1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended
March 30, 1996
Commission File
Number: 1-4105
BAUSCH & LOMB INCORPORATED
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation or organization)
16-0345235
(IRS Employer Identification No.)
One Bausch & Lomb Place, Rochester NY 14604-2701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 338-6000
Indicate by checkmark 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 .
The number of shares of Common stock of the registrant, outstanding
as of March 30, 1996 was 56,752,608, consisting of 55,977,987 shares
of Common stock and 774,621 shares of Class B stock which are
identical with respect to dividend and liquidation rights, and vote
together as a single class for all purposes.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Unaudited consolidated financial statements for the first quarters of 1996
and 1995 of Bausch & Lomb Incorporated and Consolidated Subsidiaries are
presented on the following pages. The audited balance sheet at December
30, 1995 is presented for comparative purposes. Financial statements for
the three months ended March 30, 1996 have been prepared by the Company in
accordance with its usual accounting policies and are based in part on
approximations.
In the opinion of management, all adjustments necessary for a fair
presentation of the consolidated financial statements in accordance with
generally accepted accounting principles have been included. All such
adjustments were of a normal recurring nature.
<TABLE>
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF EARNINGS
Dollar Amounts In Thousands - Except Per Share Data
<CAPTION>
First Quarter Ended
March 30, April 1,
1996 1995
<S> <C> <C>
Net Sales $469,268 $465,601
Costs And Expenses
Cost of products sold 207,889 218,365
Selling, administrative and general 197,322 190,065
Research and development 17,774 14,923
------- -------
422,985 423,353
------- -------
Operating Earnings 46,283 42,248
------- -------
Other (Income) Expense
Investment income (9,714) (9,999)
Interest expense 12,318 12,139
Loss (gain) from foreign currency, net (49) 1,592
------- -------
2,555 3,732
------- -------
Earning Before Income Taxes
And Minority Interest 43,728 38,516
Provision for income taxes 16,529 13,258
------- -------
Earnings Before Minority Interest 27,199 25,258
Minority interest in subsidiaries 4,690 4,974
------- -------
Net Earnings $ 22,509 $ 20,284
Retained Earnings At Beginning
Of Period 900,095 846,245
Cash Dividends Declared:
Common stock, $0.26 per share
in 1996 and $0.245 per share in 1995 14,710 14,257
------- -------
Retained Earnings At End Of Period $907,894 $852,272
======= =======
Net Earnings Per Common Share $ 0.39 $ 0.34
======= =======
Average Common Shares
Outstanding (000s) 57,108 58,861
======= =======
See Notes to Financial Statements
</TABLE>
<TABLE>
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEET
Dollar Amounts In Thousands
<CAPTION>
March 30, December 30,
1996 1995
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 118,389 $ 193,814
Short-term investments,
at cost which approximates market 627 803
Trade receivables, less allowances
of $11,763 and $11,232, respectively 275,424 250,587
Inventories, net 330,924 304,298
Deferred taxes, net 78,117 82,557
Other current assets 122,712 98,288
--------- ---------
926,193 930,347
Property, Plant And Equipment, net 549,989 550,366
Goodwill And Other Intangibles,
less accumulated amortization
of $95,758 and $96,597, respectively 459,909 381,495
Other Investments 558,180 561,232
Other Assets 138,051 126,626
--------- ---------
Total Assets $2,632,322 $2,550,066
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable $ 426,549 $ 284,510
Current portion of long-term debt 44,977 98,990
Accounts payable 64,863 81,927
Accrued compensation 77,421 79,767
Accrued liabilities 275,515 275,936
Federal and foreign income taxes 27,163 38,347
--------- ---------
916,488 859,477
Long-Term Debt, less current portion 225,143 190,974
Other Long-Term Liabilities 139,840 139,925
Minority Interest 431,262 430,390
--------- ---------
Total Liabilities 1,712,733 1,620,766
--------- ---------
Shareholders' Equity
4% Cumulative Preferred stock,
par value $100 per share - -
Class A Preferred stock, par
value $1 per share - -
Common stock, par value $0.40
per share, 60,198,322 shares issued 24,079 24,079
Class B stock, par value $0.08 per share,
1,149,406 and 1,268,578 shares
issued, respectively 92 101
Capital in excess of par value 95,829 107,788
Cumulative translation adjustment 84,121 85,122
Retained earnings 907,894 900,095
--------- ---------
1,112,015 1,117,185
Common and Class B stock
in treasury, at cost, 4,595,120 and
4,525,844 shares, respectively (182,270) (178,730)
Unearned compensation (6,156) (9,155)
Unrealized holding loss on other investments (4,000) -
--------- ---------
Total Shareholders' Equity 919,589 929,300
--------- ---------
Total Liabilities And Shareholders' Equity $2,632,322 $2,550,066
========= =========
See Notes To Financial Statements
</TABLE>
<TABLE>
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF CASH FLOWS
Dollar Amounts In Thousands
<CAPTION
Three Months Ended
March 30, April 1,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $22,509 $ 20,284
Adjustments to reconcile net
earnings to net cash (used in)
provided by operating activities:
Depreciation of property, plant and equipment 23,075 22,010
Amortization of goodwill and other intangibles 5,079 4,031
Decrease/(increase) in deferred income taxes 4,590 (760)
Loss on retirement of fixed assets 1,535 155
Exchange loss/(gain) 1,382 (1,085)
Increase in minority interest 1,434 686
(Increase)/decrease in accounts receivable (21,837) 4,174
Increase in inventories (20,685) (16,195)
(Increase)/decrease in other current assets (23,745) 3,617
(Decrease)/increase in accounts payable
and accruals (22,093) 12,585
(Decrease)/increase in taxes payable (10,495) 6,278
Decrease in other long-term liabilities (7,152) (12,573)
-------- --------
Net cash by (used in) provided by
operating activities (46,403) 43,207
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for purchases of property, plant
and equipment (25,588) (14,678)
Acquisition of businesses, net of cash
and short-term investments acquired (80,221) -
Other (14,977) 5,877
-------- --------
Net cash used in investing activities (120,786) (8,801)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchases of Common shares (9,858) (34,858)
Exercise of stock options 1,050 1,267
Net proceeds from issuance of notes payable 142,413 44,487
Proceeds from issuance of long-term debt 34,270 -
Repayment of long-term debt (51,166) (3,483)
Payment of dividends (14,797) (14,505)
Other (7,701) -
-------- --------
Net cash provided by (used in)
financing activities 94,211 (7,092)
-------- --------
Effect of exchange rate changes on cash,
cash equivalents and short-term investments (2,623) 13,150
-------- --------
Net (decrease) increase in cash, cash
equivalents and short-term investments (75,601) 40,464
Cash, cash equivalents and short-term investments,
beginning of period 194,617 232,542
-------- --------
Cash, cash equivalents and short-term investments,
end of period $119,016 $273,006
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 16,639 $ 15,464
Income taxes $ 24,516 $ 8,782
See Notes To Financial Statements
</TABLE>
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE A: Earnings Per Share
Net earnings per Common share are based on the weighted average
number of Common and Class B shares outstanding during the period,
adjusted for the assumed conversion of dilutive stock options. In
computing the per share effect of assumed conversion, funds which
would have been received from the exercise of options are
considered to have been used to purchase Common shares at current
market prices, and the resulting net additional Common shares are
included in the calculation of average Common shares outstanding.
The number of Common shares used to calculate net earnings per
Common share were 57,108,000 at March 30, 1996 and 58,861,000
shares at April 1, 1995.
See Exhibit 11 filed as a part of this Report for details
regarding the computation of earnings per share.
NOTE B: Inventories
Inventories consisted of the following:
<TABLE>
(Dollar Amounts In Thousands)
<CAPTION>
March 30, December 30,
1996 1995
<S> <C> <C>
Raw materials and supplies $ 94,249 $ 76,834
Work in process 18,119 21,905
Finished products 227,739 214,901
------- -------
340,107 313,640
Less: Allowance for valuation of
certain U.S. inventories
at last-in, first-out cost 9,183 9,342
------- -------
$330,924 $304,298
======= =======
</TABLE>
NOTE C: Property, Plant And Equipment
Major classes of property, plant and equipment consisted of the
following:
<TABLE>
(Dollar Amounts In Thousands)
<CAPTION>
March 30, December 30,
1996 1995
<S> <C> <C>
Land $ 21,833 $ 22,124
Leasehold improvements 33,571 33,720
Buildings 390,489 396,954
Machinery and equipment 653,666 629,952
--------- ---------
1,099,559 1,082,750
Less: Accumulated depreciation 549,570 532,384
--------- ---------
$ 549,989 $ 550,366
========= =========
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
This financial review, which should be read in conjunction with the
accompanying financial statements, contains management's discussion and
analysis of the Company's results of operations, liquidity and progress
toward stated financial objectives. Bausch & Lomb strives to maximize
total return to shareholders through a combination of long-term growth in
share price and the payment of cash dividends. The Company systematically
measures its financial progress against the Standard & Poors Healthcare
Composite Group, with the goal of placing Bausch & Lomb among the top
performers for each of its selected financial objectives. To achieve this
goal, the Company has established multi-year objectives of compound annual
sales and earnings growth in the range of 10% and, on a longer term basis,
a return on equity of approximately 20%. The Company also emphasizes the
need for operational stability, predictability and profitability. The
Company's management team is firmly committed to achieving these
performance objectives on a going-forward basis.
RESULTS OF OPERATIONS
As announced on May 1, 1995, the Company completed the sale of its Sports
Optics Division, which marketed binoculars, riflescopes and telescopes.
1995 first quarter amounts included the results of operations of this
business which contributed approximately $18 million in optics segment
revenues and generated an operating loss of approximately $1 million.
Net Sales By Business Segment
Bausch & Lomb's results are reported in two business segments. The
healthcare segment includes personal health, medical and biomedical
products. In the personal health sector, major lines include contact lens
care products, eye care solutions, over-the-counter medications, skin care
products and oral care products. Medical products include contact lenses
and lens materials, prescription pharmaceuticals, hearing aids and dental
implants. Biomedical products include purpose-bred laboratory animals for
biomedical research, specific pathogen-free eggs for vaccine production and
a variety of biotechnical and professional services provided to the
scientific research community. Bausch & Lomb's optics segment includes
sunglasses and optical thin film coating services and products. Optics
segment results for 1995 also included the Company's Sports Optics
Division.
Consolidated revenues for the quarter ended March 30, 1996 were $469
million, an increase of approximately $4 million or 1% over the 1995 first
quarter. When results for the divested Sports Optics Division are excluded
from 1995 results, sales improved $22 million or 5%. The following is a
summary of sales by business segment:
<TABLE>
Net Sales By Business Segment
(Dollar Amounts in Millions)
<CAPTION>
First Quarter
1996 1995
<S> <C> <C>
Healthcare $333.9 $316.2
Optics 135.4 149.4
----- -----
Net Sales $469.3 $465.6
===== =====
</TABLE>
Healthcare Segment Revenues
Revenues in the healthcare segment increased $18 million or 6% over the
1995 first quarter. Major product sector revenues as a percentage of total
healthcare segment sales are presented below:
<TABLE>
Healthcare Segment Sales By Product Sector
<CAPTION>
First Quarter
1996 1995
<S> <C> <C>
Personal Health 49% 50%
Medical 37% 35%
Biomedical 14% 15%
</TABLE>
Within the personal health sector, 1996 first quarter revenues
improved 2% from the comparable 1995 level. The overall 4% improvement for
lens care products reflected continued strong demand for the Company's lens
care solutions products, including the ReNu(R), Boston(R) and Bausch &
Lomb(R) lines. In the important U.S. market, lens care solutions sales
were up modestly from the prior year. Sales gains were also achieved by
the Company's lines of skin care products in the U.S. and over-the-counter
medications in Europe. Revenues for eyecare products in the U.S. were
below the prior year when incremental sales related to the introduction of
Opcon-A(R), an antihistamine/decongestant, were recorded. Revenues for
consumer oral care products declined from 1995 as weak sell through of
Interplak(R) power toothbrushes during the 1995 holiday season in the U.S.
constrained first quarter results.
Medical sector sales increased 13% from 1995 levels. Worldwide
contact lens revenues advanced 15%, led by significant gains for planned
replacement contact lens products, most notably in the U.S., Europe and
Asia. The continued shift in market demand toward planned replacement
lenses led to a moderate decline in sales of traditional contact lenses,
primarily in Asia and Latin America. Worldwide ophthalmic pharmaceutical
revenues improved almost 10%. Within the U.S., gains were largely
attributable to the success of recently introduced products, including
Crolom(R), which is indicated for seasonal allergic eye conditions.
Revenues in Europe also increased reflecting shipments of glaucoma and anti-
infective products. Medical sector sales also benefited from increased
demand for dental implant products and hearing aids.
A modest improvement in revenues for the Company's biomedical sector
reflected increased pricing for research animals and higher shipments of
specific pathogen-free eggs and toxicology testing products in the period.
Optics Segment Revenues
Total revenues in the optics segment declined 9% to $135 million, compared
to $149 million in 1995. When results for the divested sports optics
business are excluded from the comparison, optics segment revenues improved
3% from the prior year. Revenues for sunglass products advanced
approximately 10% in Europe and Asia. In the U.S. sales improvement
included incremental 1996 revenues from the first quarter acquisition of
the Arnette(R) sunglass line with products directed toward the important
sport channel of trade. Shipments of Revo sunglasses improved strongly
from the level of a year ago. Overall sales declined in markets in Latin
America. An important measure for success in the sunglass business is the
sale of new products, which accounted for more than 30% of revenues in the
U.S. and other regions in the first quarter of 1996. Revenues for thin
film coating products and services decreased significantly based on
increased competition for core products from manufacturers outside the
United States.
Net Sales By Geographic Region
The following analysis of trends excludes 1995 revenues from the sports
optics business.
Sales in markets outside the U.S. totaled $228 million, an increase of
$14 million or 7% from the 1995 first quarter. Changes in currency
exchange rates weakened sales comparisons to 1995 by $4 million or 1%. In
total, non-U.S. sales represented 49% of consolidated revenues, compared to
48% in the 1995 first quarter. European revenues increased 9%, reflecting
improved demand for the Company's over-the-counter medications, lens care
solutions, prescription pharmaceuticals, planned replacement lenses and
sunglasses. Sales in Asia advanced 6%, attributable to increased sales of
contact lenses and sunglasses. Revenues declined 20% in Latin America as
economic issues constrained sales of sunglass products.
U.S. sales totaled $241 million in the first quarter, a gain of $7
million or 3% from 1995. The improvement was primarily due to growth for
planned replacement lens and pharmaceutical products, and incremental sales
from the acquisition of the Arnette(R) sunglass lines.
Costs And Expenses
The ratio of cost of products sold to sales was 44% for the 1996 first
quarter versus 47% for the comparable 1995 period. The improvement was
primarily attributable to the significant profitability gains for all
classes of contact lens products.
Selling, administrative and general expenses were 42% of sales in the
first quarter of 1996 compared to 41% in 1995. The increase reflects
promotional support for core products including contact lens, lens care and
sunglass products and the incremental investment to maintain or increase
share for lens care products in the important U.S. market. Corporate
administration expense was 2.8% of sales in the first quarter of 1996
versus 2.4% in 1995. Research and development expense for the first three
months of 1996 increased 19% from 1995 levels. Higher spending was in
support of new contact lens, lens care and pharmaceutical products.
Restructuring Reserves
In the fourth quarter of 1995, the Company's Board of Directors approved
plans to restructure portions of the sunglass, biomedical and contact lens
operations, as well as certain corporate administrative functions, and a
pre-tax restructuring charge of $27 million was recorded.
The following table sets forth the activity in the restructuring
reserve through March 30, 1996:
<TABLE>
Dollar Amounts In Millions
<CAPTION>
Contact Corporate
Sunglass Biomedical Lens Administration Total
<S> <C> <C> <C> <C> <C>
Total 1995 restructur-
ing provisions $15.8 $4.8 $3.1 $3.0 $26.7
Less charges
against reserve:
Non-cash items 3.4 2.2 3.1 1.0 9.7
Cash payments 0.5 0.3 - 0.1 0.9
---- --- --- --- ----
Balance at
March 30, 1996 $11.9 $2.3 $ - $1.9 $16.1
==== === === === ====
</TABLE>
Business Segment And Operating Earnings
Business segment earnings of $59 million for the first quarter of 1996
increased $6 million or 11% compared to the 1995 first quarter. When
results for the sports optics business are excluded from the comparison,
business segment earnings increased 9%. The return to profitability for
contact lens products contributed significantly to the overall improvement.
Operating earnings totaled $46 million, a gain of $4 million or 10% from
the prior year period.
Other Income And Expenses
Income from investments for the first quarters of 1996 and 1995 totaled
approximately $10 million. Interest expense of $12 million for the 1996
first quarter was essentially flat with the first quarter of 1995.
Overall, the impact of lower interest rates was more than offset by the
increase in the total debt.
The Company realized a slight foreign currency gain in the first
quarter of 1996, representing an improvement of $2 million from 1995. This
was based primarily on favorable results from hedging activities.
The Company provided for income taxes at rates of 37.8% and 34.4% for
the first quarters of 1996 and 1995, respectively. The higher rate in 1996
reflected shifts in the geographic mix of earnings.
Liquidity And Financial Resources
Cash Flows Provided By Operating Activities
Net earnings adjusted for depreciation, amortization and deferred
taxes, increased 21% from 1995. However, cash flows used in operating
activities totaled $46 million in the first quarter of 1996, compared to a
positive $43 million provided by operations in the prior year period. This
change was primarily attributable to a build in inventories to support new
product introductions in 1996, the timing of tax payments, cash paid for
the net settlement of foreign currency hedge contracts and the comparison
against the significant reductions in trade receivables achieved in the
1995 first quarter.
Cash Flows Used In Investing Activities
Cash flows used in investing activities increased $112 million from
1995 to $120 million. Purchases of property, plant and equipment totaled
$26 million, $11 million higher than the 1995 first quarter. Increased
capital spending in the current year has been primarily in support of the
development of new planned replacement contact lens technology and enhanced
sunglass manufacturing capacity. Capital expenditures are expected to
total approximately $130 million in 1996. Other investing activities in
the first quarter of 1996 included the acquisitions of Arnet Optic
Illusions, a U.S.-based company marketing sunglasses to the sport market,
and Award plc, manufacturer of a high water daily disposable lens based in
Scotland.
Cash Flows Used In Financing Activities
Approximately $94 million in cash was provided by financing activities
in the 1996 first quarter, mainly through the issuance of U.S. short-term
debt. Repurchases of the Company's Common shares have totaled $10 million
in 1996 compared to $35 million in 1995. The higher level of repurchases
in 1995 was in consideration of the expected cash proceeds to be received
from the sale of the Sports Optics Division.
Free Cash Flow
Management continues to emphasize the generation of cash flow and
management of its working capital requirements. The Company's goal is to
maximize free cash flow which is defined as cash generated before financing
activities and the acquisition and divestiture of businesses.
Free cash flow for the three months ended March 30, 1996 totaled a
negative $90 million. For the three months ended April 1, 1995 free cash
flow totaled a positive $48 million. The change from the prior year is
primarily attributable to the operating cash flow factors described
earlier.
Financial Position
The Company's total debt, consisting of short- and long-term
borrowings, increased by $122 million from year-end 1995 to $697 million at
the end of the 1996 first quarter. Borrowings have been used to finance
acquisitions and repurchase shares of Common stock. Bausch & Lomb's ratio
of total debt to equity stood at 76% in the first quarter of 1996 compared
to 69% in the first quarter of 1995. Cash and investments totaled $119 and
$273 million at the end of the first quarters of 1996 and 1995,
respectively. This change primarily reflects the 1995 fourth quarter
investment by the Company's subsidiary, Bausch & Lomb Ireland, in
approximately $136 million in securities issued by a subsidiary of a triple-
A rated financial institution. This investment has been reported with
Other Investments on the balance sheet.
Access to Financial Markets
The Company maintains U.S. revolving credit agreements, typically with
364-day credit terms, totaling $290 million. The interest rate under the
agreements is at the prime rate, or, at the Company's option, at a mutually
acceptable market rate. No debt was outstanding under these agreements at
March 30, 1996 nor were there any borrowings outstanding under the
Company's $300 million medium-term note program. In addition, the Company
maintains bank lines of credit for its financing requirements. The
availability of adequate credit facilities provides the Company with a high
degree of flexibility to meet its obligations, fund capital expenditures
and invest in growth opportunities.
Working Capital
Working capital amounted to $10 million at the end of the first quarter
of 1996, versus $71 million at year-end 1995 and $223 million at March
1995. The significant decrease from the first quarter of the prior year
primarily reflects the $136 million investment described earlier. The
current ratio was 1.0 at March 30, 1996, 1.1 at December 30, 1995 and 1.3
at April 1, 1995.
OTHER FINANCIAL DATA
Dividends declared on Common stock were $0.26 per share in the first
quarter of 1996 and $0.245 per share in the first quarter of 1995. As a
result of the restructuring charge recorded in 1995, the return on average
shareholders' equity for the twelve-month period ended March 30, 1996 was
12%. This return was 2% for the twelve-month period ended April 1, 1995.
Excluding 1994 goodwill impairment and 1995 restructuring charges, the
return on average shareholders' equity would have been 12% for the 1996
period versus 9% in 1995.
OUTLOOK
Worldwide sales for many of the Company's products are expected to
continue to develop at a good rate for the remainder of 1996. However,
anticipated sales growth is dependent on the success of several scheduled
new product introductions, with particular emphasis in the contact lens and
sunglass businesses. The acquisitions of Arnet Optic Illusions, Inc. and
Award plc also should impact favorably on results. The Arnette(R) line,
with its distinctive high-performance designs, enhances the Company's
position in the sport market through its strong position in niches such as
surfing, snowboarding, skateboarding and mountain biking. Award is a
manufacturer of a high water daily disposable lens using a patented cast
mold manufacturing technology and highly efficient distribution process.
This acquisition should enhance the Company's competitive position in
Europe. The Company is also pursuing approval to market this lens in other
key global markets.
Earnings performance is projected to benefit from the progress of
announced efforts to reduce annualized costs by $50 million by 1998.
Actions will primarily include a reduction in corporate administration
costs, principally headcount, and the consolidation of administrative
functions around the world. The cost of severance and asset write-offs for
projects which had been approved by management prior to year end were
reflected in the 1995 restructuring reserve. Additional expenses for these
projects and new actions are expected to be incurred in 1996.
In addition, the Company regularly reevaluates its existing portfolio
of businesses and pursues opportunities to maximize shareholder return.
This led to the sale of the Sports Optics Division in 1995 and the
announcement in 1996 that the Company would explore the sale of its Oral
Care Division which markets the Interplak(R) line of products.
OTHER INFORMATION
The statements in this financial review which are not historical facts are
forward looking statements that involve risks and uncertainties. This
includes but is not limited to risks associated with product demand and
consumer acceptance; the development of new manufacturing technologies
including initiatives in the contact lens and sunglass businesses; the
effect of economic conditions and changes in interest and exchange rates;
the impact of competitive products and pricing, product development and
regulatory approval risks, particularly for personal health and medical
sector products; capacity, distribution and supply constraints or
difficulties; the results of financing efforts; the effect of the Company's
accounting policies and other risks detailed in this report and other
public filings.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In the Company's Annual Report for 1995 on Form 10-K, it discussed an
action pending in the United States District Court for the Northern
District of Alabama on behalf of a nationwide class pursuing claims
relating to the Company's marketing and sale of the Optima FW(R),
Medalist(R) and SeeQuence2(R) contact lens systems and other related
proceedings. On May 2, 1996, the Company was served with a Statement of
Claim filed in Ontario, Canada, naming the Company and Bausch & Lomb
Canada. The plaintiff seeks to represent a class of similarly situated
Canadian consumers.
Item 6. Exhibits and Reports on Form 8-K.
(a) Item 601 Exhibits
Those exhibits required to be filed by Item 601 of Regulation
S-K are listed in the Exhibit Index immediately preceding the
exhibits filed herewith and such listing is incorporated herein
by reference.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
for which this Report is filed.
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.
BAUSCH & LOMB INCORPORATED
Date: May 14, 1996 By:
(STEPHEN A. HELLRUNG)
Stephen A. Hellrung
Senior Vice President,
Secretary and General Counsel
Date: May 14, 1996 By:
(STEPHEN C. MCCLUSKI)
Stephen C. McCluski
Senior Vice President,
Finance
EXHIBIT INDEX
S-K Item 601 No. Document
(4)-a Certificate of Incorporation of Bausch
& Lomb Incorporated (filed as Exhibit (4)-a to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 29, 1985, File
No. 1-4105, and incorporated herein by
reference).
(4)-b Certificate of Amendment of Bausch &
Lomb Incorporated (filed as Exhibit (4)-b to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988, File
No. 1-4105, and incorporated herein by
reference).
(4)-c Certificate of Amendment of Bausch &
Lomb Incorporated (filed as Exhibit (4)-c to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 26, 1992, File
No. 1-4105, and incorporated herein by
reference).
(4)-d Form of Indenture, dated as of
September 1, 1991, between the Company and
Citibank, N.A., as Trustee, with respect to the
Company's Medium-Term Notes (filed as Exhibit
(4)-a to the Company's Registration Statement
on Form S-3, File No. 33-42858, and
incorporated herein by reference).
(4)-e Rights Agreement between the Company
and The First National Bank of Boston, as
successor to Chase Lincoln First Bank, N.A.
(filed as Exhibit 1 to the Company's Current
Report on Form 8-K dated July 25, 1988, File
No. 1-4105, and incorporated herein by
reference).
(4)-f Amendment to the Rights Agreement
between the Company and The First National Bank
of Boston, as successor to Chase Lincoln First
Bank, N.A. (filed as Exhibit 1 to the Company's
Current Report on Form 8-K dated July 31, 1990,
File No. 1-4105, and incorporated herein by
reference).
(11) Statement Regarding Computation of Per
Share Earnings (filed herewith).
(12) Statement Regarding Computation of
Ratio of Earnings to Fixed Charges (filed
herewith).
(27) Financial Data Schedule
E - 1
<TABLE>
Exhibit 11
Statement Regarding Computation of Per Share Earnings
Dollars And Shares In Thousands-Except Per Share Data
<CAPTION>
THREE MONTHS ENDED
March 30, April 1,
1996 1995
<S> <C> <C>
Net earnings $22,509 $20,284
====== ======
Actual outstanding common shares
at beginning of year 56,941 58,992
Average common shares issued for
stock options and effects of
assumed exercise of common
stock equivalents and
repurchase of common shares 167 (131)
------ ------
Average common shares outstanding 57,108 58,861
====== ======
Net earnings per common and
common share equivalent $ 0.39 $ 0.34
====== ======
E - 2
</TABLE>
<TABLE>
Exhibit 12
Statement Regarding Computation of Ratio of Earnings to
Fixed Charges
<CAPTION>
Dollar Amounts In Thousands
March 30, December 30,
1996 1995
<S> <C> <C>
Earnings before provision for
income taxes and minority
interest $43,728 $211,847
Fixed charges 12,723 47,584
Capitalized interest, net of
current period amortization 80 (260)
------ -------
Total earnings as adjusted $56,531 $259,691
====== =======
Fixed charges:
Interest (including
interest expense and
capitalized interest) $12,318 $ 45,765
Portion of rents
representative of the
interest factor 405 1,819
------ -------
Total fixed charges $12,723 $ 47,584
====== =======
Ratio of earnings to fixed
charges 4.44 5.46<FN>1
====== =======
<FN>1
Excluding the effects of the gain on sale of Sports
Optics Division and restructuring changes recorded in
1995, the ratio of earnings to fixed charges at
December 30, 1995 would have been 5.26.
</FN>
</TABLE>
E - 3
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-28-1996 DEC-30-1995
<PERIOD-END> MAR-30-1996 APR-01-1995
<CASH> 118,389 270,731
<SECURITIES> 627 2,275
<RECEIVABLES> 287,187 289,294
<ALLOWANCES> 11,763 17,302
<INVENTORY> 330,924 334,842
<CURRENT-ASSETS> 926,193 1,032,376
<PP&E> 1,099,559 1,033,138
<DEPRECIATION> (549,570) (489,148)
<TOTAL-ASSETS> 2,632,322 2,532,083
<CURRENT-LIABILITIES> 916,488 809,498
<BONDS> 225,143 232,525
<COMMON> 24,171 24,176
0 0
0 0
<OTHER-SE> 895,418 899,478
<TOTAL-LIABILITY-AND-EQUITY> 2,632,322 2,532,083
<SALES> 469,268 465,601
<TOTAL-REVENUES> 469,268 465,601
<CGS> 207,889 218,365
<TOTAL-COSTS> 207,889 218,365
<OTHER-EXPENSES> 215,096 204,988
<LOSS-PROVISION> 1,719 2,644
<INTEREST-EXPENSE> 12,318 12,139
<INCOME-PRETAX> 43,728<F1> <F1>38,516
<INCOME-TAX> 16,529 13,258
<INCOME-CONTINUING> 22,509 20,284
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 22,509 20,284
<EPS-PRIMARY> 0.39 0.34
<EPS-DILUTED> 0.39 0.34
<FN>
<F1>Income Before Taxes and Minority Interest
</FN>
</TABLE>
