-----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, jfA9bb7zC50YCyH85P/ydbYaFkgQzTEFjFlc79IKUZNAQefeG/IroIhEqEJ85FnH U9AQUdyanUWQc74aIaueSQ== 0000009892-94-000010.txt : 19940512 0000009892-94-000010.hdr.sgml : 19940512 ACCESSION NUMBER: 0000009892-94-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARD C R INC /NJ/ CENTRAL INDEX KEY: 0000009892 STANDARD INDUSTRIAL CLASSIFICATION: 3841 IRS NUMBER: 221454160 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06926 FILM NUMBER: 94526024 BUSINESS ADDRESS: STREET 1: 730 CENTRAL AVE CITY: MURRAY HILL STATE: NJ ZIP: 07974 BUSINESS PHONE: 9082778000 MAIL ADDRESS: STREET 1: 730 CENTRAL AVENUE CITY: MURRAY HILL STATE: NJ ZIP: 07974 10-Q 1 1994 FIRST QUARTER 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 1994 Commission File Number 1-6926 C. R. BARD, INC. (Exact name of registrant as specified in its charter) New Jersey 22-1454160 (State of incorporation) (I.R.S. Employer Identification No.) 730 Central Avenue, Murray Hill, New Jersey 07974 (Address of principal executive offices) Registrant's telephone number, including area code: (908) 277-8000 Indicate by check mark 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at April 29, 1994 Common Stock - $.25 par value 51,869,670 C. R. BARD, INC. AND SUBSIDIARIES INDEX Page No. PART I - FINANCIAL INFORMATION Condensed Consolidated Balance Sheets - March 31, 1994 and December 31, 1993 1 Condensed Statements of Consolidated Income and Retained Earnings For The Three Months Ended March 31, 1994 and 1993 2 Condensed Consolidated Statements of Cash Flows For The Three Months Ended March 31, 1994 and 1993 3 Notes to Consolidated Financial Statements 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 4 PART II - OTHER INFORMATION 6 C. R. BARD, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (thousands of dollars)
March 31, December 31, 1994 1993 ASSETS (Unaudited) Current Assets: Cash and short-term investments $ 86,800 $ 75,000 Accounts receivable, net 169,300 167,300 Inventories 179,000 173,500 Other current assets 5,700 5,700 Total current assets 440,800 421,500 Long-term investments 17,800 17,700 Property, plant and equipment, net 171,400 168,900 Intangible assets, net of amortization 147,000 149,100 Other assets 43,200 41,400 $820,200 $798,600
LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-term borrowings and current maturities of long-term debt $103,300 $ 84,500 Accounts payable 37,100 39,300 Accrued expenses 119,300 124,500 Federal and foreign income taxes 14,700 16,000 Total current liabilities 274,400 264,300 Long-term debt 68,500 68,500 Other long-term liabilities 80,300 82,700 Shareholders' Investment Preferred stock, $1 par value, authorized 5,000,000 shares; none issued --- --- Common stock, $.25 par value, authorized 300,000,000 shares; issued and outstanding 51,979,445 shares and 52,098,124 shares 13,000 13,000 Capital in excess of par value 16,500 15,200 Retained earnings 377,900 367,400 Other (10,400) (12,500) 397,000 383,100 $820,200 $798,600 The accompanying notes to consolidated financial statements are an integral part of these balance sheets. -1-
C. R. BARD, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CONSOLIDATED INCOME AND RETAINED EARNINGS (thousands except per share amounts) (Unaudited)
For The Three Months Ended March 31, 1994 1993 Net sales $247,400 $236,400 Costs and expenses: Cost of goods sold 121,300 116,500 Marketing, selling and administrative 71,800 72,900 Research and development expense 17,700 17,100 210,800 206,500 Operating income 36,600 29,900 Interest expense 2,600 2,700 Other income(expense), net (1,000) 12,300 Income before taxes and effect of accounting change 33,000 39,500 Provision for income taxes 10,200 12,600 Income before effect of accounting change 22,800 26,900 Effect of change in accounting principle, net of taxes --- (6,100) Net income 22,800 20,800 Retained earnings, beginning of period 367,400 363,800 Treasury stock retired (5,000) (14,000) Cash dividends (7,300) (6,900) Retained earnings, end of period $377,900 $363,700 Weighted average shares outstanding 52,027 52,826 Income per share before effect of accounting change $ .44 $ .51 Net income per share $ .44 $ .39 Cash dividends per share $ .14 $ .13 The accompanying notes to consolidated financial statements are an integral part of these statements. -2-
C. R. BARD, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (thousands of dollars) (Unaudited)
For The Three Months Ended March 31, 1994 1993 Cash flows from operating activities: Net income $ 22,800 $ 20,800 Noncash items and other (8,500) 10,600 14,300 31,400 Cash flows from investing activities: Capital expenditures (9,300) (5,000) Other long-term investments, net (900) (14,900) (10,200) (19,900) Cash flows from financing activities: Purchase of common stock (5,100) (14,100) Dividends paid (7,300) (6,900) Other financing activities 20,100 300 7,700 (20,700) Increase(decrease) in cash and short- term investments $ 11,800 $ (9,200) The accompanying notes to consolidated financial statements are an integral part of these statements. -3-
C. R. BARD, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS The Company believes that it has included all adjustments, consisting only of normal recurring adjustments, which are necessary to present fairly the results of operations for these periods. The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements, as filed by the Company in the 1993 Annual Report on Form 10-K. The Company provides postretirement health care benefits and life insurance coverage to a limited number of employees at a subsidiary. Effective January 1, 1993, the Company adopted the provisions of a new accounting standard related to postretirement health care benefits resulting in the Company recording an after tax charge of $6,100,000. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Consolidated net sales for the first quarter of 1994 of $247,400,000 was an increase of 5 percent over the first quarter 1993 sales of $236,400,000. U.S. sales were $179,400,000 and international sales were $68,000,000 for the first quarter of 1994. These were increases of 5 and 3 percent respectively, over first quarter 1993 results. The currency translation effect reduced international sales by 2 percent and the sale last year of MedSystems division reduced U.S. sales by 3 percent. PRODUCT GROUP SUMMARY OF NET SALES (in thousands) For the Three Months Ended March 31, Percent 1994 1993 Change Cardiovascular $ 92,400 $ 93,500 (1) Urological 71,000 60,200 18 Surgical 84,000 82,700 2 Net sales $247,400 $236,400 5 - 4 - C. R. BARD, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (cont'd) The gross profit margins have increased slightly, from 50.7% to 51.0% for the three months ended March 31, 1993 and 1994, respectively. This is a result of cost controls put in place, manufacturing improvements and product mix improvements. Other income (expense), net, totaled $1,000,000 expense for the three months ended March 31, 1994 compared with income of $12,300,000 for the same period in 1993. Included in the 1993 amount is approximately $15,900,000 gain from the sale of the MedSystems division to Baxter International and several nonrecurring charges of over $5,000,000. Effective January 1, 1993 the Company adopted Statements of Financial Accounting Standards No. 106 "Accounting for Post Retirement Benefits Other Than Pensions" and No. 109 "Accounting for Income Taxes." The adoption of Statement No. 106 is further discussed in the accompanying footnotes. Net income of $22,800,000 and earnings per share of 44 cents for the quarter ended March 31, 1994 were increases of 10% and 13%, respectively, compared with the first quarter of 1993. During the first quarter of 1993 the Company invested over $19,000,000 acquiring the assets of several companies or product lines. The largest of these acquisitions were the assets of Solco Hospital Products Group, Inc., whose principal products are autotransfusion devices. This acquisition strengthened the Company's overall presence in the blood salvaging products business. During the first three months of 1994 and 1993, the Company acquired 186,400 and 541,700, respectively, of its common shares which were retired. On April 5, 1994 the U.S. District Court in Boston approved the plea agreement signed by the Company and the federal government on October 14, 1993. The agreement is in connection with charges stemming from violations, primarily during the 1980's by the Company's USCI division, of the Federal Food, Drug and Cosmetic Act and other statutes. Under the agreement, the Company will pay a fine and civil damages totaling $61 million which had been charged against the 1993 third quarter's earnings. By May 5, 1994 the Company will pay $30.5 million to the government in accordance with this agreement. This amount has been reflected as a short-term obligation in accrued expenses and the balance of the settlement has been reflected in other long-term liabilities. - 5 - C. R. BARD, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (cont'd) PART II - OTHER INFORMATION Item 1. Legal Proceedings On April 5, 1994 the U.S. District Court in Boston approved the Plea Agreement signed by the Company with the Department of Justice on October 14, 1993 in connection with charges stemming from violations, primarily during the 1980's by the Company's USCI division, of the Federal Food, Drug and Cosmetic Act and other statutes. Item 4. Submission of Matters to a Vote of Security Holders. (a) The registrant held its Annual Meeting of Shareholders on April 20, 1994. (b) Proxies for the meeting were solicited pursuant to Regulation 14; there was no solicitation in opposition to management's nominees for directors as listed in the Proxy Statement and all such nominees were elected. The results of voting for the three Class I directors elected for a term of three years to serve until the 1997 Annual Meeting were as follow: William T. Butler, M.D., For - 45,002,368 Authority Withheld - 361,800; Raymond B. Carey, Jr., For - 44,995,377 Authority Withheld - 368,791; and Daniel A. Cronin, Jr., For - 44,993,621 Authority Withheld - 370,547. (c) Briefly described below is each other matter voted upon at the Annual Meeting and the number of affirmative votes and negative votes with respect to each matter. (i) Approval of the 1994 Executive Bonus Plan. For 38,353,885 Against 6,439,079 Abstain 571,204 (ii) Ratification of the appointment of Arthur Andersen & Co. as independent public accountants for the year 1994. For 45,061,026 Against 172,590 Abstain 130,552 - 6 - C. R. BARD, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (cont'd) Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 10 - Material Contracts 1994 Executive Bonus Plan of C. R. Bard, Inc. (b) Registrant filed a Current Report on Form 8-K dated January 19, 1994 with respect to the Food and Drug Administration applying the provisions of the Applications Integrity Policy to the Company's USCI division. 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. C. R. BARD, INC. (Registrant) William C. Bopp /s/ William C. Bopp Senior Vice President and Chief Financial Officer Charles P. Grom /s/ Charles P. Grom Controller and Chief Accounting Officer DATE: May 4, 1994 - 7 - EX-10 2 ATTACHMENT TO 10-Q EXHIBIT 10 C. R. BARD, INC. 1994 Executive Bonus Plan This is the C. R. Bard, Inc. 1994 Executive Bonus Plan (the "Plan"), as authorized by the Board of Directors (the "Board") of C. R. Bard, Inc. (the "Company"), for the payment of incentive compensation to designated employees. 1. Definitions As used in the Plan, the following terms have the following meanings: "Code" shall mean the Internal Revenue Code of 1986, as amended. "Committee" shall mean the Compensation and Stock Option Committee of the Board. "Earnings Per Share" shall mean net income per share as reported in the audited annual consolidated financial statements of the Company and its subsidiaries, as adjusted for any items of an unusual and/or nonrecurring nature which are specified in writing by the Committee prior to the beginning of the plan year and are confirmed as such by the Company's independent auditors. "Group Financial Goal" as to any person shall mean the sum of the amounts reported as net income on the respective financial statements of the divisions or operating units which report to such person, as adjusted for any items of an unusual and/or nonrecurring nature which are specified in writing by the Committee prior to the beginning of the plan year and are confirmed as such by the Company's independent auditors. "Outside Directors" shall have the meaning ascribed to it in Section 162(m) of the Code and the regulations proposed or adopted thereunder. 2. Objectives The objectives of the Plan are to: * Help attract, retain and motivate the executives required to manage the Company; and * Promote the achievement of rigorous but realistic financial goals and encourage intensive fact-based business planning. A-1 3. Administration The Plan will be administered by the Committee. The Committee shall contain at least two Outside Directors. Subject to the provisions of the Plan, the Committee will have full authority to interpret the Plan, to establish and amend rules and regulations relating to it, to determine the terms and provisions for making awards and to make all other determinations necessary or advisable for the administration of the Plan. 4. Participation Participation in the Plan in any fiscal year will be limited to individuals who on the first day of the Company's fiscal year occupy the office of Chairman, Chief Executive Officer, President, Vice Chairman, Chief Operating Officer, Executive Vice President, Chief Financial Officer or Group Vice President. 5. Performance Goals Bonuses hereunder for all participants except Group Vice Presidents will be determined by reference to Earnings Per Share for each fiscal year, and bonuses hereunder for Group Vice Presidents will be determined 50 percent by reference to each of (i) Earnings Per Share for each fiscal year and (ii) the Group Financial Goal for each fiscal year. Before the commencement of each fiscal year, the Committee shall establish the Earnings Per Share and Group Financial Goal targets and the amount of bonus (expressed as a percentage of base salary in effect on the first day of the fiscal year) payable to each participant to the extent that Earnings Per Share and, as applicable, the Group Financial Goal equal, or fall within a range above or below the applicable target; provided however that with respect to the 1994 fiscal year, the Committee shall set such targets and percentages no later than April 1, 1994. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, or other similar corporate change, the Earnings Per Share target shall be appropriately adjusted by the Committee. 6. Maximum No bonus payable to an individual under this Plan for a given fiscal year shall exceed $1,400,000. 7. Time and Form of Payment (a) Payment. Except as provided in paragraph (b), of this Section 7, awards will be paid in cash as soon as practicable following the public announcement by the Company of its financial results for the fiscal year and written certification from the Committee that the goals described in Section 5 hereof have been attained A-2 (b) Deferral. A participant in the Plan may, prior to the commencement of a fiscal year, elect to defer payment of all or any portion of a bonus award. Amounts so deferred will be credited by the Company to an account for the participant and will be credited with interest on a quarterly basis at (i) the average interest rate received by the Company on its United States short-term investments for the fiscal quarter for which interest is credited or (ii) if no such short-term investments were held, the prime rate in effect on the last business day of the fiscal quarter announced by J. P. Morgan or, if no such rate is published, the prime rate published in The Wall Street Journal on such date. Amounts deferred pursuant to this paragraph 7(b) shall be paid in a lump sum upon termination of employment by reason of retirement, death, disability or otherwise or in installments as requested by the participant and agreed to by the Committee. 8. Death or Disability A participant in the Plan (or a participant's beneficiary) whose employment terminates during a fiscal year due to death or disability shall receive, after the end of the fiscal year, an amount equal to the bonus which would have been payable to such participant, pro-rated for that portion of the fiscal year during which the participant was employed. 9. Miscellaneous (a) Amendment and Termination of the Plan. The Committee with the approval of the Board may amend, modify or terminate this Plan at any time and from time to time. Notwithstanding the foregoing, no such amendment, modification or termination shall affect payment of a bonus for a fiscal year already ended. (b) No Assignment. Except as otherwise required by applicable law, no interest, benefit, payment, claim or right of any participant under the Plan shall be subject in any manner to any claims of any creditor of any participant or beneficiary, nor to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind, and any attempt to take any such action shall be null and void. (c) No Rights to Employment. Nothing contained in the Plan shall give any person the right to be retained in the employment of the Company or any of its affiliates or associated corporations or affect the right of any such employer to dismiss any employee. (d) Beneficiary Designation. The Committee shall establish such procedures as it deems necessary for a participant to designate a beneficiary to whom any amounts would be payable in the event of the participant's death. A-3 (e) Communications. (i) All notices and communications to the Committee in connection with the Plan shall be in writing, shall be delivered by first class mail, by courier or by hand, shall be addressed to the Committee and shall be deemed to have been given and delivered only upon actual receipt thereof by the Committee. All notices and communications from the Committee to participants or beneficiaries which the Committee deems necessary in connection with the Plan shall be in writing and shall be delivered to the participant or beneficiary or other person at the person's address last appearing on the records of the Company. (ii) Each participant shall file with the Committee such pertinent information concerning the participant or the participant's beneficiary as is required by the Committee. (f) Plan Unfunded. The entire cost of this Plan shall be paid from the general assets of the Company. The rights of any person to receive benefits under the Plan shall be only those of a general unsecured creditor, and neither the Company, the Board nor the Committee shall be responsible for the adequacy of the general assets of the Company to meet and discharge Plan liabilities nor shall the Company be required to reserve or otherwise set aside funds for the payment of its obligations hereunder. (g) Applicable Law. The Plan and all rights thereunder shall be governed by and construed in accordance with the laws of the State of New Jersey. A-4 -----END PRIVACY-ENHANCED MESSAGE-----