-----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, FbZMBTY5VzCxmHwDnmDHsTx+pPPO65KhpONZXTUmF4arZvwocVSTFgYIWT+kdH4H ZoWs/czE9Npvmaaf6p1jNg== 0000009892-95-000030.txt : 19951119 0000009892-95-000030.hdr.sgml : 19951119 ACCESSION NUMBER: 0000009892-95-000030 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARD C R INC /NJ/ CENTRAL INDEX KEY: 0000009892 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [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: 95590657 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 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 1995 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 October 31, 1995 Common Stock - $.25 par value 56,898,875 C. R. BARD, INC. AND SUBSIDIARIES INDEX Page No. PART I - FINANCIAL INFORMATION Condensed Consolidated Balance Sheets - September 30, 1995 and December 31, 1994 1 Statements of Consolidated Income and Retained Earnings For The Quarter and Nine Months Ended September 30, 1995 and 1994 2 Condensed Consolidated Statements of Cash Flows For The Nine Months Ended September 30, 1995 and 1994 3 Notes to Consolidated Financial Statements 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 5 PART II - OTHER INFORMATION 8 C. R. BARD, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (thousands of dollars)
September 30, December 31, 1995 1994 ASSETS Current Assets: Cash and short-term investments $ 35,800 $ 34,300 Accounts receivable, net 201,700 191,300 Inventories 228,100 209,300 Other current assets 14,500 9,100 Total current assets 480,100 444,000 Long-term investments 11,700 13,300 Property, plant and equipment 349,800 324,800 Less: accumulated depreciation 136,800 115,700 213,000 209,100 Intangible assets, net of amortization 327,300 316,900 Other assets 52,200 52,300 $1,084,300 $1,035,600
LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-term borrowings and current maturities of long-term debt $ 101,200 $ 198,900 Accounts payable 33,600 41,800 Accrued expenses 147,800 125,600 Federal and foreign income taxes 5,500 8,000 Total current liabilities 288,100 374,300 Long-term debt 198,300 93,400 Other long-term liabilities 54,100 76,300 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 55,499,634 shares and 55,239,869 shares 13,900 13,800 Capital in excess of par value 56,500 48,800 Retained earnings 463,600 426,000 Other 9,800 3,000 543,800 491,600 $1,084,300 $1,035,600
The accompanying notes to consolidated financial statements are an integral part of these balance sheets. - 1 - C. R. BARD, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME AND RETAINED EARNINGS (thousands except per share amounts)
For The Qtr. Ended For Nine Mos. Ended September 30, September 30, 1995 1994 1995 1994 Net sales $273,500 $259,200 $834,000 $777,700 Costs and expenses: Cost of goods sold 132,900 125,300 405,000 376,100 Marketing, selling & administrative 85,300 79,100 254,900 232,900 Research and development 18,000 17,100 56,700 54,000 Costs to combine operations 12,500 --- 12,500 --- 248,700 221,500 729,100 663,000 Operating income 24,800 37,700 104,900 114,700 Interest expense 6,200 4,100 18,600 10,400 Other income(expense), net 2,700 (600) 5,800 (2,800) Income before taxes 21,300 33,000 92,100 101,500 Provision for income taxes 7,200 9,900 28,500 31,100 Net Income 14,100 23,100 63,600 70,400 Retained earnings, beginning of period 457,800 414,000 426,000 389,000 Treasury stock retired --- (1,200) (2,000) (8,900) Cash dividends (8,300) (7,700) (24,000) (22,300) Retained earnings, end of period $463,600 $428,200 $463,600 $428,200 Weighted average shares outstanding 55,283 55,110 Net income per share $ .25 $ .42 $ 1.15 $ 1.28 Cash dividends per share $ .16 $ .15 $ .46 $ .43
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)
For The Nine Months Ended September 30, 1995 1994 Cash flows from operating activities: Net income $ 63,600 $ 70,400 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 35,600 30,100 Other noncash items (1,400) 700 Changes in assets and liabilities: Current assets (34,600) (43,500) Current liabilities 11,500 (22,300) Other long-term liabilities (22,200) (18,500) 52,500 16,900 Cash flows from investing activities: Capital expenditures (22,900) (30,000) Other long-term investments, net (17,100) (6,300) (40,000) (36,300) Cash flows from financing activities: Purchase of common stock (2,000) (9,000) Dividends paid (24,000) (22,300) Short-term borrowings and other (89,900) 83,400 Long-term borrowings 104,900 1,500 (11,000) 53,600 Increase in cash and short-term investments 1,500 34,200 Cash and short-term investments- beginning of year 34,300 75,800 Cash and short-term investments- end of period $ 35,800 $110,000
The accompanying notes to condensed consolidated financial statements are an integral part of these statements. -3- C. R. BARD, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The financial statements contained in this filing have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and have not been audited, however, 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 1994 Annual Report on Form 10-K and the Company's 1995 first and second quarters filed on Form 10-Q. Acquisitions On September 28, 1995 the Company completed the stock-for-stock merger with MedChem Products, Inc. where MedChem has become a wholly-owned subsidiary of Bard. The merger has been accounted for as a pooling of interests. All financial information contained in this filing reflects the merger with MedChem and accordingly prior periods have been restated. Under the terms of the merger agreement Bard issued 3,192,345 common shares to MedChem shareholders. The unaudited results of operations of MedChem before the combination with Bard were: net sales of $7,300,000 and net income of $300,000 for the quarter ended September 30, 1994; and net sales of $22,100,000 and net income of $1,500,000 for the nine months ended September 30, 1994; net sales of $9,100,000 and net income of $500,000 for the quarter ended September 30, 1995; and net sales of $28,300,000 and net income of $1,800,000 for the nine months ended September 30, 1995. These MedChem 1995 results do not include one-time charges related to the merger amounting to $9,900,000 or $.18 per share after-tax reflected in the third quarter ended September 30, 1995. On October 20, 1995 the Company acquired American Hydro-Surgical Instruments, Inc. in a stock-for-stock merger which will be accounted for as a pooling of interests. Bard issued 1,338,446 common shares to American Hydro-Surgical Instruments shareholders. American Hydro-Surgical Instruments was a privately held company which develops, manufactures and markets a line of high-quality irrigation instruments used by surgeons during laparoscopic procedures. Combining MedChem Products, Inc. and American Hydro-Surgical Instruments, Inc. with Bard the results of operations are: net sales $941,500,000, net income $68,300,000 and earnings per share $1.21 for the ten months ended October 31, 1995 and net sales $873,900,000, net income $76,400,000 and earnings per share $1.35 for the ten months ended October 31, 1994. The net income for the ten month period ended October 31, 1995 includes an after-tax charge of $13,500,000 or $.24 per share for one-time charges related to the acquisition of these companies. - 4 - C. R. BARD, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Acquisitions (continued) In October 1994, the Company acquired Angiomed AG, a German medical device manufacturer which was accounted for as a purchase. The funds used for this acquisition were included in cash and short- term investments and were financed by a combination of European cash deposits and some additional short-term borrowings which were obtained prior to September 30, 1994 and were reflected in the balance sheet as of that date. During the first 10 months of 1994, including the Angiomed acquisition, the Company invested over $83,000,000 in acquiring new businesses or product lines. Short-Term Borrowings and Long-Term Debt In June 1995, the Company completed the arrangement of a $350,000,000 five-year syndicated credit facility. This loan commitment by a group of 15 banks will allow Bard to borrow at interest rates slightly over LIBOR while securing a well-balanced debt structure. As a result of this loan facility, the Company has classified $120,000,000 as long-term debt at September 30, 1995. - 5 - C. R. BARD, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Consolidated net sales for the third quarter of $273,500,000 increased 6% against the third quarter 1994 level of $259,200,000. Sales for the nine months of 1995 of $834,000,000 increased 7% against the same period last year. Sales in the U.S. for the third quarter were $178,100,000, a 3% decrease from 1994. Sales outside the U.S. increased 25% in the quarter to $95,400,000. The currency translation effect increased international sales in this quarter by 8%. For the nine months ended September 30, 1995, sales in the U.S. were $547,600,000, while international sales totaled $286,400,000. PRODUCT GROUP SUMMARY OF NET SALES (in thousands) Quarter Ended Nine Months Ended September 30, September 30, % % 1995 1994 Change 1995 1994 Change Cardiovascular $ 89,700 $ 90,500 (1) $278,700 $280,400 (1) Urological 79,800 72,300 10 238,100 214,900 11 Surgical 104,000 96,400 8 317,200 282,400 12 Net sales $273,500 $259,200 6 $834,000 $777,700 7 In the third quarter of 1995 the urological and surgical products groups continued to lead the Company's revenue growth. Cardiovascular sales remain soft, primarily due to a lack of new product approvals in the United States at the USCI division, as well as price declines in balloon angioplasty catheters. The Company continues to develop and launch new balloon angioplasty products in international markets. Marketing, selling and administrative expenses in 1995 have increased faster than sales mainly as a result of the additional selling expenses and amortization of goodwill resulting from the acquisitions made in late 1994. The third quarter of 1995 includes a pretax charge of $12,500,000 related to one-time costs associated with the acquisition of MedChem in a transaction accounted for as a pooling of interests. Interest expense for the third quarter and nine month period of 1995 have increased due to increase in borrowings used for acquisitions. - 6 - C. R. BARD, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Other income(expense), net, amounted to income of $5,800,000 for the nine months ended September 30, 1995 as compared with an expense of $2,800,000 for the same period in 1994. The 1995 other income is mainly a result of favorable foreign exchange transactions. The Company results for the quarter ended September 30, 1995 was net income of $14,100,000 or $.25 per share compared with $23,100,000 or $.42 per share for the same quarter in 1994. Third quarter 1995 net income includes a one-time after-tax charge of $9,900,000 or $.18 per share for costs associated with the acquisition of MedChem. In addition, the dilution effect of the merger reduced third quarter results by another $.02 per share. Cash and short-term investments increased during the nine month period ended September 30, 1994 to accumulate sufficient funds to acquire Angiomed in October 1994 (see Acquisition footnote for further discussion). Since June 1995, when the Company entered into a new credit facility, it reduced its short-term borrowings and increased its long-term debt. The Company believes it could borrow adequate funds at competitive terms and rates should the need arise. Short-term borrowings increased during the first nine months of 1994 by approximately $79,400,000. These borrowings which included foreign currency borrowings were used for general working capital and in anticipation of acquiring Angiomed in October 1994. Other long-term liabilities decreased by $22,200,000 during the nine month period ended September 30, 1995. This reduction was mainly a result of the Company reclassifying $15,300,000 from long- term liabilities to accrued expenses for its obligations under the Department of Justice settlement agreement. Other shareholders' investment has increased by $6,800,000 in the first nine months of 1995 primarily as a result of foreign currency translation adjustments. During the first nine months of 1995 and 1994, the Company acquired and retired 75,000 and 350,000 shares respectively, of its common stock. - 7 - C. R. BARD, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION Item 1. Legal Proceedings On October 18, 1995 the Board of Patent Appeals and Interferences of the United States Patent and Trademark Office issued a final decision in an inventorship contest between C. R. Bard, Inc. and W. L. Gore & Associates, Inc. awarding patent rights in expanded polytetrafluorethylene (PTFE) vascular prostheses to Bard. The patent rights awarded to Bard are sufficiently broad to cover virtually all expanded PTFE vascular prostheses successfully used to date. Once this patent is issued, Bard will be the only company permitted to manufacture and sell expanded PTFE vascular prostheses in the United States. A court appeal of the final decision is possible, but the Company believes that the final decision of the Board would be affirmed in any appeal. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 27 - Financial Data Schedule (b) Registrant filed a Current Report on Form 8-K dated July 6, 1995 announcing that the Food and Drug Administration had lifted the Application Integrity Policy imposed on Bard's USCI division in January 1994. 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 Executive Vice President and Chief Financial Officer Charles P. Grom /s/ Charles P. Grom Vice President and Controller DATE: November 13, 1995 - 8 - EX-27 2
5 1,000 9-MOS DEC-31-1995 SEP-30-1995 35,800 0 201,700 0 228,100 480,100 349,800 136,800 1,084,300 288,100 198,300 13,900 0 0 529,900 1,084,300 834,000 834,000 405,000 324,100 0 0 18,600 92,100 28,500 63,600 0 0 0 63,600 1.15 1.15
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