-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Q5tRWk3KBv2tbSG9qH8WDLdMznz+gAKsd2V2e4apkSO+GqjcQb/nMzxtItA6RIKV c+qEcpA7FDFk/2/wbLYrxQ== 0000893220-94-000110.txt : 19940228 0000893220-94-000110.hdr.sgml : 19940228 ACCESSION NUMBER: 0000893220-94-000110 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940218 ITEM INFORMATION: 7 FILED AS OF DATE: 19940224 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEFLEX INC CENTRAL INDEX KEY: 0000096943 STANDARD INDUSTRIAL CLASSIFICATION: 3728 IRS NUMBER: 231147939 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 34 SEC FILE NUMBER: 001-05353 FILM NUMBER: 94512538 BUSINESS ADDRESS: STREET 1: 630 W GERMANTOWN PK STE 450 STREET 2: SUITE 450 CITY: PLYMOUTH MEETING STATE: PA ZIP: 19462 BUSINESS PHONE: 2158346301 MAIL ADDRESS: STREET 1: 630 WEST GERMANTOWN PIKE STREET 2: SUITE 450 CITY: PLYMOUTH MEETING STATE: PA ZIP: 19462 8-K/A 1 AMENDMENT NO. 1 TO FORM 8-K - TELEFLEX INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 10549 FORM 8-K AMENDMENT TO APPLICATION OR REPORT FILED PURSUANT TO SECTION 12, 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 TELEFLEX INCORPORATED (Exact name of registrant as specified in charter) AMENDMENT NO. 1 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8-K, dated January 5, 1994, as set forth in the pages attached hereto. Item 7. Financial Statements Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized. TELEFLEX INCORPORATED Dated: February 24, 1994 /s/ STEVEN K. CHANCE Steven K. Chance Vice President and General Counsel /s/ HAROLD L. ZUBER, JR. Harold L. Zuber, Jr. Vice President and Controller -1- 2 Item 7. Financial Statements The following financial statements relate to Teleflex Incorporated and Weck: Index
Page Description of the pro forma condensed financial information...... 3 Pro Forma financial statements.................................... 4-6 Notes to condensed financial information.......................... 7-8 Audited financial statements of Weck.............................. 9-20
-2- 3 PRO FORMA CONDENSED FINANCIAL INFORMATION (Unaudited) Teleflex Incorporated purchased certain assets and assumed certain liabilities of Edward Weck Incorporated, a wholly-owned subsidiary of Bristol-Myers Squibb Company. Hereafter, these assets and liabilities and the related revenues and expenses will collectively be referred to as the "Business". The pro forma condensed statements of operations are based on the historical statements of operations of Teleflex Incorporated and the Business for the nine months ended September 1993 and the twelve months ended December 1992 and reflect the pro forma effects of the acquisition by Teleflex Incorporated. The pro forma balance sheet is based on the historical balance sheet of Teleflex Incorporated and the Business as of September 26, 1993 and reflects the pro forma effects of the acquisition by Teleflex Incorporated. The pro forma balance sheet has been prepared as if the described transaction occurred on September 26, 1993. The pro forma statements of operations have been prepared as if the described transaction had occurred immediately prior to the beginning of the 12 months ended December 27, 1992 and the 9 months ended September 26, 1993. The pro forma condensed statements of operations and the pro forma balance sheet give effect to the acquisition of the business under the purchase method of accounting subject to the assumptions in the accompanying notes to the pro forma financial statements. The total purchase price will be allocated to the tangible and intangible assets and liabilities of the Business based upon their respective fair values. Such allocations will be made based upon valuations and other studies which have not been finalized. Accordingly, the allocations of the purchase price included in the pro forma financial statements are preliminary. The unaudited pro forma financial information is presented for comparative purposes only and is not necessarily indicative of what results of operations or financial position would have been had such events been consummated during the period or as of the date for which unaudited pro forma financial information is presented. -3- 4 TELEFLEX INCORPORATED PRO FORMA CONDENSED STATEMENT OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
YEAR ENDED DECEMBER 1992 --------------------- PRO FORMA TELEFLEX WECK ADJUSTMENTS COMBINED ---------- -------- ----------- -------- REVENUES $570,338 $62,821 $633,159 -------- -------- -------- COST OF SALES 381,993 27,754 1,665 A 411,412 OPERATING EXPENSES 124,213 22,472 1,167 B 147,852 INTEREST EXPENSE 15,482 4,078 C 19,560 -------- -------- -------- -------- 521,688 50,226 6,910 578,824 -------- -------- -------- -------- INCOME BEFORE TAXES 48,650 12,595 (6,910) 54,335 ESTIMATED TAXES ON INCOME 16,638 4,786 (2,626) D 18,798 -------- -------- -------- -------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE $ 32,012 $ 7,809 ($4,284) $ 35,537 ======== ======== ======== ======== EARNINGS PER SHARE BEFORE CUMULATIVE CHANGE IN ACCOUNTING PRINCIPLE $ 1.87 $ 2.07 ======== ======== AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 17,132 17,132
-4- 5 TELEFLEX INCORPORATED PRO FORMA CONDENSED STATEMENT OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
NINE MONTHS ENDED SEPTEMBER 1993 ------------------------ PRO FORMA TELEFLEX WECK ADJUSTMENTS COMBINED -------- ---- ----------- -------- REVENUES $489,374 $44,764 $534,138 -------- ------- -------- COST OF SALES 337,996 20,634 963 A 359,593 OPERATING EXPENSES 103,455 15,284 875 B 119,614 INTEREST EXPENSE 10,838 3,059 C 13,897 -------- ------- ------- -------- 452,289 35,918 4,897 493,104 -------- ------- ------- -------- INCOME BEFORE TAXES 37,085 8,846 (4,897) 41,034 ESTIMATED TAXES ON INCOME 13,355 3,361 (1,861) D 14,855 -------- ------- ------- -------- NET INCOME $ 23,730 $ 5,485 ($3,036) $ 26,179 ======== ======= ======= ======== EARNINGS PER SHARE $ 1.38 $ 1.52 AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 17,238 17,238
-5- 6 TELEFLEX INCORPORATED PRO FORMA CONDENSED BALANCE SHEET (UNAUDITED) (IN THOUSANDS)
SEPTEMBER 26, 1993 ------------------------- PRO FORMA TELEFLEX WECK ADJUSTMENTS COMBINED ----------- ---------- ----------- -------- ASSETS CURRENT ASSETS CASH AND CASH EQUIVALENTS $16,542 $1,500 C $18,042 ACCOUNTS RECEIVABLE, LESS ALLOWANCE FOR DOUBTFUL ACCOUNTS 126,588 126,588 INVENTORIES 144,843 13,903 1,400 A 160,146 PREPAID EXPENSES 8,121 284 8,405 -------- -------- -------- -------- 296,094 14,187 2,900 313,181 PROPERTY, PLANT AND EQUIPMENT, AT COST, LESS ACCUMULATED DEPRECIATION 224,522 15,903 15,832 A 256,257 INVESTMENTS IN AFFILIATES 7,621 7,621 INTANGIBLES AND OTHER ASSETS 36,317 19,425 B 55,742 ------ -------- -------- -------- $564,554 $30,090 $38,157 $632,801 ========= ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES CURRENT PORTION OF BORROWINGS AND DEMAND LOANS $60,848 $60,848 ACCOUNTS PAYABLE AND ACCRUED EXPENSES 67,775 2,247 70,022 ESTIMATED INCOME TAXES PAYABLE 2,358 2,358 --------- -------- -------- 130,981 2,247 133,228 LONG-TERM BORROWINGS 134,833 65,000 C 199,833 DEFERRED INCOME TAXES AND OTHER 36,577 1,000 D 37,577 --------- -------- -------- -------- 302,391 2,247 66,000 370,638 SHAREHOLDERS' EQUITY 262,163 27,843 (27,843) E 262,163 --------- -------- --------- -------- $564,554 $30,090 $38,157 $632,801 ======== ======== ======== ========
-6- 7 NOTES TO CONDENSED FINANCIAL INFORMATION (UNAUDITED) DESCRIPTION OF TRANSACTION Teleflex Incorporated (the "Company") purchased certain assets and assumed certain liabilities of Edward Weck Incorporated ("Weck"), a wholly-owned subsidiary of Bristol-Myers Squibb Company ("BMS"). The assets acquired and liabilities assumed (the "Business") were acquired for cash, obtained through a $50,000,000 private placement financing at an average interest rate of 6.6% and a $15,000,000 bank term loan at an average interest rate of 5.2%. The excess of the acquisition financing over the purchase price was used for general corporate purposes. The Business designs, manufactures, markets and distributes surgical products that are used by patients, medical practitioners and medical facilities. The Business's four major product lines are ligation clips and appliers, hand-held instruments, skin stapling devices and electrosurgical devices. METHOD OF ACCOUNTING The pro forma condensed financial statements of operations and the pro forma balance sheet give effect to the acquisition of the Business under the purchase method of accounting. NOTES TO PRO FORMA STATEMENT OF OPERATIONS A. Additional depreciation resulting from increased basis of property and equipment acquired. Excludes the expensing of the adjustment to inventories to their estimated fair value as such charge is considered non-recurring. B. Additional costs for post-retirement benefits and amortization of goodwill on a basis not to exceed 30 years. C. Interest charge related to the indebtedness incurred to finance the acquisition of the Business. D. Federal and state income tax related to the pro forma adjustments. -7- 8 NOTES TO PRO FORMA BALANCE SHEET A. Under purchase accounting, the assets of the acquired Business are adjusted to their estimated fair value. B. The excess of acquisition cost over the estimated fair value of net assets acquired (goodwill). C. The issuance of $50,000,000 in 6.6% (average interest rate) Senior Notes payable, a $15,000,000 5.2% bank term loan (average interest rate). The excess of the acquisition financing over the purchase price is included in cash and cash equivalents to be used for general corporate purposes. D. Additional liability for the Accumulated Post-Retirement Benefit Obligation of the Business assumed by the Company. E. Elimination of the Business's equity accounts upon purchase by Teleflex Incorporated. -8- 9 COMBINED STATEMENT OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED AND REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS JUNE 30, 1993 AND 1992 AND DECEMBER 30, 1992 AND 1991 -9- 10 INDEX TO COMBINED STATEMENTS OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED AND REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS Report of Independent Accountants on Combined Statements of Assets to be Acquired and Liabilities to be Assumed and Revenues and Expenses Before Corporate Expenses, Interest and Income Taxes June 30, 1993 and 1992 and 11 December 31, 1992 and 1991 Combined Statement of Assets to be Acquired and Liabilities to be Assumed June 30 ,1993 and December 31, 1992 12 Combined Statement of Revenues and Expenses Before Corporate Expenses, Interest and Income Taxes For the Six Months Ended June 30, 1993 and 1992 and the Years Ended December 31, 1992 and 1991 13 Notes to Combined Statements of Assets to be Acquired and Liabilities to be Assumed and Revenues and Expenses Before Corporate Expenses, Interest and Income Taxes 14 TO 20
-10- 11 PRICE WATERHOUSE REPORT OF INDEPENDENT ACCOUNTANTS December 17, 1993 To the Board of Directors and Shareholders of Bristol-Myers Squibb Company We have audited the accompanying combined statement of assets to be acquired and liabilities to be assumed and the related combined statement of revenues and expenses before corporate expenses, interest and income taxes of Edward Weck Incorporated and related international operations (the "Business") as of June 30, 1993 and December 31, 1992 and the results of its operations for the six- month periods ended June 30, 1993 and 1992 and the years ended December 31, 1992 and 1991. These financial statements are the responsibility of the Business' management; our responsibility is to express an opinion of these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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. In our opinion, the combined statement of assets to be acquired and liabilities to be assumed and the related combined statement of revenues and expenses before corporate expenses, interest and income taxes audited by us present fairly, in all material respects, the assets to be acquired and liabilities to be assumed of the Business as of June 30, 1993 and December 31, 1992 and the results of its operations for the six-month periods ended June 30, 1993 and 1992 and the years ended December 31, 1992 and 1991 in conformity with generally accepted accounting principles. PRICE WATERHOUSE -11- 12 Combined Statement of Assets to be Acquired and Liabilities to be Assumed of Edward Weck Incorporated and Related International Operations (In Thousands)
June 30, December 31, 1993 1992 Assets Current assets Miscellaneous receivables $ 22 $ 2 Inventories 13,344 14,319 Prepaid expenses 30 109 ------- -------- 13,396 14,430 ------- -------- Property, plant and equipment, net 15,483 15,591 Other assets 243 281 ------- -------- $29,122 $30,302 ------- -------- Liabilities Accounts payable $ 899 $ 1,668 Accrued expenses 2,102 2,404 ------- ------- $ 3,001 $ 4,072 ======= =======
See accompanying notes to financial statements. -12- 13 COMBINED STATEMENT OF REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS (IN THOUSANDS)
SIX MONTHS ENDED YEARS ENDED JUNE 30 DECEMBER 31, 1993 1992 1992 1991 Net Sales $ 29,867 $ 30,853 $ 62,821 $ 62,532 Cost of products sold 13,417 13,250 27,754 29,169 -------- -------- -------- -------- Gross margin 16,450 17,603 35,067 33,363 -------- -------- -------- -------- Operating Expenses Selling, marketing, and distribution 7,017 7,526 15,352 15,968 General and administrative 2,496 3,330 5,862 9,667 Research and development 867 1,192 1,604 4,245 Other expense (income) (8) (263) (346) 676 -------- -------- -------- ------- Total operating expenses 10,372 11,785 22,472 30,556 -------- -------- -------- ------- Net revenues and expenses before corporate expenses, interest, and income taxes $ 6,078 $ 5,818 $ 12,595 $ 2,807 ======== ======== ======== =======
See accompanying notes to financial statements. -13- 14 NOTES TO COMBINED STATEMENTS OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED AND REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS JUNE 30, 1993 AND 1992 AND DECEMBER 31, 1992 AND 1991 (IN THOUSANDS) 1. BASIS OF PRESENTATION AND BUSINESS Edward Weck Incorporated ("Weck") is a wholly owned subsidiary of Bristol-Myers Squibb Company ("BMS"). Weck's products are sold outside the United States through two other wholly owned subsidiaries of BMS - Zimmer International ("Zimmer") and Convatec, S.A. ("Convatec"). During fiscal 1993, BMS initiated discussions to sell certain assets and liabilities of Weck which are presented in the accompanying statements. Hereafter, these assets and liabilities and the related revenues and expenses of Weck and the Weck business within Zimmer and Convatec will collectively be referred to as the "Business." The business designs, manufactures, markets and distributes surgical products that are used by patients, medical practitioners and medical facilities. The Business' four major product lines include ligation clips and appliers, hand-held instruments, skin stapling devices and electrosurgical devices. Historically, the Business was not defined as a distinct reporting entity within BMS. As a result, separate historical financial statements of the Business were not prepared. The accompanying financial statements have been prepared from the historical accounting records of Weck and other BMS entities to present assets to be acquired and liabilities to be assumed by a potential buyer as of June 30, 1993 and December 31, 1992 and the revenues and expenses before corporate expenses, interest and income taxes of the Business for the six months ended June 30, 1993 and 1992 and the years ended December 31, 1992 and 1991. Since only certain assets and liabilities are to be sold or assumed, statements of financial position and cash flows of the Business are not applicable. -14- 15 NOTES TO COMBINED STATEMENTS OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED AND REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS JUNE 30, 1993 AND 1992 AND DECEMBER 31, 1992 AND 1991 (IN THOUSANDS) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies followed by the Business in preparing these financial statements are as follows: INVENTORIES Inventories are presented at the lower of average cost or market value. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at historical cost. Expenditures for additions, renewals and betterments are capitalized at cost. Depreciation and amortization are computed using the straight-line method based on the estimated useful lives of the related assets as follows:
YEARS Land improvements 25-40 Building and building improvements 50 Machinery and equipment 5-16 Furniture, fixtures and computer equipment 3-10
Leasehold improvements are amortized over the shorter of the estimated useful life as set forth above or the term of the lease. REVENUE RECOGNITION Sales and related costs of products sold are recorded upon shipment. RELATED PARTY TRANSACTIONS AND BALANCES The Business is charged for various services provided by BMS or its subsidiaries. The more significant of these services include employee benefits, insurance, customer service, credit and collection, information systems support, and other general and administrative support. All liabilities resulting from intercompany allocations have been excluded from the accompanying financial statements. In addition, the Business receives other services, primarily legal, tax, and treasury from BMS without allocated cost. -15- 16 NOTES TO COMBINED STATEMENTS OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED AND REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS JUNE 30, 1993 AND 1992 AND DECEMBER 31, 1992 AND 1991 (IN THOUSANDS) Through February 1993, the Business provided various support services for product lines sold by other BMS subsidiaries and, accordingly, certain fixed overhead costs were absorbed by these product lines. A portion of The total fixed manufacturing overhead has been allocated to these other BMS product lines, and the impact of such treatment is not included in the accompanying statements. FOREIGN CURRENCY TRANSACTIONS Assets of foreign operations are translated at the current exchange rate at the balance sheet dates and revenues and expenses are translated at the average rates of exchange prevailing during the periods. Gains and losses resulting from transactions denominated in a currency other than the operations' functional currencies are included in net revenues and expenses before corporate expenses, interest and income taxes. 3. INVENTORIES Inventories as of June 30, 1993 and December 31, 1992 consist of the following:
JUNE 30, DECEMBER 31, 1993 1992 Raw material $ 4,383 $ 4,922 Work in process 1,465 1,133 Finished goods 11,399 11,791 -------- -------- Reserve for obsolescence (3,902) (3,527) --------- --------- $13,344 $14,319 -------- --------
-16- 17 NOTES TO COMBINED STATEMENTS OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED AND REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS JUNE 30, 1993 AND 1992 AND DECEMBER 31, 1992 AND 1991 (IN THOUSANDS) 4. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of June 30, 1993 and December 31, 1992 consist of the following:
JUNE 30, DECEMBER 31, 1993 1992 Land and land improvements $ 772 $ 772 Building and building improvements 6,511 5,925 Machinery and equipment 12,982 12,179 Furniture, fixtures and computer equipment 3,906 3,767 Leasehold improvements 2,413 2,411 Construction in progress 720 1,373 ------- ------- 27,304 26,427 Less - Accumulated depreciation 11,821 10,836 ------- ------- $15,483 $15,591 ======= =======
Depreciation expense was $1,060 and $836 for the six months ended June 30, 1993 and 1992, and $1,661 and $1,589 for the years ended December 31, 1992 and 1991. 5. ACCRUED EXPENSES Accrued expenses as of June 30, 1993 and December 31, 1992 consist of the following:
JUNE 30, DECEMBER 31, 1993 1992 Payroll and related costs $1,096 $1,251 Warranty 800 800 Other 206 353 ------ ------ $2,102 $2,404 ====== ======
-17- 18 NOTES TO COMBINED STATEMENTS OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED AND REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS JUNE 30, 1993 AND 1992 AND DECEMBER 31, 1992 AND 1991 (IN THOUSANDS) 6. ALLOCATED COSTS Since the Business is an integral component of BMS, certain common nonmanufacturing costs incurred by BMS or other affiliated companies have been allocated to the Business in the accompanying statements of revenues and expenses before corporate taxes, interest and income taxes. The allocated nonmanufacturing costs included in selling, marketing and distribution expenses and general and administrative expense are as follows:
SIX MONTHS ENDED YEARS ENDED JUNE 30, DECEMBER 31, 1993 1992 1992 1991 Common costs allocated to: Selling, marketing and distribution $ 217 $ 893 $ 1,522 $ 73 General and 250 756 1,101 834 administrative -------- ------- -------- ------- $ 467 $ 1,649 $ 2,623 $ 907 ======== ======= ======== =======
The common costs have been allocated by BMS or other affiliated companies to the Business based upon various factors which management of the Business believes are reasonable. The allocated costs associated with retirement and postretirement benefits are discussed in Note 8 below and are not included herein. However, these allocations are not necessarily indicative of the expenses that would have been incurred had the Business been operated as a stand-alone entity. 7. COMMITMENTS Minimum rental commitments under all noncancellable operating leases in effect at June 30, 1993 are:
Year ending June 30 1994 $ 182 1995 154 1996 142 1997 120 Thereafter -- ------- $ 598 =======
-18- 19 NOTES TO COMBINED STATEMENTS OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED AND REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS JUNE 30, 1993 AND 1992 AND DECEMBER 31, 1992 AND 1991 (IN THOUSANDS) Rental commitments for the year ended June 30, 1994 include $23 of income from noncancellable subleases. Net rental expense amounted to $136 and $206 for the six months ended June 30, 1993 and 1992, and $378 and $1,422 for the years ended December 31, 1992 and 1991. 8. RETIREMENT AND POSTRETIREMENT BENEFITS Retirement benefits are provided to all eligible employees through the Bristol-Myers Squibb Retirement Income Plan (the "Pension Plan"). The Pension Plan is a noncontributory, defined benefit plan. Benefits are based primarily on years of credited service and on participants' compensation. The Business' employees also participate in a defined contribution plan maintained by BMS which complies with the provisions of Section 401 (K) of the Internal Revenue Code (the "Savings Plan"). The assets, projected benefit obligation and the related costs associated with the Pension Plan of the Business are not separately identifiable. The Business receives an allocation for a share of BMS' expenses related to the Pension Plan. The expense associated with the Pension Plan was $515 and $576 for the six months ended June 30, 1993 and 1992, and $1,107 and $1,441 for the years ended December 31, 1992 and 1991. Further, the expense associated with the Savings Plan was $276 and $314 for the six months ended June 30, 1993 and 1992, and $599 and $564 for the years ended December 31, 1992 and 1991. The liabilities for benefits under these plans are not included in the accompanying statements. Additionally, BMS provides medical and life insurance benefits for certain retired employees who reach normal retirement age while working for the Business. The Business receives an allocation for a share of the benefits as they are paid by BMS. The liability related to these benefits is not included in the accompanying statements. 9. FOREIGN OPERATIONS The accompanying financial statements include net inventory held by Zimmer and Convatec of $1,745 and $1,445 at June 30, 1993 and December 31, 1992. The net revenues and expense of these entities which relate to the Business, before corporate expenses, interest and income taxes, total $1,227 and $1,209 for the six months ended June 30, 1993 and 1992 and $2,904 and $81 for the years ended December 31, 1992 and 1991. -19- 20 NOTES TO COMBINED STATEMENTS OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED AND REVENUES AND EXPENSES BEFORE CORPORATE EXPENSES, INTEREST AND INCOME TAXES OF EDWARD WECK INCORPORATED AND RELATED INTERNATIONAL OPERATIONS JUNE 30, 1993 AND 1992 AND DECEMBER 31, 1992 AND 1991 (IN THOUSANDS) 10. ENVIRONMENTAL LIABILITY An environmental assessment of a Business property has indicated the presence of some relatively low levels of contamination. An outside consultant has been hired to assist in the identification and quantification of any contamination that may exist, as well as to suggest appropriate remediation, if any. Weck will retain the liability for the costs related to any remediation program. -20- -----END PRIVACY-ENHANCED MESSAGE-----