UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A No. 1
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 29, 1995
United States Surgical Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-9776 13-2518270
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification Number)
150 Glover Avenue, Norwalk, CT 06856
(Address of principal executive offices)
(203) 845-1000
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
On September 29, 1995, Auto Suture Japan Inc., a wholly owned subsidiary
of the Company, completed the final closing of the acquisition of certain
assets of Century Medical, Inc. ("CMI"). These assets consist of a
laparoscopic training center, inventory and other assets. CMI is a wholly
owned subsidiary of ITOCHU Corporation and prior to closing was the
distributor of the Company's products in Japan. The assets acquired were
used by CMI in the conduct of sales of the Company's products in Japan and
will be continued to be used by Auto Suture Japan Inc. for such purpose.
The Company paid approximately $62 million for the assets in a cash
transaction, with an $11 million initial payment during 1995 and with the
balance to be paid over six years, interest free. The initial cash payment
was funded by cash from the Company's operations; the balance of the
payments are expected to be made out of cash flow from operations of Auto
Suture Japan Inc. The amount of consideration was determined by reference
to a formula in the agreement establishing the distributorship which gave
the Company an option to purchase the assets on a predetermined basis.
Closing of the transaction was originally expected to occur during the
first quarter of 1995, but was voluntarily postponed by the Company
pending a governmental investigation into CMI's operations unrelated to
the sale of the Company's products. In connection with postponing the
final closing, an interim agency agreement was entered into, pursuant to
which the Company, effective as of April 1, 1995, assumed the risks and
rewards of selling its products to third parties in Japan. As of that
date, the Company began recognizing CMI's revenues and selling expenses in
the Company's consolidated financial statements relative to the sale of
the Company's products in Japan.
Auto Suture Japan Inc. will have a fiscal year end of November 30, the
same year end as all other of the Company's international subsidiaries. As
a result, Auto Suture Japan's fourth quarter will be only two months in
duration and it is estimated that sales for that period will be
approximately $8-10 million less than a full three month quarter.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired.
An audited income statement related to the sales of the Company's products
by CMI, for CMI's fiscal year ended March 31, 1995, was filed by the
Company with its Form 8-K Report filed on July 10, 1995. No audited
balance sheet has been or will be prepared and filed since it is not
possible to develop an audited balance sheet that relates solely to the
distribution network of CMI for the Company's products. The assets
acquired in the acquisition are reflected in the Company's balance sheet
at September 30, 1995 as filed in the Company's quarterly report on Form
10-Q for the quarter ended September 30, 1995.
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Page
(b) Pro Forma Financial Information.
(1) Description of Unaudited Pro Forma
Consolidated Condensed Financial Statements 4
(2) Unaudited Pro Forma Consolidated Condensed
Statement of Income for the nine months ended September 30, 1995 5
3
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Description of Unaudited Pro Forma Consolidated
Condensed Financial Information
This amendment provides the pro forma financial information required pursuant
to Article II of Regulation S-X for the period ending September 30, 1995
which was not included in the Company's Form 8-K Report filed on October 7,
1995 since the results for the period were not determinable at such time.
Unaudited pro forma financial information relating to the acquisition and for
the periods ending December 31, 1994 and March 31, 1995, including pro forma
income statements and a pro forma balance sheet, was filed with the Company's
Form 8-K Report filed on July 10, 1995. The acquisition is reflected in the
Company's balance sheets filed as a part of the Company's quarterly report on
Form 10-Q for the quarter ended September 30, 1995 and a pro forma balance
sheet is not required herein. Such pro forma consolidated financial
information filed on July 10, 1995 was based upon available information and
certain assumptions believed by management to be reasonable, and excluded
nonrecurring costs associated with the acquisition, the amounts of which
could not be determined prior to closing. The results in such previously
filed pro forma consolidated financial information do not vary materially
based on information available as of closing.
The Unaudited Pro Forma Consolidated Condensed Statements of Income filed
herewith for the nine month period ended September 30, 1995 give effect to
the acquisition accounted for under the purchase method of accounting. The
Unaudited Pro Forma Consolidated Condensed Financial Information is based
upon the historical Consolidated Financial Statements of United States
Surgical Corporation and Subsidiaries and the Century Medical, Inc. Surgical
Division under certain assumptions, and include pro forma adjustments as set
forth in the accompanying financial information.
Such Unaudited Pro Forma Consolidated Condensed Statements of Income for the
nine month period ended September 30, 1995 combine the income statements of
the Company for the applicable periods with the income statements of the
acquired business for the nine months ended September 30, 1995.
The pro forma adjustments are based upon available information and certain
assumptions that management believes are reasonable.
The Pro Forma Consolidated Condensed Financial Information may not be
indicative of the results that actually would have occurred if the
combination had been in effect on the dates indicated or that may be obtained
in the future, due to the hypothetical nature of the pro forma information.
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01-Nov-95
UNITED STATES SURGICAL CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
($000's except per share data)
<TABLE>
Operations
Registrant Acquired Pro Forma Pro Forma
9 Months Ended 3 Months Ended Adjustments Quarter Ended
09/30/95 03/31/95 dr(cr) 09/30/95
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $759,000 $30,200 $11,700 (1) $777,500
-------- ------- ------- --------
Costs and Expenses:
Cost of products sold 337,200 16,200 (11,700)(1) 340,200
(1,500)(2)
Research and development 33,000 33,000
SG&A expenses 308,900 9,900 900 (3) 319,700
Interest 15,800 1,300 (4) 17,100
-------- ------- ------- --------
Total costs and expenses 694,900 26,100 (11,000) 710,000
======== ======= ======= ========
Income before income taxes 694,100 4,100 700 67,500
Income taxes 4,700 2,200 (400)(5) 6,500
-------- ------- ------- --------
Net income $59,400 1,900 300 61,000
Preferred stock dividends 14,600 14,600
-------- ------- ------- --------
Net income applicable to
common stock $44,800 $1,900 $300 $46,400
======== ======= ======= ========
Average number of common
shares outstanding 56,900 56,900
-------- ------- ------- --------
Net income per common share $0.79 $0.82
======== ======= ======= ========
</TABLE>
Pro Forma Adjustments
1. To eliminate intercompany sales of products.
2. To eliminate commissions paid by Century Medical to Itochu Corporation
based on sales/purchases of USSC products.
3. To recognize amortization expense over a 10-25 year life related to
approximately $24 million of intangible assets.
4. To recognize imputed interest expense related to 5.1 billion yen note
payable to Century Medical, Inc. discounted at 4%.
5. Income tax benefit relating to additional expense in Japan.
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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 hereunto duly authorized.
UNITED STATES SURGICAL CORPORATION
Date: November 30, 1995 By: /S/ Howard M. Rosenkrantz
Howard M. Rosenkrantz
Senior Vice President, Finance and
Chief Financial Officer
(Principal Financial Officer)
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