-----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, SyVr0VnOkBFurYwCn6a8U2Px2eQQheXcWeLRKAszO063v7hZNYiE9w/VWxpROE4s jaNLAEgJekvqFitTa64hww== 0000897101-97-000072.txt : 19970225 0000897101-97-000072.hdr.sgml : 19970225 ACCESSION NUMBER: 0000897101-97-000072 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961204 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970204 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ST JUDE MEDICAL INC CENTRAL INDEX KEY: 0000203077 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 411276891 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12441 FILM NUMBER: 97517861 BUSINESS ADDRESS: STREET 1: ONE LILLEHEI PLAZA CITY: ST PAUL STATE: MN ZIP: 55117 BUSINESS PHONE: 6124832000 MAIL ADDRESS: STREET 1: ONE LILLEHEI PLAZA CITY: ST PAUL STATE: MN ZIP: 55117 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ST. JUDE MEDICAL, INC. (Exact name of registrant as specified in charter) Minnesota 0-8672 41-1276891 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) One Lillehei Plaza, St. Paul, Minnesota 55117 (Address of principal executive offices) (612) 483-2000 Registrant's telephone number including area code Registrant hereby amends the following items of its Form 8-K Report filed December 16, 1996 as set forth below. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial statements of business acquired. Financial statements required to be filed pursuant to Item 7 of Form 8-K for Telectronics Group. The financial statements for Telectronics Group present the assets, liabilities and parent investment and revenues and direct operating expenses and changes in parent investment of Telectronics Group and are not intended to be a complete presentation of Telectronics Group financial position and results of operations. (b) Pro forma financial information. Pro forma financial information required to be filed pursuant to Item 7 of Form 8-K reflecting the acquisition of Telectronics Group. (c) Exhibits 23 Consent of KPMG 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 hereunto duly authorized. St. Jude Medical, Inc. /s/ Stephen L. Wilson ---------------------------------------- Dated: February 4, 1997 By: Stephen L. Wilson Vice President - Finance and Chief Financial Officer TELECTRONICS GROUP COMBINED FINANCIAL STATEMENTS Table of Contents Page Independent Auditors' Report 4 Combined Statements of Assets, Liabilities and Parent Investment as of 5 June 30, 1996 and 1995 Combined Statements of Revenues and Direct 6 Operating Expenses for the years ended June 30, 1996 and 1995 Combined Statement of Changes in Parent 7 Investment for the years ended June 30, 1996 and 1995 Notes to Combined Financial Statements 8 Combined Statement of Assets, Liabilities and Parent Investment as of 16 September 30, 1996 (Unaudited) Combined Statements of Revenues and Direct 17 Operating Expenses for the three months ended September 30, 1996 and 1995 (Unaudited) Note to Combined Financial Statements 18 INDEPENDENT AUDITORS' REPORT THE BOARD OF DIRECTORS ACCUFIX RESEARCH INSTITUTE INC. (A SUBSIDIARY OF PACIFIC DUNLOP LIMITED) We have audited the accompanying combined statements of assets, liabilities and parent investment of the Telectronics Group of Pacific Dunlop Limited (the acquired business, as discussed in Note 1) at June 30, 1996 and 1995 and the related combined statements of revenues and direct operating expenses and changes in parent investment for the years then ended set out on pages 5-15, all expressed in United States dollars. These financial statements are the responsibility of the management of the Telectronics Group. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Australian generally accepted auditing standards which are consistent in all material respects with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. The accompanying combined statements of the acquired business were prepared pursuant to the agreement with St. Jude Medical, Inc. described in Note 1, and are not intended to be a complete presentation of the financial position or results of operations of the business as operated within the Pacific Dunlop Limited Group. The management of the Telectronics Group has not presented combined statements of cash flows for the years ended June 30, 1995 and 1996. Presentation of such statements summarizing the acquired business' operating, investing and financing activities, is required by generally accepted accounting principles in the United States. In our opinion, except that the omission of combined statements of cash flows results in an incomplete presentation as explained in the preceding paragraph, the combined financial statements referred to above present fairly, in all material respects, the assets, liabilities and parent investment of the Telectronics Group of Pacific Dunlop Limited as acquired by St. Jude Medical, Inc., as of June 30, 1996 and 1995, and the related revenues and direct operating expenses and changes in parent investment for the years then ended in conformity with United States generally accepted accounting principles. /s/KPMG Melbourne, Australia September 13, 1996, except for the matters discussed in Note 1, as to which the date is November 29, 1996
TELECTRONICS GROUP COMBINED STATEMENTS OF ASSETS, LIABILITIES AND PARENT INVESTMENT (NOTE 1) JUNE 30, 1996 AND 1995 (U.S. DOLLARS IN THOUSANDS) Note June 30, 1996 June 30, 1995 ------------------ ------------------ CURRENT ASSETS Accounts receivable 8 $25,708 $39,094 Inventories 3 39,162 40,874 Prepayments 1,933 1,627 ------------------ ------------------ TOTAL CURRENT ASSETS 66,803 81,595 NON-CURRENT ASSETS Accounts receivable 142 588 Property, plant and equipment 9 35,504 42,114 Intangible assets 234 - ------------------ ------------------ TOTAL NON-CURRENT ASSETS 35,880 42,702 ------------------ ------------------ TOTAL ASSETS $102,683 $124,297 ================== ================== CURRENT LIABILITIES Creditors and borrowings 10 $25,264 $32,191 Provisions 11 4,611 4,439 Other 29 794 ------------------ ------------------ TOTAL CURRENT LIABILITIES 29,904 37,424 NON-CURRENT LIABILITIES Creditors and borrowings 10 1,100 2,131 Provisions 11 307 361 Other 114 557 ------------------ ------------------ TOTAL NON-CURRENT LIABILITIES 1,521 3,049 ------------------ ------------------ TOTAL LIABILITIES 31,425 40,473 PARENT INVESTMENT 71,258 83,824 ------------------ ------------------ TOTAL LIABILITIES AND PARENT INVESTMENT $102,683 $124,297 ================== ================== This statement is to be read in conjunction with the notes to and forming part of the combined financial statements.
TELECTRONICS GROUP COMBINED STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES (NOTE 1) FOR THE YEARS ENDED JUNE 30, 1996 AND 1995 (U.S. DOLLARS IN THOUSANDS) 1996 1995 --------------- ---------------- Revenues $ 117,297 $213,739 Direct Operating Expenses: Cost of sales 73,243 79,945 Depreciation and amortization 9,195 11,182 Selling, general, and administrative 92,323 84,574 Research and development 49,988 47,029 Income tax in respect of acquired entities (Note 1) 915 752 --------------- ---------------- Total direct operating expenses 225,664 223,482 --------------- ---------------- Excess Of Direct Operating Expenses Over Revenues $(108,367) $(9,743) =============== ================ This statement is to be read in conjunction with the notes to and forming part of the combined financial statements.
TELECTRONICS GROUP COMBINED STATEMENTS OF CHANGES IN PARENT INVESTMENT (NOTE 1) FOR THE YEARS ENDED JUNE 30, 1996 AND 1995 (U.S. DOLLARS IN THOUSANDS) June 30, 1996 June 30, 1995 ------------------ ------------------ Parent investment at beginning of period $83,824 $101,023 Excess (deficit) of revenues over direct operating expenses (108,367) (9,743) Net result of other transactions with Parent and affiliates 95,801 (7,456) ------------------ ------------------ Parent investment at end of period $71,258 $83,824 ================== ================== This statement is to be read in conjunction with the notes to and forming part of the combined financial statements.
TELECTRONICS GROUP NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 1996 AND 1995 (U.S. DOLLARS IN THOUSANDS) NOTE 1. THE TELECTRONICS GROUP The Telectronics Group as presented in these combined financial statements represents the assets and liabilities and revenues and direct operating expenses of those entities or operations which have been acquired by St. Jude Medical, Inc. under agreements completed as at November 29, 1996 (the "acquired business"). The Telectronics Group has previously operated as a unit of the Pacific Dunlop Limited consolidated structure, in the form of separate legal entities in a number of countries, with manufacturing operations being located in the United States and Australia. Under the terms of the acquisition, the manufacturing operations in Australia were excluded from the sale because these operations had been discontinued by Pacific Dunlop prior to November 29, 1996. Corporate entities in Austria, Belgium, Brazil, Denmark, Hong Kong, Netherlands, Netherlands Antilles and New Zealand were acquired, together with operations and substantially all of the operations and assets and certain liabilities in Australia, Canada, France, Germany, the United States and the United Kingdom. To the extent that transactions occurred between the entities included in the purchase agreements, the principles of combination have been applied whereby intra group balances and gains and losses have been eliminated. Stockholders equity, in respect of those legal entities which are included in the acquisition, together with the balance of the remaining net assets of the acquired business at June 30, 1996 and 1995 is presented as parent investment. The entities which operated in 1996 and 1995 and whose stock (shares) are not encompassed by the acquisition, are generally named defendants in pending litigation. The obligations of these defendants have not been assumed by St. Jude Medical, Inc., and accordingly various accruals of legal and warranty costs, and provisions in respect of ongoing patient care and monitoring of product conditions - relevant to the outstanding litigation issues are excluded from the statements of assets, liabilities, and parent investment presented herein. Additionally, the expenses recorded in the 1996 and 1995 financial years which relate directly to the outstanding legal and product and patient monitoring issues, which are retained by continuing subsidiaries of the Pacific Dunlop Group, are not reflected in the direct operating expenses of the acquired business. Unrelated to the outstanding litigation referred to above which does not form part of the acquisition, the major manufacturing facility in the United States which was acquired by St. Jude Medical, Inc. was unable to manufacture product for sale in the United States due to entering into a consent decree with the Food and Drug Administration (FDA). This consent decree operated from June 1995 until June 20, 1996. Consequently, management considers that the revenues and direct operating expenses of the acquired business for the year ended June 30, 1996 are not indicative of the normal operations had the plant facility been able to manufacture product for sale in the United States. In addition to the exclusion of litigation related charges and accruals which do not constitute a part of the acquired business, the accompanying combined financial statements do not include intercompany interest expense or income taxes, except where related to a legal entity, in accordance with the agreements of sale referred to above. The combined financial statements present the financial position and revenues and direct operating expenses of the following entities which have been acquired by St. Jude Medical, Inc.: COMPANY PLACE OF INCORPORATION A. Telectronics Scandinavia Aps Denmark Telectronics Gesellschaft mbH Austria Telectronics B.V. Netherlands Telectronics S.A. Belgium Telectronics Medica Ltda Brazil Glory Telectronics Ltd Hong Kong Glory EME Ltd Hong Kong Glory EME China Ltd Peoples Republic of China Telectronics N.V. Netherlands Antilles Medical Telectronics Ltd New Zealand and substantially all the net assets and revenues and direct operating expenses which have been acquired by St. Jude Medical, Inc. from: COMPANY PLACE OF INCORPORATION B. Telectronics Ltd United Kingdom Telectronics Pty (Canada) Ltd Canada Societe de Management Financier France Telectronics S.A. France Telectronics GmbH Germany Telectronics Pacing Systems Inc USA TPLC Inc. USA Medical Telectronics Pty Ltd Australia The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and direct operating expenses during the reporting period. Actual results could differ from those estimates. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES i) REPORTING CURRENCY AND FOREIGN CURRENCY TRANSLATION The combined financial statements are presented in United States dollars, the reporting currency adopted by the acquired business. Foreign currency financial statements of non-United States entities included in the combination comprising the acquired business are translated into United States dollars at the year-end rate for assets and liabilities and the weighted average rate for the year for revenues and direct operating expenses. Translation adjustments resulting therefrom are included as a component of parent investment. ii) INVENTORIES Inventories are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out (FIFO) basis), and net realizable value (market). Standard costs include appropriate amounts of manufacturing overhead. iii) DEPRECIATION AND AMORTIZATION Property, plant and equipment are stated at cost. Depreciation and amortization are provided, principally on a straight line basis, over the following estimated useful lives. Years Buildings 10-40 Manufacturing plant 5-10 Technical facilities, furniture, fixtures and office equipment 3-10 iv) PENSIONS AND POST RETIREMENT BENEFITS Employees in varying jurisdictions are parties to certain defined contribution pension plans. Contributions made by the acquired business are charged to expense in accordance with the plan obligations, which are generally on a monthly or annual basis. Post retirement benefits are not offered to employees and no liability exists. Statutory employee entitlements which exist in certain jurisdictions in which the acquired business operates are accrued and charged to expense on a regular basis, and accrued entitlements are fully recorded at each balance date in respect of obligations attaching to past employment. v) INCOME TAXES The entities acquired, as set out in Note 1, are taxpayers in their respective jurisdictions. Income taxes attributable to those entities are reflected in these financial statements. The other acquired operations, as set out in Note 1, have predominantly been included in the income tax structures of other subsidiaries of the Pacific Dunlop Limited Group. Accordingly, no income taxes in respect of these operations have been reflected in the accompanying combined financial statements. vi) FUNDING The acquired business, with the exception of minor banking facilities for day to day operations, has principally obtained all of its funding requirements from subsidiaries of the Pacific Dunlop Limited Group. These funding requirements have been extensive, particularly during the 1996 fiscal year when manufacturing and selling activities in the United States were curtailed by the consent decree referred to in Note 1. All intercompany funding outstanding at June 30, 1996 and 1995 is reflected as a component of parent investment, and, as disclosed in Note 1, any intercompany interest paid or incurred in the years ended on those dates has been excluded from direct operating expenses. vii) INTANGIBLE ASSETS Patents are stated at cost and amortized over the useful life of the patents. viii) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at cost. Expenditures for repairs and maintenance are expensed as incurred. ix) RESEARCH AND DEVELOPMENT EXPENDITURES Research and development costs are expensed as incurred. NOTE 3. INVENTORIES As of June 30, 1996 and 1995, inventories consisted of:
1996 1995 ------------- ------------- Raw materials and stores $16,894 $14,785 Work in progress 2,007 4,438 Finished goods, at cost or net realizable value 18,620 14,203 Other 1,641 7,448 ------------- ------------- $39,162 $40,874 ============= =============
NOTE 4. COMMITMENTS AND CONTINGENCIES A. Legal Matters Telectronics Group is involved in various legal actions and claims against products both in the ordinary course of its business, and in respect of additional litigation issues associated with the implantation of certain pacemaker leads between 1987 and 1994. The defense of, and responsibility for, all matters emanating out of products completed prior to November 29, 1996, is retained by the sellers under the terms of the purchase agreements referred to in Note 1. Consequently, certain costs incurred and accruals made in respect of legal claims defense and patient monitoring are not included in these combined financial statements. B. Operating Leases The acquired business is a party to a number of operating leases, principally in foreign jurisdictions, in respect of office premises. Lease expense in the years ended June 30, 1996 and 1995 was approximately $2,040 and $1,700, respectively. Future minimum operating lease payments subsequent to June 30, 1996 are: 1997 -- $1,569, 1998 -- $1,308, 1999 - 2001 -- $1,213, and later than 2001 -- $206. C. Workers Compensation and Environmental Issues The acquired business does not operate in a field which is subject to any specific compensation or environmental matters. Workers compensation insurance expense is incurred in the jurisdictions in which the acquired business operates, as required by respective legislation. No significant expense has been incurred by the acquired business in respect of such matters. NOTE 5. PARENT INVESTMENT Parent investment at June 30, 1996 and 1995 is comprised of the relevant Pacific Dunlop Limited and affiliates equity, loan and trade account balances relative to the entities and other net assets forming part of the sale/purchase transaction referred to in Note 1. NOTE 6. GEOGRAPHIC DATA As set out in Note 1, the acquired business, subject to regulatory approvals, manufactures product only in the United States. Export sales are derived through sales offices maintained in the countries detailed in Note 1. The export sales derived in the years ended June 30, 1996 and 1995 were $102,304 and $133,789, respectively. The acquired business operates solely in the field of implantable medical devices. The acquired business had no individual customer which purchased greater than 10% of total revenues during the years ended June 30, 1996 and 1995. The acquired business sells product to a diverse range of hospitals, medical practitioners and institutions throughout the world. NOTE 7. RELATED PARTY TRANSACTION The Telectronics Group has operated as a unit of the Pacific Dunlop Limited Group. The acquired business' transactions with Pacific Dunlop Limited or its affiliates have been primarily related to the derivation of funding as discussed in Note 2. NOTE 8. ACCOUNTS RECEIVABLE
JUNE 30 ----------------------------------------- 1996 1995 ------------------- ------------------ Trade accounts $23,833 $37,089 less: Provision for doubtful trade accounts (1,496) (895) ------------------- ------------------ 22,337 36,194 Other amounts receivable 3,371 2,900 ------------------- ------------------ Total $25,708 $39,094 =================== ==================
NOTE 9. PROPERTY, PLANT AND EQUIPMENT
JUNE 30 ----------------------------------------- 1996 1995 ------------------- ------------------ Freehold land and buildings at cost $13,890 $17,460 Provision for depreciation of buildings (5,988) (5,027) ------------------- ------------------ 7,902 12,433 ------------------- ------------------ Plant and equipment at cost 83,852 78,393 Provision for depreciation (59,077) (52,742) ------------------- ------------------ 24,775 25,651 ------------------- ------------------ Leased plant and equipment at cost 4,306 5,853 Provision for amortization (1,479) (1,823) ------------------- ------------------ 2,827 4,030 ------------------- ------------------ Total property, plant and equipment $35,504 $42,114 =================== ==================
NOTE 10. CREDITORS AND BORROWINGS
JUNE 30 ----------------------------------------- 1996 1995 ------------------- ------------------ Trade creditors $18,030 $14,973 Lease liabilities 1,390 1,379 Bills payable 8 25 Other creditors 5,836 15,814 ------------------- ------------------ Total Current $25,264 $32,191 =================== ================== Trade creditors $ 114 $ 10 Lease liabilities 986 2,121 ------------------- ------------------ Total Non-Current $ 1,100 $ 2,131 =================== ==================
NOTE 11. PROVISIONS
JUNE 30 ----------------------------------------- 1996 1995 ------------------- ------------------ Taxation $ 369 $ 433 Employee benefits 3,565 3,748 Other 677 258 ------------------- ------------------ Total Current $4,611 $4,439 =================== ================== Employee benefits $ 148 $ 153 Other 159 208 ------------------- ------------------ Total Non-Current $ 307 $ 361 =================== ==================
TELECTRONICS GROUP COMBINED STATEMENTS OF ASSETS, LIABILITIES AND PARENT INVESTMENT SEPTEMBER 30, 1996 (U.S. DOLLARS IN THOUSANDS) (UNAUDITED)
September 30, 1996 ------------------------------------ CURRENT ASSETS Cash $ 1,089 Accounts receivable 28,107 Inventories 40,826 Prepayments 1,248 --------------- TOTAL CURRENT ASSETS 71,270 NON-CURRENT ASSETS Property, plant and equipment 34,674 Other 354 --------------- TOTAL NON-CURRENT ASSETS 35,028 --------------- TOTAL ASSETS $106,298 =============== CURRENT LIABILITIES Creditors and borrowings $ 20,908 Provisions 8,069 Other 988 --------------- TOTAL CURRENT LIABILITIES 29,965 NON-CURRENT LIABILITIES Creditors and borrowings 9 Provisions 400 Other 322 --------------- TOTAL NON-CURRENT LIABILITIES 731 --------------- TOTAL LIABILITIES 30,696 PARENT INVESTMENT 75,602 --------------- LIABILITIES AND PARENT INVESTMENT $106,298 =============== This statement is to be read in conjunction with the accompanying note to the combined financial statements.
TELECTRONICS GROUP COMBINED STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (U.S. DOLLARS IN THOUSANDS) (UNAUDITED)
1996 1995 --------------- ---------------- Revenues $23,928 $34,560 Direct Operating Expenses: Cost of sales 17,477 18,624 Selling, general, and administrative 22,289 23,178 Research and development 8,795 12,116 --------------- ---------------- Total direct operating expenses 48,561 53,918 --------------- ---------------- Excess Of Direct Operating Expenses Over Revenues $(24,633) $(19,358) =============== ================ This statement is to be read in conjunction with the accompanying note to the combined financial statements.
TELECTRONICS GROUP NOTE TO COMBINED FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 1. In the opinion of management, the accompanying unaudited combined financial statements of Telectronics Group contain all adjustments necessary to present fairly the assets, liabilities and parent investment as of September 30, 1996, and the revenues and direct operating expenses for the three months ended September 30, 1996 and 1995. Such adjustments are of a normal recurring nature. The results of revenues and direct operating expenses for the three months ended September 30, 1996 and 1995, are not necessarily indicative of the results to be expected for the full year. These combined financial statements should be read in conjunction with the audited combined financial statements for the years ended June 30, 1996 and 1995 included herein. ST. JUDE MEDICAL, INC. Pro Forma Condensed Consolidated Financial Statements The following unaudited pro forma condensed consolidated financial statements give effect to the acquisition by St. Jude Medical, Inc. (the "Company") of Telectronics Group using the purchase method of accounting, and are based on estimates and assumptions set forth below and in the notes to such statements, which include pro forma adjustments. These pro forma financial statements are based upon the historical financial statements of St. Jude Medical, Inc., adjusted to give effect to the acquisition of Telectronics Group which was consummated November 29, 1996. The St. Jude Medical, Inc. financial statements have been restated for all periods presented to reflect the merger with Daig Corporation which was consummated on May 31, 1996 and accounted for as a pooling-of-interests. The aggregate purchase price of Telectronics Group was $135 million, subject to adjustment based on the closing net asset value. The Company has agreed to make additional payments, to a maximum of $25 million on a net present value basis, based upon a percentage of certain sales through the year 2002. The pro forma condensed consolidated statements of income for the year ended December 31, 1995 and the nine months ended September 30, 1996, give effect to the acquisition as if it had occurred at the beginning of 1995. Such statements are based on historical statements of revenues and direct operating expenses of Telectronics Group for the fiscal years ended June 30, 1996 and 1995. Telectronics unaudited results for the calendar year ended December 31, 1995 and nine months ended September 30, 1996 have been used to conform with St. Jude Medical's fiscal year. The operating results of Telectronics Group are included in the Company's financial statements from the date of acquisition, November 29, 1996. The proforma condensed consolidated balance sheet at September 30, 1996 combines the respective St. Jude Medical, Inc. and Telectronics Group balance sheets at September 30, 1996. The pro forma adjustments are based upon estimates, available information and certain assumptions that management deemed appropriate. Final purchase accounting adjustments may differ from the pro forma adjustments presented herein. In connection with the acquisition, $32.2 million of purchased research and development was charged against earnings in the fourth quarter 1996 in accordance with generally accepted accounting principles. The unaudited pro forma consolidated financial information does not profess to represent the Company's results of operations had the above transaction, in fact, occurred on these dates, or to project the Company's combined results of operations for any date or period. The pro forma consolidated financial information should be read in conjunction with the Company's and Telectronics Group's historical financial statements and notes thereto. ST. JUDE MEDICAL, INC. Pro Forma Condensed Consolidated Balance Sheet September 30, 1996 (Dollars in thousands) (Unaudited)
September 30, 1996 --------------------------------------------------------------------------- St. Jude Telectronics Pro forma Pro Forma Medical Group (a) Adjustments Consolidated --------------- ----------------- ----------------- ---------------- ASSETS Cash and cash equivalents $ 22,442 $ 1,089 $ $ 23,531 Marketable securities 143,480 - (30,000)(e) 113,480 Accounts receivable, net 179,286 28,107 207,393 Inventories 160,232 40,826 (7,200)(f) 193,858 Prepaid expenses 35,210 1,248 36,458 Property, plant and equipment, net 200,555 34,674 (11,249)(f) 223,980 Other assets 318,060 354 68,767(g) 387,181 --------------- ----------------- ----------------- ---------------- Total assets $1,059,265 $106,298 $ 20,318 $1,185,881 =============== ================= ================= ================ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $191,977 $ 30,696 $ 23,120(i) $ 245,793 Long-term debt - 105,000(e) 105,000 --------------- ----------------- ----------------- ---------------- Total liabilities 191,977 30,696 128,120 350,793 Preferred stock Common stock 8,098 8,098 Additional paid-in capital 61,888 61,888 Retained earnings 791,372 75,602 (75,602) 759,172 (32,200)(h) Cumulative translation adjustment 4,758 4,758 Unrealized gain on available for-sale securities 1,612 1,612 Amount receivable for shares issued (440) (440) --------------- ----------------- ----------------- ---------------- TOTAL STOCKHOLDERS' EQUITY 867,288 75,602 (107,802) 835,088 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,059,265 $106,298 $ 20,318 $1,185,881 =============== ================= ================= ================ The accompanying notes are an integral part of the unaudited pro forma condensed combined balance sheet.
ST. JUDE MEDICAL, INC. Pro Forma Condensed Consolidated Statement of Income For the Year Ended December 31, 1995 (In thousands, except per share amounts) (Unaudited) St. Jude Telectronics Pro forma Pro forma Medical, Inc. Group (a) Adjustments Consolidated ---------------- --------------- ---------------- ----------------- Net sales $761,835 $160,085 $ $921,920 Cost of sales 234,830 74,804 309,634 ---------------- --------------- ---------------- ----------------- Gross profit 527,005 85,281 612,286 Selling, general and administrative 247,389 99,244 3,329 (b) 349,962 Research and development 72,305 48,236 120,541 ---------------- --------------- ---------------- ----------------- Operating profit (loss) 207,311 (62,199) (3,329) 141,783 Other income (expense) (5,790) (8,313) (c) (14,103) ---------------- --------------- ---------------- ----------------- Income (loss) before taxes 201,521 (62,199) (11,642) 127,680 Income tax provision (benefit) 62,673 (28,355) (d) 34,318 ---------------- --------------- ---------------- ----------------- Net income (loss) $138,848 $(62,199) $16,713 $93,362 ================ =============== ================ ================= Earnings per share $1.71 $1.15 ================ ================= Weighted average shares outstanding 80,988 80,988 ================ =================
ST. JUDE MEDICAL, INC. Pro Forma Condensed Consolidated Statement of Income For the Nine Months Ended September 30, 1996 (In thousands, except per share amounts) (Unaudited)
St. Jude Telectronics Pro forma Pro forma Medical, Inc. Group (a) Adjustments Consolidated ---------------- --------------- ---------------- ----------------- Net sales $596,091 $77,369 $ $673,460 Cost of sales 182,931 54,562 237,493 ---------------- --------------- ---------------- ----------------- Gross profit 413,160 22,807 435,967 Selling, general and administrative 195,740 74,095 2,497 (b) 272,332 Research and development 53,507 33,427 86,934 Purchased research and development 5,000 - - 5,000 ---------------- --------------- ---------------- ----------------- Operating profit (loss) 158,913 (84,715) (2,497) 71,701 Other income (expense) 12,367 (6,386) (c) 5,981 ---------------- --------------- ---------------- ----------------- Income (loss) before taxes 171,280 (84,715) (8,883) 77,682 Income tax provision (benefit) 59,948 (35,942) (d) 24,006 ---------------- --------------- ---------------- ----------------- Net income (loss) $111,332 $(84,715) $27,059 $53,676 ================ =============== ================ ================= Earnings per share $1.36 $.66 ================ ================= Weighted average shares outstanding 81,754 81,754 ================ =================
ST. JUDE MEDICAL, INC. Notes to Pro Forma Condensed Consolidated Financial Statements Year Ended December 31, 1995 and Nine Months Ended September 30, 1996 (Unaudited) Pro Forma Adjustments (a) The combined financial statements for Telectronics Group represent the net assets acquired and revenues and direct operating expenses of Telectronics Group, and are not intended to be a complete representation of Telectronics Group's financial position and results of operations. (b) Reflects the amortization of goodwill in connection with the Telectronics Group acquisition over a twenty year amortization period. (c) Reflects additional interest expense and reduction in interest income resulting from the $135 million purchase price for the Telectronics Group. (d) Reflects income tax benefits at the statutory rate based on the Telectronics Group loss before taxes. (e) Reflects the $135 million purchase price for Telectronics Group ($30 million cash and $105 million borrowed under the Company's credit facility). (f) Reflects the estimated net realizable value of Telectronics' fixed assets and inventories. (g) Reflects the excess of allocated purchase price, based on appraised values, over net assets acquired, as adjusted for purchased research and development charges and Telectronics restructuring and transaction charges which must be reflected as additional goodwill under generally accepted accounting principles. Final purchase accounting adjustments may differ from the pro forma adjustments presented herein. (h) Reflect purchased research and development charge in connection with the Telectronics acquisition recorded in the fourth quarter 1996. (i) Reflects estimated restructuring and transaction charges in connection with the Telectronics acquisition. EX-23 2 CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS ACCUFIX RESEARCH INSTITUTE INC. We consent to the incorporation by reference of our report dated September 13, 1996, except for Note 1, for which the date is November 29, 1996, with respect to the combined statements of assets, liabilities and parent investment of the Telectronics Group of Pacific Dunlop Limited as of June 30, 1996 and 1995 and the related statements of revenues and direct operating expenses and changes in parent investment for the years then ended included in this Report on Form 8-K/A dated as of February 4, 1997 in Registration Statement Nos. 33-9262; 33-29085; 33-41459; No. 33-48502 and 33-54435 of St. Jude Medical, Inc. filed on Form S-8. Our report contains explanatory paragraphs stating that the (i) combined financial statements presented are pursuant to an agreement with St. Jude Medical, Inc. and are not intended to be a complete presentation of an existing entity's financial position or results of operations, and (ii) management of the Telectronics Group has not presented combined statements of cash flows, which results in an incomplete presentation. /s/KPMG Melbourne Australia February 4, 1997 -----END PRIVACY-ENHANCED MESSAGE-----