SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended
September 25, 1993
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 .
As of September 25, 1993 there were outstanding
59,067,678 shares of Common Stock, consisting of
58,576,833 shares of Common Stock and 490,845 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.
As described more fully in Note A to the Financial Statements,
1993 financial information in this filing has been restated to
correct the improper recording of certain sunglass distributor
sales in Southeast Asia.
Unaudited consolidated financial statements for the third quarter
of 1993 and 1992 of Bausch & Lomb Incorporated and Consolidated
Subsidiaries are presented on the following pages. The audited
balance sheet at December 26, 1992 is presented for comparative
purposes. Financial statements for the nine months ended
September 25, 1993 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>
Third Quarter Ended Nine Months Ended
-----------------------------------------------------
Sept. 25, Sept. 26, Sept. 25, Sept. 26,
1993* 1992 1993* 1992
------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $490,136 $461,310 $1,377,170 $1,280,678
Costs And Expenses:
Cost of products sold 216,652 211,491 614,267 586,004
Selling, administrative
and general 174,746 157,186 507,357 458,629
Research and development 14,495 13,934 43,178 38,737
Investment income (1,764) (1,915) (9,476) (9,709)
Interest expense 7,446 6,200 24,960 22,586
Gain from foreign
currency (2,051) (2,016) (10,043) (3,822)
-------- -------- ---------- ----------
409,524 384,880 1,170,243 1,092,425
-------- -------- ---------- ----------
Earnings Before
Income Taxes And
Minority Interest 80,612 76,430 206,927 188,253
Provision for
income taxes 27,595 25,222 71,731 64,593
-------- -------- ---------- ----------
Earnings Before Minority
Interest 53,017 51,208 135,196 123,660
Minority interest in
subsidiaries 995 1,247 3,295 3,976
-------- -------- ---------- ----------
Net Earnings $ 52,022 $ 49,961 $ 131,901 $ 119,684
-------- -------- ---------- ----------
Retained Earnings At
Beginning Of Period $838,758 $707,121 $ 785,044 $ 661,182
Cash Dividends Declared:
Common stock, $0.22 and
$0.66 per share for 1993
($0.20 and $0.60 per
share for 1992) 13,089 11,892 39,254 35,676
-------- -------- ---------- ----------
Retained Earnings
At End Of Period $877,691 $745,190 $ 877,691 $745,190
-------- -------- ---------- ----------
-------- -------- ---------- ----------
Net earnings per
Common Share $ 0.87 $ 0.83 $ 2.19 $ 1.98
-------- -------- ---------- ----------
-------- -------- ---------- ----------
Average Common Shares
Outstanding (000s) 60,151 60,381
---------- ----------
---------- ----------
<FN>
*Results have been restated as more fully described in Note A --
"Restatement of Financial Information."
See Notes To Financial Statements
</TABLE>
<TABLE>
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEET
Dollar Amounts In Thousands
<CAPTION>
September 25, December 26,
1993* 1992
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 128,336 $ 381,364
Short-term investments,
at cost which
approximates market 41,463 35,409
Trade receivables,
less allowances
of $15,445 and
$11,834, respectively 354,321 277,338
Inventories 316,114 279,825
Deferred income taxes,
less valuation
allowance of $10,977 34,189 30,327
Other current assets 111,348 77,452
--------- ----------
985,771 1,081,715
Property, Plant And
Equipment, net 527,514 503,922
Goodwill And Other Intangibles,
less accumulated amortization
of $116,173 and $107,516,
respectively 454,497 217,791
Other Assets 95,302 70,261
--------- ----------
Total Assets $2,063,084 $1,873,689
--------- ----------
--------- ----------
Liabilities and Shareholders' Equity
Current Liabilities:
Notes payable $ 208,256 $ 198,197
Current portion of
long-term debt 21,779 10,657
Accounts payable 69,374 72,434
Accrued compensation 75,238 60,057
Accrued liabilities 235,242 188,353
Federal and foreign
Income taxes 56,054 37,100
--------- ----------
665,943 566,798
Long-Term Debt, less
current portion 326,453 277,740
Other Long-Term Liabilities 115,303 110,852
Minority Interest 20,495 20,115
--------- ----------
Total Liabilities 1,128,194 975,505
--------- ----------
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,
902,602 shares issued.
(888,167 shares in 1992) 72 71
Capital in excess of
par value 87,757 89,088
Cumulative translation
adjustment 29,393 63,465
Retained earnings 877,691 785,044
--------- ----------
1,018,992 961,747
Common and Class B Stock
in treasury, at cost,
2,033,246 shares
1,642,622 shares
in 1992) (84,102) (63,563)
--------- ----------
Total Shareholders' Equity 934,890 898,184
--------- ----------
Total Liabilities And
Shareholders' Equity $2,063,084 $1,873,689
--------- ----------
--------- ----------
<FN>
*Results have been restated as more fully described in Note A --
"Restatement of Financial Information."
See Notes To Financial Statements
</TABLE>
<TABLE>
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF CASH FLOWS
Dollar Amounts In Thousands
<CAPTION>
Nine Months Ended
September 25, September 26,
1993* 1992
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $131,901 $119,684
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation of property, plant, and equipment 53,666 49,032
Amortization of goodwill and other intangibles 8,657 6,598
Loss on retirement of fixed assets 2,155 1,233
Exchange (gain) loss (1,168) 7,819
(Increase) decrease in deferred income taxes (2,402) 3,680
Increase in accounts receivable (69,509) (66,972)
(Increase) decrease in inventories (31,652) 5,622
Increase in other current assets (44,173) (16,652)
Increase in accounts payable and accruals 24,290 12,608
Increase in tax reserves 18,977 12,158
Increase in undistributed earnings of subsidiaries 905 2,498
Increase in other long-term liabilities 2,501 2,985
------- --------
Net cash provided by operating activities 94,148 140,293
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property, plant
and equipment (67,749) (78,259)
Acquisition of businesses, net of cash
and short-term investments acquired (244,197) -
Other (7,411) (22,011)
------- --------
Net cash used in investing activities (319,357) (100,270)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of Common shares (25,426) (28,680)
Exercise of stock options 3,385 9,692
Restricted stock awards 172 2,981
Net (repayment of) proceeds from issuance of debt 59,335 (226,850)
Payment of dividends (38,046) (34,547)
------- --------
Net cash used in financing activities (580) (277,404)
Effect of exchange rate changes on cash,
cash equivalents and short-term investments (21,185) (9,473)
------- --------
Net decrease in cash, cash equivalents and
short-term investments (246,974) (246,854)
Cash, cash equivalents and short-term investments,
beginning of period 416,773 411,744
------- --------
Cash, cash equivalents and short-term investments,
end of period $169,799 $164,890
------- --------
------- --------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 25,230 $ 18,867
Income taxes $ 37,766 $ 51,120
<FN>
*Results have been restated as more fully described in Note A --
"Restatement of Financial Information."
See Notes To Financial Statements
</TABLE>
BAUSCH & LOMB INCORPORATED AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE A: Restatement of Financial Information
The Company has restated its financial statements for the third
quarter and nine months ended September 25, 1993. This action
was taken as a result of an ongoing investigation surrounding
the improper recording of 1993 sunglass sales in Southeast Asia.
The investigation disclosed that in certain instances distributor
transactions recorded as revenues in 1993 had not actually resulted
from a sale to those customers, and thus were improperly recorded.
The 1993 financial statements have been restated to reverse the
improperly recorded sales. In the opinion of management, all materials
adjustments necessary to correct the financial statements
have been recorded. The impact of these adjustments on the
Company's financial results as originally reported is summarized below:
<TABLE>
Dollar Amounts In Thousands -
Except Per Share Data
<CAPTION>
Third Quarter Ended Nine Months Ended
-----------------------------------------------------
September 25, 1993 September 25, 1993
----------------------------------------------------
As Reported As Restated As Reported As Restated
----------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales:
Healthcare $325,249 $325,249 $ $854,806 $ 854,806
Optics 173,562 164,887 531,039 522,364
----------------------------------------------------
Total $498,811 $490,136 $1,385,845 $1,377,170
Business Segment
Earnings $100,600 $ 96,132 $ 251,964 $ 247,496
----------------------------------------------------
----------------------------------------------------
Net Earnings $ 55,753 $ 52,022 $ 135,632 $ 131,901
-----------------------------------------------------
-----------------------------------------------------
Net Earnings
Per Share $0.93 $0.87 $2.25 $2.19
------------------------------------------------------
------------------------------------------------------
Retained Earnings
at end of
Period $881,422 $877,691 $ 881,422 $ 877,691
------------------------------------------------------
------------------------------------------------------
</TABLE>
NOTE B: Earnings Per Share
Net earnings per common and common equivalent share are based
on the weighted average number of Common and Class B Shares
outstanding, adjusted for the assumed conversion of dilutive
stock options outstanding during the period.
It has been assumed that funds obtained from the exercise of
stock options have been used to purchase Common Shares at
current market prices, and the related net additional Common
Shares have been included in the calculation of average
common and common equivalent shares outstanding.
The number of Common Shares used to calculate net earnings
per common and common equivalent shares were 60,151,061 at
September 25, 1993 and 60,381,153 at September 26, 1992.
See Exhibit 11 filed as a part of this Report for details
regarding the computation of earnings per share.
NOTE C: Inventories
Inventories at September 25, 1993 and at December 26, 1992
were as follows:
<TABLE>
(Dollar Amounts In Thousands)
<CAPTION>
September 25, December 26,
1993 1992
<S> <C> <C>
Raw materials and supplies $ 69,061 $ 60,851
Work in process 23,570 25,245
Finished products 231,970 202,066
-------- ---------
324,601 288,162
Less - Reserve for valuation of
domestic inventories at
last-in, first-out cost 8,487 8,337
-------- ---------
$316,114 $279,825
-------- ---------
-------- ---------
</TABLE>
NOTE D: Property, Plant And Equipment
Major classes of property, plant and equipment are summarized
below:
<TABLE>
(Dollar Amounts In Thousands)
<CAPTION>
September 25, December 26,
1993 1992
<S> <C> <C>
Land $ 21,105 $ 22,368
Leasehold improvements 24,896 21,520
Buildings 354,762 336,166
Machinery and equipment 522,248 473,031
-------- ---------
923,011 853,085
Less - Accumulated
depreciation 395,497 349,163
-------- ---------
$527,514 $503,922
-------- ---------
-------- ---------
</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 operational results for the
third quarter and the first nine months of 1993 and its financial
condition at September 25, 1993. The focus of this review is on the
underlying business reasons for significant changes and trends
affecting sales, operating earnings and financial condition. As
more fully described in Note A - "Restatement of Financial
Information", 1993 amounts have been restated to correct the
improper recording of certain sunglass distributor sales in
Southeast Asia. The discussion which follows is based on the
restated financial information.
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 solutions used for the care of contact lenses and for the
relief of eye irritation, contact lens accessories, certain over-the-
counter pharmaceutical products, skin care products, the Interplak
and Interjet lines of plaque removal devices and other 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 and a variety of biotechnical and
professional services provided to the scientific research community.
Bausch & Lomb's optics segment includes sunglasses, binoculars,
riflescopes, telescopes and optical thin film coating services and
products.
RESULTS OF OPERATIONS
Net Sales
Consolidated revenues for the third quarter ended September 25,
1993 were $490.1 million, an increase of $28.8 million or 6% over the
1992 third quarter. For the first nine months of 1993, net sales of
$1,377.2 million advanced $96.5 million or 8% over the comparable
1992 period. The following is a summary of net sales by industry
segment:
<TABLE>
Net Sales By Business Segment
(Dollar Amounts In Thousands)
<CAPTION>
Third Quarter Nine Months
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Healthcare $325,249 $271,322 $ 854,806 $ 755,810
Optics 164,887 189,988 522,364 524,868
-------- -------- ---------- -----------
Net Sales $490,136 $461,310 $1,377,170 $1,280,678
-------- -------- ---------- -----------
-------- -------- ---------- -----------
</TABLE>
Healthcare Segment Revenues
Revenues in the healthcare segment increased $53.9 million or 20%
over the 1992 third quarter. For the nine-month period, healthcare
segment revenues advanced $99.0 million or 13% over the comparable
1992 period. Major product sector revenues as a percentage of total
healthcare segment sales follow:
<TABLE>
Healthcare Segment Net Sales By Product Sector
<CAPTION>
Third Quarter Nine Months
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Personal Health 53% 53% 52% 51%
Medical 34% 33% 33% 33%
Biomedical 13% 14% 15% 16%
</TABLE>
The improvement in revenues in the personal health sector
reflected strong worldwide demand for the company's contact lens care
products. Lens care revenues in the third quarter advanced 8% over
1992, with the majority of the growth attributable to the success of
ReNu multi-purpose solution. Solid gains were also achieved in the
Boston line of rigid gas permeable lens solutions. Worldwide oral
care revenues advanced 33% over the prior year period. 1992 results
were constrained by adverse market conditions and higher levels of
product returns outside the U.S. Quality and customer service
enhancements have been successfully implemented in 1993. Oral care
product results also include shipments of the company's newly
introduced Clear Choice alcohol-free mouthwash. Sales attributable
to the acquisition of the Curel and Soft Sense skin care lines in the
second quarter of 1993 also contributed to revenue growth in this
sector. In the medical sector, revenues advanced 25% over the third
quarter of 1992. Worldwide sales of contact lenses rose 16% over
prior year levels. Combined revenues for the SeeQuence disposable
and Medalist frequent replacement lens products increased more than
70%, largely due to higher unit volumes. The launch of the Occasions
multifocal lens, the first product to be introduced as part of the
new Occasions line of frequent replacement contact lenses, also
contributed incremental sales in the period. Ophthalmic
pharmaceutical revenues declined modestly, as gains for U.S.
operations were offset by a decline in revenues for the company's Dr.
Mann Pharma subsidiary in Germany, where changes in government
regulations continue to adversely affect results. Medical sector
revenues have also benefited from acquisitions including the first
quarter acquisition of Steri-Oss, Inc., a U.S. manufacturer of dental
implants. In the third quarter, Bausch & Lomb completed its
acquisition of Dahlberg, Inc. and established the company's Miracle
Ear Division. The division manufactures the Miracle Ear hearing aid
and will market it to its franchisees together with Bausch & Lomb's
Sound Choice product. Revenue growth in the biomedical sector from
the third quarter of last year was led by increased worldwide sales
of rodent models and incremental sales from the 1992 acquisition of
SPAFAS, Inc. the world's largest producer of pathogen-free eggs used
as media for vaccine production. The 20% increase in healthcare
segment sales during the third quarter exceeded the year-to-date rate
based on the increasing contribution of acquisitions and new product
introductions.
Optics Segment Revenues
Sales of optics products for the third quarter totaled $164.9
million, a decrease of $25.1 million or 13% compared to the same
period in 1992. Worldwide sunglass sales were 17% below the prior
year level, as sluggish worldwide demand and unfavorable currency
exchange rate movements in Europe depressed total sunglass revenues
substantially for the period. A significant increase in sports
optics revenues reflected the strength of demand for Bushnell branded
products, particularly for binoculars and riflescopes. For the nine-
month period, revenues in the optics segment declined $2.5 million
from 1992 and totaled $522.4 million, as incremental revenues for
moderately-priced sunglass lines partially offset the effect of
sluggish worldwide demand for premium-priced products.
Revenue Trends By Geographic Region
Sales in markets outside the U.S. totaled $199.6 million,
a decrease of $6.8 million or 3% from the 1992 third quarter. Changes
in currency exchange rates reduced worldwide sales growth by $12.3
million or 3% and reduced non-U.S. sales by 6%. Non-U.S. sales
represented 41% of consolidated revenues, compared to 45% in the 1992
third quarter. The success of ongoing efforts to develop new markets
for existing products and the company's trend of strong performance
outside the U.S. has been constrained by weakened market conditions
in Europe and the Asia-Pacific region. European revenues in total
declined by 10%, reflecting the adverse impact of currency exchange
rate changes which reduced revenues by 16% and the effect of new
governmental controls on drug pricing and prescribing on results
for the company's Dr. Mann Pharma subsidiary in Germany. Sales in
the Asia-Pacific region declined 4%. Improved demand for contact
lens and lens care products outside Japan was offset by a softening
in demand for sunglass products. In Japan, the improvement from 1992
was attributable to the favorable impact of currency exchange rate changes.
Significant revenue growth in the Western Hemisphere reflected double-digit
gains for contact lens care solutions and sunglasses. Revenues in Brazil
and Mexico continued to show marked improvement over results in 1992.
U.S. sales totaled $291.0 million in the third quarter, an
increase of $36.0 million or 14%. The effect of 1993 acquisitions
and the introduction of Clear Choice mouthwash led the improvement
from the prior year. The company also experienced excellent gains in
the contact lens, oral care and contact lens care businesses compared
to the prior year period. U.S. pharmaceutical revenues advanced 12%
in the third quarter, with higher shipments of the OptiPranolol line
of medications used to treat glaucoma contributing to the gain. In
the U.S. sunglass business, sales were 11% below the prior year
reflecting weakened demand.
Costs And Expenses
The ratio of cost of products sold to sales was 44.2% for the
1993 third quarter versus 45.8% for the comparable 1992 period. For
the nine-month period, this ratio was 44.6% for 1993 and 45.8% for
1992. This improvement was primarily attributable to the favorable
effect of currency on the cost of products sourced from manufacturing
facilities in Ireland, efficiencies in the U.S. pharmaceutical
business coupled with oral care product quality improvements. As
expected, margins in the contact lens business moderated slightly
based on the increasing importance of frequent and planned
replacement lens products.
Selling, administrative and general costs, including corporate
administration expenses, increased $17.6 million or 11% over the
third quarter of 1992. For the first nine months of 1993, these
costs rose $48.7 million or 11% to $507.4 million. These increases
were attributable to higher sales volumes in 1993 and the
discretionary marketing and advertising spending to launch the Clear
Choice mouthwash line and to support recently acquired product lines.
Research and development expense for the first nine months of 1993
increased $4.4 million or 11% over 1992 levels and reflected higher
expenditures directed toward advancing the company's leadership
position in the sunglass, contact lens and lens care businesses.
Business Segment And Operating Earnings
Business segment earnings of $96.1 million for the third quarter
of 1993 increased $6.9 million or 8% compared to the 1992 third
quarter. This gain reflected increased profitability in the contact
lens, lens care and oral care businesses, incremental earnings
contributed by recent acquisitions, and improved operating results
for the U.S. pharmaceutical business. Results for the quarter were
adversely affected by economic softness in key markets in Europe and
Asia as well as the sales decline at Dr. Mann Pharma, stemming from
changes in German prescription drug laws. Unfavorable currency
exchange rate changes also reduced business segment earnings by $3.6
million or 4% in the third quarter. Business segment earnings for
the first nine months of 1993 increased by $17.4 million to $247.5
million compared to $230.1 million in the prior year.
Operating earnings for the third quarter totaled $84.2 million,
an increase of $5.5 million or 7% over the prior year period. For
the first nine months of 1993, operating earnings were $212.4 million
an increase of $15.1 million or 8%. The rate of increase for
corporate administration expenses continued to be successfully
managed below Bausch & Lomb's target of 3% of sales.
Other Income And Expenses
Income from investments for the third quarter of 1993 totaled
$1.8 million, compared to $1.9 million for the same period in 1992,
as investment returns in the 1993 third quarter reflected lower
interest rates. Interest expense of $7.4 million for the 1993 third
quarter was $1.2 million higher than the third quarter of 1992, as
the favorable effect of lower interest rates was offset by the
acquisition-related increase in average outstanding debt.
The company realized net foreign currency gains of $2.1 and $2.0
million in the third quarters of 1993 and 1992, respectively, largely
attributable to its worldwide hedging operations. Net foreign
currency gains of $10.0 million for the first nine months of 1993
advanced $6.2 million over the same period in 1992. The company
expects that gains realized from its worldwide hedging operations in
future periods will moderate as interest rate differentials narrow.
For the first nine months of 1993, the provision for income taxes
increased $7.1 million from 1992. The company's reported income tax
rate was 34.7% in 1993 and 34.3% in 1992. The company adopted
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes", as of the beginning of 1992. In accordance
with the provisions of the Standard, the company recognized the
impact of recently enacted U.S. tax rate changes on its deferred
tax benefit. This was not material to its earnings results.
Liquidity And Financial Resources
Cash flows from operations totaled $94.1 million, a decrease of
$46.1 million from the prior year amount. Higher net earnings were
more than offset by an increase in net operating assets. The
increase in receivables reflected the growth in sales and longer
credit terms. Higher inventory levels were attributable to a
seasonal build for certain product lines as well as inventories
required for new product launches and acquired businesses. The
changes in other current and other assets reflected higher prepaid
account balances, primarily for the company's sponsorship of the 1994
and 1996 Olympic Games. Higher current liabilities, largely due to
the timing of payments and payroll related accruals, contributed to
the net positive cash flow from operations.
Cash flows used in investing activities reflected payments for
purchases of property, plant and equipment totaling $67.7 million in
the first nine months of 1993 versus $78.3 million for the prior year
period. Capital expenditures are expected to approximate $100.0
million for 1993 in total. Major projects include new manufacturing
capacity for contact lenses in the U.S. and Europe, expanded lens
care products manufacturing capacity in Europe and the Asia-Pacific
region, and continuing investment in state-of-the-art management
information systems. Other investing activities for the first nine
months of 1993 included the acquisitions of Dahlberg, Inc., the Curel
and Soft Sense skin care lines and Steri-Oss, Inc., a U.S.-based
manufacturer of dental implants.
Cash used in financing activities represented the net repayment
of debt, repurchases of the company's Common Shares and the payment
of dividends. During April 1993 the company redeemed at par its 8%
notes due in 1996 which were replaced by short-term borrowings. Cash
provided by financing activities reflected borrowings for the
acquisitions of the skin care lines and Dahlberg, Inc. The company's
total debt, consisting of short- and long-term borrowings, increased
by $69.9 million to $556.5 million at the end of the 1993 third
quarter. The increase was moderated by intercompany debt used
primarily to reduce U.S. promissory note borrowings over a limited
period during the year. Bausch & Lomb's ratio of total debt to
equity stood at 59.5% in 1993 and 25.5% in 1992. It should be noted
that the company also maintains a significant balance of cash and
investments, which totaled $169.8 million and $164.9 million at the
end of September 1993 and 1992, respectively. The company's net
debt, or total borrowings less cash, cash equivalents and short-term
investments, totaled $386.7 million in 1993 and $60.9 million in
1992. The ratio of net debt to equity stood at 41.4% in 1993 and
6.9% in 1992.
The company maintains a revolving credit and term loan agreement
which totals $100.0 million under a 364-day credit term with a six-
month term loan provision thereafter. The agreement also provides
for an additional $150.0 million credit line for any six-month period
during the year. For 1993, this period has been extended to 207
days. No debt was outstanding under this agreement at September 25,
1993. The company also filed a shelf registration with the
Securities and Exchange Commission (SEC) in November 1991 for up to
$250.0 million in debt, the last $85.0 million of which was issued
during the third quarter. The company is in the process of filing an
additional $300.0 million shelf registration with the SEC, and
expects it to be approved in 1993. In addition, the company
maintains bank lines of credit for U.S. and non-U.S. financing
requirements. As noted earlier, intercompany borrowings are also
used to meet financing requirements for limited periods during the
year. Liquidity and the availability of adequate credit provide the
company with a high degree of flexibility to meet its obligations and
invest in growth opportunities, including the third quarter
acquisition of Dahlberg, Inc. for $134.8 million.
The company continued to maintain its strong financial condition.
Working capital amounted to $319.8 million for the third quarter of
1993, versus $514.9 million at year-end 1992 and $397.8 million for
the third quarter of 1992. The current ratio at September 25, 1993
was 1.5 as compared to 1.9 at December 26, 1992 and 2.0 at September
26, 1992.
OTHER FINANCIAL DATA
Dividends declared on Common Stock were $0.22 per share in the
third quarter of 1993 and $0.20 per share in the third quarter of
1992. Year-to-date dividends declared on Common Stock were $0.66
compared to $0.60 per share for the prior year period. This increase
reflects the company's desire to increase its dividend on an annual
basis while maintaining a payout rate of between 30% and 35% of the
previous year's earnings.
Return on average shareholders' equity was 20.6% for the twelve-
month period ended September 25, 1993 compared to 12.2% for the
twelve-month period ended September 26, 1992. The 1992 computation
included the impact of the special charges recorded in December 1991.
Excluding the cumulative translation adjustment, return on average
shareholders' equity was 21.6% and 13.6% for the twelve-month periods
ending September 25, 1993 and September 26, 1992, respectively. Had
the impact of the special charges been excluded from the September
1992 computation, return on average shareholders' equity would have
been 19.8%, while the return excluding special charges and the
cumulative translation adjustment would have been 22.0%.
PART II - OTHER INFORMATION
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: March 15, 1996
By: (Jay T. Holmes)
Jay T. Holmes
Executive Vice President, and
Chief Administrative Officer
Date: March 15, 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 re Computation of Per Share Earnings (filed
herewith).
(12) Statement re Computation of Ratio of Earnings to Fixed
Charges (filed herewith).
(27) Financial Data Schedule (filed herewith)
<TABLE>
Exhibit 11
Statement re Computation of Per Share Earnings
Dollars And Shares In Thousands-
Except Per Share Data
<CAPTION>
NINE MONTHS ENDED
September 25 September 26
1993* 1992
<S> <C> <C>
Net earnings $131,901 $119,684
-------- ---------
-------- ---------
Actual outstanding common shares
at beginning of year 59,444 59,481
Average common shares issued for
stock options and effects of
assumed exercise of common
stock equivalents and
repurchase of common shares 707 900
-------- ---------
Average common shares
outstanding 60,151 60,381
-------- ---------
-------- ---------
Net earnings per common and
common share equivalent $ 2.19 $ 1.98
-------- ---------
-------- ---------
<FN>
*Results have been restated as more fully described in
Note A - "Restatement of Financial Information"
</TABLE>
<TABLE>
Exhibit 12
Statement Regarding Computation of Ratio of Earnings to Fixed Charges
Dollar Amounts In Thousands
<CAPTION>
September 25, December 26,
1993* 1992
<S> <C> <C>
Earnings before provision
for income taxes and
minority interest $206,927 $262,644
Fixed charges 26,091 31,618
Capitalized interest, net
of current period amortization 195 (200)
--------- ---------
Total earnings as adjusted $233,213 $294,062
--------- ---------
--------- ---------
Fixed charges:
Interest (including interest
expense and capitalized
interest) $ 24,960 $ 29,968
Portion of rents representative
of the interest factor 1,131 1,650
--------- ---------
Total fixed charges $ 26,091 $ 31,618
--------- ---------
--------- ---------
Ratio of earnings to fixed charges 8.94 9.30
--------- ---------
--------- ---------
<FN>
*Results have been restated as more fully described
in Note A - "Restatement of Financial Information"
</TABLE>
[TYPE] EX-27
[ARTICLE] 5
<TABLE>
<S> <C> <C>
[PERIOD-TYPE] 9-MOS QTR-3
[FISCAL-YEAR-END] DEC-25-1993 DEC-25-1993
[PERIOD-END] SEP-25-1993* SEP-25-1993*
[CASH] 128,336 128,336
[SECURITIES] 41,463 41,463
[RECEIVABLES] 369,766 369,766
[ALLOWANCES] 15,445 15,445
[INVENTORY] 316,114 316,114
[CURRENT-ASSETS] 985,771 985,771
[PP&E] 923,011 923,011
[DEPRECIATION] 395,497 395,497
[TOTAL-ASSETS] 2,063,084 2,063,084
[CURRENT-LIABILITIES] 665,943 665,943
[BONDS] 326,453 326,543
[COMMON] 24,151 24,151
[PREFERRED-MANDATORY] 0 0
[PREFERRED] 0 0
[OTHER-SE] 910,739 910,739
[TOTAL-LIABILITY-AND-EQUITY] 2,063,084 2,063,084
[SALES] 1,377,170 490,136
[TOTAL-REVENUES] 1,377,170 490,136
[CGS] 614,267 216,652
[TOTAL-COSTS] 614,267 216,652
[OTHER-EXPENSES] 550,535 189,241
[LOSS-PROVISION] 3,349 1,639
[INTEREST-EXPENSE] 24,960 7,446
[INCOME-PRETAX] 206,927 80,612
[INCOME-TAX] 71,731 27,595
[INCOME-CONTINUING] 131,901 52,022
[DISCONTINUED] 0 0
[EXTRAORDINARY] 0 0
[CHANGES] 0 0
[NET-INCOME] 131,901 52,022
[EPS-PRIMARY] 2.19 0.87
[EPS-DILUTED] 2.19 0.87
<FN>
*Results have been restated as more fully described in
Note A - "Restatement of Financial Information."
<F1>INCOME BEFORE TAXES AND MINORITY INTEREST
</FN>
</TABLE>
March 15, 1996
U.S. Securities and Exchange Commission
Operations Center
6432 General Greenway
Alexandria, VA 22312 Stop 0-7
RE: Bausch & Lomb Incorporated
File No. 1-4105
CIK: 0000010427
Ladies and Gentlemen:
Pursuant to the requirements of the Securities and Exchange Act of
1934, we are transmitting herewith the attached Form 10-Q/A for the
third quarter ended September 25, 1993.
Very truly yours,
(Thomas H. McLain)
Thomas H. McLain
Staff Vice President,
Corporate Accounting and Financial Reporting
