-----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, ShGb6q0GET7L/PoNn/H1ZJEhYNGDYYtzFs6/UXdofi2hK7jx5rgH4TuCEvO6Yx3L +lKheIAAyPvpDAoAZPyC0g== 0000009892-97-000007.txt : 19970514 0000009892-97-000007.hdr.sgml : 19970514 ACCESSION NUMBER: 0000009892-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 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: 97602076 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 PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 1997 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 28, 1997 Common Stock - $.25 par value 57,093,752 C. R. BARD, INC. AND SUBSIDIARIES INDEX Page No. PART I - FINANCIAL INFORMATION Condensed Consolidated Balance Sheets - March 31, 1997 and December 31, 1996 1 Condensed Statements of Consolidated Income and Retained Earnings For The Three Months Ended March 31, 1997 and 1996 2 Condensed Consolidated Statements of Cash Flows For The Three Months Ended March 31, 1997 and 1996 3 Notes to Consolidated Financial Statements 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 4 PART II - OTHER INFORMATION 7 C. R. BARD, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (thousands of dollars)
March 31, December 31, 1997 1996 (Unaudited) ASSETS Current Assets: Cash and short-term investments $ 84,000 $ 78,000 Accounts receivable, net 237,900 245,400 Inventories 242,000 245,000 Other current assets 10,800 8,500 Total current assets 574,700 576,900 Property, plant and equipment, net 223,500 226,100 Intangible assets, net of amortization 434,800 447,200 Other assets 84,500 82,300 $1,317,500 $1,332,500
LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-term borrowings and current maturities of long-term debt $ 139,600 $ 148,200 Accounts payable 50,100 59,200 Accrued expenses 118,600 121,500 Federal and foreign income taxes 19,600 7,300 Total current liabilities 327,900 336,200 Long-term debt 342,700 342,800 Other long-term liabilities 52,300 52,000 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 56,999,599 shares and 56,985,983 shares 14,300 14,300 Capital in excess of par value 78,300 77,500 Retained earnings 522,400 506,700 Other (20,400) 3,000 594,600 601,500 $1,317,500 $1,332,500
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, 1997 1996 Net sales $300,700 $289,200 Costs and expenses: Cost of goods sold 143,200 140,600 Marketing, selling and administrative 94,100 86,400 Research and development expense 21,100 19,300 Interest expense 8,200 6,000 Other(income)expense, net (3,800) 26,300 Total costs and expenses 262,800 278,600 Income before taxes 37,900 10,600 Provision for income taxes 11,800 (16,500) Net income 26,100 27,100 Retained earnings, beginning of period 506,700 478,900 Treasury stock retired (700) (9,600) Cash dividends (9,700) (9,100) Retained earnings, end of period $522,400 $487,300 Weighted average shares outstanding 57,029 56,903 Net income per share $ .46 $ .48 Cash dividends per share $ .17 $ .16
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, 1997 1996 Cash flows from operating activities: Net income $ 26,100 $ 27,100 Noncash items and other (10,100) (5,700) 16,000 21,400 Cash flows from investing activities: Capital expenditures $ (8,800) (8,100) Other long-term investments, net (17,800) (37,700) (26,600) (45,800) Cash flows from financing activities: Purchase of common stock (700) (9,700) Dividends paid (9,700) (9,100) Other financing activities (7,800) 42,500 (18,200) 23,700 Cash and cash equivalents: Increase (decrease) during the period (28,800) (700) Balance at January 1, 63,600 37,400 Balance at March 31, $ 34,800 $ 36,700
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 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, C. R. Bard, Inc. ("Bard" or 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 1996 Annual Report on Form 10-K. Accounting Policies Included in the balance sheet caption "Cash and short-term investments" are short-term investments which have maturities greater than ninety days and amounted to $49,200,000 at March 31, 1997. These investments have not been treated as cash and cash equivalents for cash flow presentation purposes. Effective for fiscal years ending after December 15, 1997, the Company is required to adopt Statement of Financial Accounting Standard No. 128 "Earnings Per Share" ("FAS 128"). FAS 128 requires the presentation of basic earnings per share and diluted earnings per share. "Basic earnings per share" represents net income divided by the weighted average shares outstanding and is consistent with the Company's historical presentation. "Diluted earnings per share" represents net income divided by weighted average shares outstanding adjusted for the incremental dilution of outstanding employee stock options and awards. Diluted earnings per share would have been $.45 and $.47, respectively for the three months ended March 31, 1997 and 1996. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company announced on April 16, 1997 at its annual meeting that it will now report sales using five new product group categories. Designed around the concept of disease state management, three of the Company's new product group categories are: vascular diagnosis and intervention, urological diagnosis and intervention, and oncological diagnosis and intervention. Sales from these three product groups represent 82 percent of Bard's first quarter revenue. A fourth product group entitled surgical specialties represents 10 percent of total sales and when combined with the three disease state product groups represents Bard's emphasis sales category. The remaining 8 percent of net sales resulting from de-emphasized products will be reported in the "other" category. - 4 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Consolidated net sales for the first quarter of 1997 of $300,700,000 increased 4 percent over the first quarter 1996 sales of $289,200,000. Sales in the U.S. for the first quarter of 1997 were $198,300,000, an increase of 2 percent from 1996, while international sales were up 7 percent against last year. The impact of a strengthening dollar in the first quarter decreased sales outside the U.S. by 5 percent. Pricing pressures have decreased sales by 1 percent. PRODUCT GROUP SUMMARY OF NET SALES (in thousands) For the Three Months Ended March 31, Percent 1997 1996 Change Vascular $111,600 $102,600 9 Urology 78,000 73,000 7 Oncology 55,300 53,000 4 Surgery 30,600 28,000 9 Subtotal-emphasis products 275,500 256,600 7 Other 25,200 32,600 (23) Total-worldwide $300,700 $289,200 4 Increased graft sales due to the IMPRA acquisition contributed to the 9 percent increase in vascular sales. Strong Foley catheter sales contributed to the urology increase of 7 percent. Increases in specialty access products and mesh were primarily responsible for the 4 and 9 percent growth in the oncology and surgery categories, respectively. The gross profit margin increased to 52.4 percent from 51.4 percent for the three months ended March 31, 1997 and 1996, respectively, mainly as a result of product mix and favorable variances. Other income and expense includes the gain from a product line sale and foreign exchange losses which in total increase pretax income by $2,900,000 with a favorable after tax impact of approximately 3 cents per share. The first quarter of 1996 included nonrecurring items related to an asset writedown, the receipt of revenues related to prior year royalties, miscellaneous charges and tax reserve reversals reducing pretax income by $27,100,000 with a positive after-tax impact of approximately 1 cent per share. The Company's results for the quarter ended March 31, 1997 were net income of $26,100,000 or 46 cents per share as compared with $27,100,000 or 48 cents per share for the same quarter in 1996. During the first three months of 1997 and 1996, the Company acquired 25,000 and 274,500, respectively, of its common shares which were retired. - 5 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Cautionary Statement Regarding Forward-Looking Information Certain statements contained herein or in other Company documents and certain statements that may be made by management of the Company orally may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because actual results are affected by risks and uncertainties, the Company cautions investors that actual results may differ materially from those expressed or implied. Factors which could cause the actual results to differ materially from expected and historical results include, but are not limited to: health care industry consolidation resulting in customer demands for price concessions, competitor's attempts to gain market share through aggressive marketing programs; fewer medical procedures performed in a cost-conscious environment; the lengthy approval time by the FDA or other government authorities to clear medical devices for commercial release; unanticipated product failures; legislative or administrative reforms to the U.S. Medicare and Medicaid systems or other non-U.S. reimbursement systems in a manner that would significantly reduce reimbursements for procedures using the Company's medical devices; the acquisition of key patents by competitors that would have the effect of excluding the Company from new market segments; the uncertainty of whether increased research and development expenditures will result in increased sales; unpredictability of existing and future litigation including litigation regarding product liability; price increases from the Company's suppliers of critical components; foreign currency fluctuations; the risk that the Company may not achieve manufacturing or administrative efficiencies as a result of the Company's recent reorganization around disease management states or in the integration of recently acquired businesses. - 6 - C. R. BARD, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. (a) The registrant held its Annual Meeting of Shareholders on April 16, 1997. (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 four Class I directors elected for a term of three years to serve until the 2000 Annual Meeting were as follow: William C. Bopp, For - 46,495,104 Authority Withheld - 814,444; Marc C. Breslawsky, For - 46,476,029 Authority Withheld - 833,519; William T. Butler, M.D., For - 46,493,588 Authority Withheld - 815,960 and Daniel A. Cronin, Jr., For - 46,466,289 Authority Withheld - 843,259; and the additional Class II director elected for a term of one year was as follow: Tony L. White, For - 46,482,321 Authority Withheld - 827,227. (c) Briefly described below is each other matter voted upon at the Annual Meeting and the number of affirmative votes, negative votes and abstentions and broker nonvotes with respect to each matter. (I) Ratification of the appointment of Arthur Andersen LLP as independent public accountants for the year 1997. For 47,153,463 Against 72,637 Abstain and Broker Nonvotes 83,488 Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 12.1 - Computation of Ratio of Earnings to Fixed Charges (b) Exhibit 27 - Financial Data Schedule (c) There were no reports on Form 8-K filed by the Company during the quarter ended March 31, 1997. - 7 - 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 Executive Vice President and Chief Financial Officer Charles P. Grom /s/ Charles P. Grom Vice President and Controller and Chief Accounting Officer DATE: May 13, 1997 - 8 - EX-12 2 Exhibit 12.1
Computation of Ratio of Earnings to Fixed Charges Three Months Ending 3/31/96 1996 1995 1994 1993 1992 Earnings before taxes $37,900 $102,700 $123,500 $104,100 $101,400 $120,200 Add(Deduct) Fixed Charges 9,800 33,500 31,500 23,200 18,700 19,900 Undistributed earnings of less than 50% owned companies carried at equity (150) (700) (800) (400) (200) (500) Interest capitalized 0 0 0 (200) 0 (300) Earnings available for fixed charges $47,550 $135,500 $154,200 $126,700 $119,900 $139,300 Fixed charges: Interest, including amounts capitalized 8,200 26,400 24,200 16,500 12,500 13,700 Proportion of rent expense deemed to represent interest factor 1,600 7,100 7,300 6,700 6,200 6,200 Fixed Charges $ 9,800 $ 33,500 $ 31,500 $ 23,200 $ 18,700 $ 19,900 Ratio of earnings to fixed charges 4.85 4.04 4.89 5.46 6.41 7.00
EX-27 3
5 1,000 3-MOS DEC-31-1997 MAR-31-1997 84,000 0 237,900 11,800 242,000 574,700 368,500 145,000 1,317,500 327,900 342,700 0 0 14,300 580,300 1,317,500 300,700 300,700 143,200 143,200 119,600 0 8,200 37,900 11,800 26,100 0 0 0 26,100 .46 .45
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