-----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, Mub5COMD57N88bM725im+wcc9EY+C0seVsL4xDvS0a8cVrz9QuvCyJs1jq/Dklw7 8KCbRUH0WXQO+O+Pnc3W8w== 0000009892-94-000021.txt : 19940819 0000009892-94-000021.hdr.sgml : 19940819 ACCESSION NUMBER: 0000009892-94-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940812 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: 94543371 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 June 30, 1994 Commission File Number 1-6926 C. R. BARD, INC. (Exact name of registrant as specified in its charter) New Jersey (State of incorporation) 22-1454160 (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 July 31, 1994 Common Stock - $.25 par value 51,893,628 C. R. BARD, INC. AND SUBSIDIARIES INDEX Page No. PART I - FINANCIAL INFORMATION Condensed Consolidated Balance Sheets - June 30, 1994 and December 31, 1993 1 Condensed Statements of Consolidated Income and Retained Earnings For The Quarter and Six Months Ended June 30, 1994 and 1993 2 Condensed Consolidated Statements of Cash Flows For The Six Months Ended June 30, 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)
June 30, December 31, 1994 1993 (Unaudited) ASSETS Current Assets: Cash and short-term investments $ 72,400 $ 75,000 Accounts receivable, net 175,400 167,300 Inventories 186,600 173,500 Other current assets 7,300 5,700 Total current assets 441,700 421,500 Long-term investments 17,800 17,700 Property, plant and equipment, net 177,100 168,900 Intangible assets, net of amortization 144,400 149,100 Other assets 45,300 41,400 $826,300 $798,600
LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-term borrowings and current maturities of long-term debt $124,300 $ 84,500 Accounts payable 35,400 39,300 Accrued expenses 98,000 124,500 Federal and foreign income taxes 13,600 16,000 Total current liabilities 271,300 264,300 Long-term debt 68,500 68,500 Other long-term liabilities 67,400 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 51,893,628 shares and 52,098,124 shares 13,000 13,000 Capital in excess of par value 16,600 15,200 Retained earnings 391,200 367,400 Other (1,700) (12,500) 419,100 383,100 $826,300 $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 Quarter Ended For Six Months Ended June 30, June 30, 1994 1993 1994 1993 Net sales $256,300 $243,900 $503,700 $480,300 Costs and expenses: Cost of goods sold 124,500 119,000 245,800 235,500 Marketing, selling and administrative 74,900 74,900 146,700 147,800 Research and development 18,700 17,300 36,400 34,400 218,100 211,200 428,900 417,700 Operating income 38,200 32,700 74,800 62,600 Interest expense 3,200 2,800 5,800 5,500 Other income(expense), net (1,200) (900) (2,200) 11,400 Income before taxes and effect of accounting change 33,800 29,000 66,800 68,500 Provision for income taxes 10,500 8,700 20,700 21,300 Income before effect of accounting change 23,300 20,300 46,100 47,200 Effect of change in accounting principle, net of taxes --- --- --- (6,100) Net income 23,300 20,300 46,100 41,100 Retained earnings, beginning of period 377,900 363,700 367,400 363,800 Treasury stock retired (2,700) (9,700) (7,700) (23,700) Cash dividends (7,300) (6,700) (14,600) (13,600) Retained earnings, end of period $391,200 $367,600 $391,200 $367,600 Weighted average shares outstanding 51,992 52,579 Income per share before effect of accounting change $ .45 $ .39 $ .89 $ .90 Net income per share $ .45 $ .39 $ .89 $ .78 Cash dividends per share $ .14 $ .13 $ .28 $ .26
The accompanying notes to condensed 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 Six Months Ended June 30, 1994 1993 Cash flows from operating activities: Net income $ 46,100 $ 41,100 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,100 14,700 Other non-cash items 1,900 1,300 Changes in assets and liabilities: Current assets (22,800) (4,000) Current liabilities (32,800) (100) Other long-term liabilities (15,300) 6,400 (5,800) 59,400 Cash flows from investing activities: Capital expenditures (18,900) (11,000) Other long-term investments, net 3,000 (18,600) (15,900) (29,600) Cash flows from financing activities: Purchase of common stock (7,700) (23,900) Dividends paid (14,600) (13,600) Short-term borrowings and other 41,400 16,500 19,100 (21,000) Increase(decrease) in cash and short-term investments (2,600) 8,800 Cash and short-term investments- beginning of year 75,000 49,800 Cash and short-term investments- end of period $ 72,400 $ 58,600
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 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 second quarter of $256,300,000 increased 5 percent over the second quarter 1993 net sales of $243,900,000. Sales for the first six months of 1994 of $503,700,000 increased 5 percent over the $480,300,000 for the same period last year. Sales in the U.S. for the second quarter of 1994 were $180,100,000, up 7 percent from 1993, while international sales of $76,200,000 were level with last year. The currency translation effect reduced sales outside the U.S. in the second quarter of 1994 by 2 percent. For the first six months of 1994, U.S. sales totaled $359,500,000, up 6 percent, while international sales increased 1 percent to $144,200,000. Currency translation for the first half of 1994 lowered worldwide sales by approximately 1 percent, and the sale of Bard MedSystems division, reported in February 1993, had the impact of lowering sales an additional 1 percent. PRODUCT GROUP SUMMARY OF NET SALES (in thousands) Quarter Ended June 30, Six Months Ended June 30, Percent Percent 1994 1993 Change 1994 1993 Change Cardiovascular $ 97,500 $100,700 (3) $189,900 $194,200 (2) Urological 71,600 61,400 17 142,600 121,600 17 Surgical 87,200 81,800 7 171,200 164,500 4 Net Sales $256,300 $243,900 5 $503,700 $480,300 5 -4- C. R. BARD, INC. AND SUBSIDIARIES In the second quarter of 1994 the urological and surgical product groups continued to lead the Company's revenue and earnings growth. Contigen, the new stress urinary incontinence product was the Company's most important contributor with first-half revenue in excess of $15 million. Cardiovascular sales remain soft, primarily due to a lack of new product approvals in the United States at the USCI division. The Company continues to develop and launch new balloon angioplasty products in international markets. The gross profit margins of 51 percent remain the same for the six months ended June 30, 1994 and 1993. Other income(expense), net, totaled $2,200,000 in expenses for the first half of 1994 and $11,400,000 in revenues for the same period last year. 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. Second quarter consolidated net income of $23,300,000 increased 15% from the $20,300,000 second quarter results of last year. Net income for the six months of 1994 of $46,100,000 reflects an increase of 12% from $41,100,000 for the same period last year. For the first six months of 1994, the Company has increased its short-term borrowings by approximately $40,000,000. These additional borrowings were used for general working capital and a portion was used for the payment of the Department of Justice settlement. Accrued expenses declined by $26,500,000 and other long-term liabilities declined by $15,300,000. These reductions were mainly a result of the Company paying $30,500,000 to the federal government and the reclassification of $15,300,000 from long-term to short-term for its obligations under the Department of Justice settlement agreement. Other shareholders' investment has increased by $10,800,000 in the first six months of 1994 mainly as a result of translation adjustments. During the first six months of 1993 the Company invested over $19,000,000 acquiring the assets of several companies or product lines. The largest of these companies acquired were the assets of Solco Hospital Products Group, Inc., whose principal products are autotransfusion devices. - 5 - C. R. BARD, INC. AND SUBSIDIARIES During the first six months of 1994 and 1993, the Company acquired 300,000 and 978,600 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 agreed to pay a fine and civil damages totaling $61 million which had been charged against the 1993 third quarter's earnings. In May 1994, the Company paid $30.5 million to the government in accordance with this agreement. PART II - OTHER INFORMATION Item 1. Legal Proceedings By letter dated May 20, 1993, EPA notified Bard Urological Division's Glens Falls facility that it may be a Potentially Responsible Party ("PRP") relative to clean-up of the Frontier Chemical site, which is located in Niagara Falls, New York. In September 1993, the Company entered into a consent order concerning the first phase of the cleanup, which was a drum removal action. The Company's liability for the first phase is currently estimated at $119,000. As previously disclosed, the Appellate Division of New Jersey Superior Court dismissed the appeal of a single shareholder seeking to challenge as inadequate the 1991 settlements of all shareholder litigation arising out of the withdrawal of certain angioplasty catheters from the United States market. On June 7, 1994, the New Jersey Supreme Court denied that shareholder's petition to appeal the dismissal. Item 6. Exhibits and Reports on Form 8-K (b) Registrant filed a Current Report on Form 8-K dated May 9, 1994 with respect to updating the status of FDA product submission audits. - 6 - C. R. BARD, INC. AND SUBSIDIARIES 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/ Controller and Chief Accounting Officer August 12, 1994 - 7 - -----END PRIVACY-ENHANCED MESSAGE-----