lenses, also contributed incremental sales in the period. Ophthalmic pharmaceutical revenues declined modestly, as gains for U.S. operations were offset by a decline in revenues for the company's Dr. Mann Pharma subsidiary in Germany, where changes in government regulations continue to adversely affect results. Medical sector revenues have also benefited from acquisitions including the first quarter acquisition of Steri-Oss, Inc., a U.S. manufacturer of dental implants. In the third quarter, Bausch & Lomb completed its acquisition of Dahlberg, Inc. and established the company's Miracle Ear Division. The division manufactures the Miracle Ear hearing aid and will market it to its franchisees together with Bausch & Lomb's Sound Choice product. Revenue growth in the biomedical sector from the third quarter of last year was led by increased worldwide sales of rodent models and incremental sales from the 1992 acquisition of SPAFAS, Inc. the world's largest producer of pathogen-free eggs used as media for vaccine production. The 20% increase in healthcare segment sales during the third quarter exceeded the year-to-date rate based on the increasing contribution of acquisitions and new product introductions. Optics Segment Revenues Sales of optics products for the third quarter totaled $164.9 million, a decrease of $25.1 million or 13% compared to the same period in 1992. Worldwide sunglass sales were 17% below the prior year level, as sluggish worldwide demand and unfavorable currency exchange rate movements in Europe depressed total sunglass revenues substantially for the period. A significant increase in sports optics revenues reflected the strength of demand for Bushnell branded products, particularly for binoculars and riflescopes. For the nine- month period, revenues in the optics segment declined $2.5 million from 1992 and totaled $522.4 million, as incremental revenues for moderately-priced sunglass lines partially offset the effect of sluggish worldwide demand for premium-priced products. Revenue Trends By Geographic Region Sales in markets outside the U.S. totaled $199.6 million, a decrease of $6.8 million or 3% from the 1992 third quarter. Changes in currency exchange rates reduced worldwide sales growth by $12.3 million or 3% and reduced non-U.S. sales by 6%. Non-U.S. sales represented 41% of consolidated revenues, compared to 45% in the 1992 third quarter. The success of ongoing efforts to develop new markets for existing products and the company's trend of strong performance outside the U.S. has been constrained by weakened market conditions in Europe and the Asia-Pacific region. European revenues in total declined by 10%, reflecting the adverse impact of currency exchange rate changes which reduced revenues by 16% and the effect of new governmental controls on drug pricing and prescribing on results for the company's Dr. Mann Pharma subsidiary in Germany. Sales in the Asia-Pacific region declined 4%. Improved demand for contact lens and lens care products outside Japan was offset by a softening in demand for sunglass products. In Japan, the improvement from 1992 was attributable to the favorable impact of currency exchange rate changes. Significant revenue growth in the Western Hemisphere reflected double-digit gains for contact lens care solutions and sunglasses. Revenues in Brazil and Mexico continued to show marked improvement over results in 1992. U.S. sales totaled $291.0 million in the third quarter, an increase of $36.0 million or 14%. The effect of 1993 acquisitions and the introduction of Clear Choice mouthwash led the improvement from the prior year. The company also experienced excellent gains in the contact lens, oral care and contact lens care businesses compared to the prior year period. U.S. pharmaceutical revenues advanced 12% in the third quarter, with higher shipments of the OptiPranolol line of medications used to treat glaucoma contributing to the gain. In the U.S. sunglass business, sales were 11% below the prior year reflecting weakened demand. Costs And Expenses The ratio of cost of products sold to sales was 44.2% for the 1993 third quarter versus 45.8% for the comparable 1992 period. For the nine-month period, this ratio was 44.6% for 1993 and 45.8% for 1992. This improvement was primarily attributable to the favorable effect of currency on the cost of products sourced from manufacturing facilities in Ireland, efficiencies in the U.S. pharmaceutical business coupled with oral care product quality improvements. As expected, margins in the contact lens business moderated slightly based on the increasing importance of frequent and planned replacement lens products. Selling, administrative and general costs, including corporate administration expenses, increased $17.6 million or 11% over the third quarter of 1992. For the first nine months of 1993, these costs rose $48.7 million or 11% to $507.4 million. These increases were attributable to higher sales volumes in 1993 and the discretionary marketing and advertising spending to launch the Clear Choice mouthwash line and to support recently acquired product lines. Research and development expense for the first nine months of 1993 increased $4.4 million or 11% over 1992 levels and reflected higher expenditures directed toward advancing the company's leadership position in the sunglass, contact lens and lens care businesses. Business Segment And Operating Earnings Business segment earnings of $96.1 million for the third quarter of 1993 increased $6.9 million or 8% compared to the 1992 third quarter. This gain reflected increased profitability in the contact lens, lens care and oral care businesses, incremental earnings contributed by recent acquisitions, and improved operating results for the U.S. pharmaceutical business. Results for the quarter were adversely affected by economic softness in key markets in Europe and Asia as well as the sales decline at Dr. Mann Pharma, stemming from changes in German prescription drug laws. Unfavorable currency exchange rate changes also reduced business segment earnings by $3.6 million or 4% in the third quarter. Business segment earnings for the first nine months of 1993 increased by $17.4 million to $247.5 million compared to $230.1 million in the prior year. Operating earnings for the third quarter totaled $84.2 million, an increase of $5.5 million or 7% over the prior year period. For the first nine months of 1993, operating earnings were $212.4 million an increase of $15.1 million or 8%. The rate of increase for corporate administration expenses continued to be successfully managed below Bausch & Lomb's target of 3% of sales. Other Income And Expenses Income from investments for the third quarter of 1993 totaled $1.8 million, compared to $1.9 million for the same period in 1992, as investment returns in the 1993 third quarter reflected lower interest rates. Interest expense of $7.4 million for the 1993 third quarter was $1.2 million higher than the third quarter of 1992, as the favorable effect of lower interest rates was offset by the acquisition-related increase in average outstanding debt. The company realized net foreign currency gains of $2.1 and $2.0 million in the third quarters of 1993 and 1992, respectively, largely attributable to its worldwide hedging operations. Net foreign currency gains of $10.0 million for the first nine months of 1993 advanced $6.2 million over the same period in 1992. The company expects that gains realized from its worldwide hedging operations in future periods will moderate as interest rate differentials narrow. For the first nine months of 1993, the provision for income taxes increased $7.1 million from 1992. The company's reported income tax rate was 34.7% in 1993 and 34.3% in 1992. The company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", as of the beginning of 1992. In accordance with the provisions of the Standard, the company recognized the impact of recently enacted U.S. tax rate changes on its deferred tax benefit. This was not material to its earnings results. Liquidity And Financial Resources Cash flows from operations totaled $94.1 million, a decrease of $46.1 million from the prior year amount. Higher net earnings were more than offset by an increase in net operating assets. The increase in receivables reflected the growth in sales and longer credit terms. Higher inventory levels were attributable to a seasonal build for certain product lines as well as inventories required for new product launches and acquired businesses. The changes in other current and other assets reflected higher prepaid account balances, primarily for the company's sponsorship of the 1994 and 1996 Olympic Games. Higher current liabilities, largely due to the timing of payments and payroll related accruals, contributed to the net positive cash flow from operations. Cash flows used in investing activities reflected payments for purchases of property, plant and equipment totaling $67.7 million in the first nine months of 1993 versus $78.3 million for the prior year period. Capital expenditures are expected to approximate $100.0 million for 1993 in total. Major projects include new manufacturing capacity for contact lenses in the U.S. and Europe, expanded lens care products manufacturing capacity in Europe and the Asia-Pacific region, and continuing investment in state-of-the-art management information systems. Other investing activities for the first nine months of 1993 included the acquisitions of Dahlberg, Inc., the Curel and Soft Sense skin care lines and Steri-Oss, Inc., a U.S.-based manufacturer of dental implants. Cash used in financing activities represented the net repayment of debt, repurchases of the company's Common Shares and the payment of dividends. During April 1993 the company redeemed at par its 8% notes due in 1996 which were replaced by short-term borrowings. Cash provided by financing activities reflected borrowings for the acquisitions of the skin care lines and Dahlberg, Inc. The company's total debt, consisting of short- and long-term borrowings, increased by $69.9 million to $556.5 million at the end of the 1993 third quarter. The increase was moderated by intercompany debt used primarily to reduce U.S. promissory note borrowings over a limited period during the year. Bausch & Lomb's ratio of total debt to equity stood at 59.5% in 1993 and 25.5% in 1992. It should be noted that the company also maintains a significant balance of cash and investments, which totaled $169.8 million and $164.9 million at the end of September 1993 and 1992, respectively. The company's net debt, or total borrowings less cash, cash equivalents and short-term investments, totaled $386.7 million in 1993 and $60.9 million in 1992. The ratio of net debt to equity stood at 41.4% in 1993 and 6.9% in 1992. The company maintains a revolving credit and term loan agreement which totals $100.0 million under a 364-day credit term with a six- month term loan provision thereafter. The agreement also provides for an additional $150.0 million credit line for any six-month period during the year. For 1993, this period has been extended to 207 days. No debt was outstanding under this agreement at September 25, 1993. The company also filed a shelf registration with the Securities and Exchange Commission (SEC) in November 1991 for up to $250.0 million in debt, the last $85.0 million of which was issued during the third quarter. The company is in the process of filing an additional $300.0 million shelf registration with the SEC, and expects it to be approved in 1993. In addition, the company maintains bank lines of credit for U.S. and non-U.S. financing requirements. As noted earlier, intercompany borrowings are also used to meet financing requirements for limited periods during the year. Liquidity and the availability of adequate credit provide the company with a high degree of flexibility to meet its obligations and invest in growth opportunities, including the third quarter acquisition of Dahlberg, Inc. for $134.8 million. The company continued to maintain its strong financial condition. Working capital amounted to $319.8 million for the third quarter of 1993, versus $514.9 million at year-end 1992 and $397.8 million for the third quarter of 1992. The current ratio at September 25, 1993 was 1.5 as compared to 1.9 at December 26, 1992 and 2.0 at September 26, 1992. OTHER FINANCIAL DATA Dividends declared on Common Stock were $0.22 per share in the third quarter of 1993 and $0.20 per share in the third quarter of 1992. Year-to-date dividends declared on Common Stock were $0.66 compared to $0.60 per share for the prior year period. This increase reflects the company's desire to increase its dividend on an annual basis while maintaining a payout rate of between 30% and 35% of the previous year's earnings. Return on average shareholders' equity was 20.6% for the twelve- month period ended September 25, 1993 compared to 12.2% for the twelve-month period ended September 26, 1992. The 1992 computation included the impact of the special charges recorded in December 1991. Excluding the cumulative translation adjustment, return on average shareholders' equity was 21.6% and 13.6% for the twelve-month periods ending September 25, 1993 and September 26, 1992, respectively. Had the impact of the special charges been excluded from the September 1992 computation, return on average shareholders' equity would have been 19.8%, while the return excluding special charges and the cumulative translation adjustment would have been 22.0%. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Item 601 Exhibits Those exhibits required to be filed by Item 601 of Regulation S-K are listed in the Exhibit Index immediately preceding the exhibits filed herewith and such listing is incorporated herein by reference. (b) Reports on Form 8-K No reports on Form 8-K were filed by the company during the quarter for which this Report is filed. SIGNATURES 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. BAUSCH & LOMB INCORPORATED Date: March 15, 1996 By: (Jay T. Holmes) Jay T. Holmes Executive Vice President, and Chief Administrative Officer Date: March 15, 1996 By: (Stephen C. McCluski) Stephen C. McCluski Senior Vice President, Finance EXHIBIT INDEX S-K Item 601 No. Document (4)-a Certificate of Incorporation of Bausch & Lomb Incorporated (filed as Exhibit (4)-a to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1985, File No. 1-4105, and incorporated herein by reference). (4)-b Certificate of Amendment of Bausch & Lomb Incorporated (filed as Exhibit (4)-b to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, File No. 1-4105, and incorporated herein by reference). (4)-c Certificate of Amendment of Bausch & Lomb Incorporated (filed as Exhibit (4)-c to the Company's Annual Report on Form 10-K for the fiscal year ended December 26, 1992, File No. 1-4105, and incorporated herein by reference). (4)-d Form of Indenture, dated as of September 1, 1991, between the Company and Citibank, N.A., as Trustee, with respect to the Company's Medium-Term Notes (filed as Exhibit (4)- a to the Company's Registration Statement on Form S-3, File No. 33-42858, and incorporated herein by reference). (4)-e Rights Agreement between the Company and The First National Bank of Boston, as successor to Chase Lincoln First Bank, N.A. (filed as Exhibit 1 to the Company's Current Report on Form 8-K dated July 25, 1988, File No. 1-4105, and incorporated herein by reference). (4)-f Amendment to the Rights Agreement between the Company and The First National Bank of Boston, as successor to Chase Lincoln First Bank, N.A. (filed as Exhibit 1 to the Company's Current Report on Form 8-K dated July 31, 1990, File No. 1-4105, and incorporated herein by reference). (11) Statement re Computation of Per Share Earnings (filed herewith). (12) Statement re Computation of Ratio of Earnings to Fixed Charges (filed herewith). (27) Financial Data Schedule (filed herewith) Exhibit 11 Statement re Computation of Per Share Earnings Dollars And Shares In Thousands- Except Per Share Data
NINE MONTHS ENDED September 25 September 26 1993* 1992 Net earnings $131,901 $119,684 -------- --------- -------- --------- Actual outstanding common shares at beginning of year 59,444 59,481 Average common shares issued for stock options and effects of assumed exercise of common stock equivalents and repurchase of common shares 707 900 -------- --------- Average common shares outstanding 60,151 60,381 -------- --------- -------- --------- Net earnings per common and common share equivalent $ 2.19 $ 1.98 -------- --------- -------- --------- *Results have been restated as more fully described in Note A - "Restatement of Financial Information"
Exhibit 12 Statement Regarding Computation of Ratio of Earnings to Fixed Charges Dollar Amounts In Thousands
September 25, December 26, 1993* 1992 Earnings before provision for income taxes and minority interest $206,927 $262,644 Fixed charges 26,091 31,618 Capitalized interest, net of current period amortization 195 (200) --------- --------- Total earnings as adjusted $233,213 $294,062 --------- --------- --------- --------- Fixed charges: Interest (including interest expense and capitalized interest) $ 24,960 $ 29,968 Portion of rents representative of the interest factor 1,131 1,650 --------- --------- Total fixed charges $ 26,091 $ 31,618 --------- --------- --------- --------- Ratio of earnings to fixed charges 8.94 9.30 --------- --------- --------- --------- *Results have been restated as more fully described in Note A - "Restatement of Financial Information"
[TYPE] EX-27 [ARTICLE] 5 [PERIOD-TYPE] 9-MOS QTR-3 [FISCAL-YEAR-END] DEC-25-1993 DEC-25-1993 [PERIOD-END] SEP-25-1993* SEP-25-1993* [CASH] 128,336 128,336 [SECURITIES] 41,463 41,463 [RECEIVABLES] 369,766 369,766 [ALLOWANCES] 15,445 15,445 [INVENTORY] 316,114 316,114 [CURRENT-ASSETS] 985,771 985,771 [PP&E] 923,011 923,011 [DEPRECIATION] 395,497 395,497 [TOTAL-ASSETS] 2,063,084 2,063,084 [CURRENT-LIABILITIES] 665,943 665,943 [BONDS] 326,453 326,543 [COMMON] 24,151 24,151 [PREFERRED-MANDATORY] 0 0 [PREFERRED] 0 0 [OTHER-SE] 910,739 910,739 [TOTAL-LIABILITY-AND-EQUITY] 2,063,084 2,063,084 [SALES] 1,377,170 490,136 [TOTAL-REVENUES] 1,377,170 490,136 [CGS] 614,267 216,652 [TOTAL-COSTS] 614,267 216,652 [OTHER-EXPENSES] 550,535 189,241 [LOSS-PROVISION] 3,349 1,639 [INTEREST-EXPENSE] 24,960 7,446 [INCOME-PRETAX] 206,927 80,612 [INCOME-TAX] 71,731 27,595 [INCOME-CONTINUING] 131,901 52,022 [DISCONTINUED] 0 0 [EXTRAORDINARY] 0 0 [CHANGES] 0 0 [NET-INCOME] 131,901 52,022 [EPS-PRIMARY] 2.19 0.87 [EPS-DILUTED] 2.19 0.87 *Results have been restated as more fully described in Note A - "Restatement of Financial Information." INCOME BEFORE TAXES AND MINORITY INTEREST
March 15, 1996 U.S. Securities and Exchange Commission Operations Center 6432 General Greenway Alexandria, VA 22312 Stop 0-7 RE: Bausch & Lomb Incorporated File No. 1-4105 CIK: 0000010427 Ladies and Gentlemen: Pursuant to the requirements of the Securities and Exchange Act of 1934, we are transmitting herewith the attached Form 10-Q/A for the third quarter ended September 25, 1993. Very truly yours, (Thomas H. McLain) Thomas H. McLain Staff Vice President, Corporate Accounting and Financial Reporting -----END PRIVACY-ENHANCED MESSAGE-----