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 Quarterly Period Ended June 30, 2000
---------------
Commission File Number 1-8036
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WEST PHARMACEUTICAL SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania
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(State or other jurisdiction of
incorporation or organization)
101 Gordon Drive, PO Box 645,
Lionville, PA
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(Address of principal executive
offices)
23-1210010
----------------------
(I.R.S. Employer
Identification Number)
19341-0645
----------------------
(Zip Code)
Registrant's telephone number, including area code 610-594-2900
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N/A
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Former name, former address and former fiscal year, if
changed since last report.
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 twelve months, and
(2) has been subject to such filing requirements for the past
90 days. Yes X . No .
--- ---
June 30, 2000 -- 14,359,136
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
<PAGE>
Page 2
Index
Form 10-Q for the
Quarter Ended June 30, 2000
Page
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Part I - Financial Information
Item 1. Financial Statements
Consolidated Statements of Income for the
Three and Six Months ended June 30, 2000 and
June 30, 1999 3
Condensed Consolidated Balance Sheets at June 30,
2000 and December 31, 1999 4
Condensed Consolidated Statements of Cash Flows
for the Six Months ended June 30, 2000 and June 30, 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosure
about Market Risk 14
Part II - Other Information
Item 1. Legal Proceedings 14
Item 2. Change in Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
Index to Exhibits F-1
<PAGE>
Page 3
Part I. Financial Information
Item 1. Financial Statements
West Pharmaceutical Services, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------- --------------- ------------- --------------
Net sales ............................ $112,700 100% $124,400 100% $220,400 100% $238,600 100%
Cost of goods and services sold....... 84,500 75 84,600 68 164,000 74 164,400 69
--------------- --------------- ------------- --------------
Gross profit ...................... 28,200 25 39,800 32 56,400 26 74,200 31
Selling, general and
administrative expenses ........... 17,000 15 19,700 16 34,400 16 36,700 15
Other expense, net.................... -- -- 300 -- 400 -- 300 --
--------------- --------------- ------------- --------------
Operating profit .................. 11,200 10 19,800 16 21,600 10 37,200 16
Interest expense ..................... 3,400 3 2,800 2 6,400 3 4,800 2
--------------- --------------- ------------- --------------
Income before income taxes
and minority interests ........... 7,800 7 17,000 14 15,200 7 32,400 14
Provision for income taxes ........... 3,000 3 6,600 5 5,700 3 12,500 6
Minority interests ................... 100 -- -- -- 200 -- 100 --
--------------- --------------- ------------- --------------
Income from consolidated operations 4,700 4% 10,400 8% 9,300 4% 19,800 8%
--- --- --- ---
Equity in net income of
affiliated companies ............. 300 -- 800 100
-------- -------- -------- --------
Net income ....................... $ 5,000 $ 10,400 $ 10,100 $ 19,900
-------- -------- -------- --------
Net income per share:
Basic ..............................$ 0.35 $ 0.70 $ 0.70 $ 1.33
Assuming dilution ..................$ 0.35 $ 0.69 $ 0.70 $ 1.32
-------- -------- -------- --------
Average common shares outstanding ....... 14,463 14,945 14,487 15,017
Average shares assuming dilution ........ 14,465 15,043 14,495 15,113
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
Page 4
West Pharmaceutical Services, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Unaudited
June 30, Dec. 31,
2000 1999
ASSETS --------- --------
Current assets:
Cash, including equivalents ........ $ 37,300 $ 45,300
Accounts receivable ................ 69,800 74,600
Inventories ........................ 43,700 42,100
Current deferred income tax benefits 7,200 7,300
Other current assets ............... 20,100 15,400
-------- --------
Total current assets ........................ 178,100 184,700
-------- --------
Net property, plant and equipment ........... 233,100 227,600
Investments in affiliated companies ......... 21,700 20,200
Goodwill .................................... 63,200 66,500
Deferred charges and other assets ........... 59,700 52,800
-------- --------
Total Assets ................................ $555,800 $551,800
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt .. $ 2,100 $ 2,200
Notes payable ...................... 9,800 27,400
Accounts payable ................... 22,600 25,500
Accrued expenses:
Salaries, wages, benefits ....... 12,600 15,600
Income taxes payable ............ 11,900 5,500
Other ........................... 27,600 27,800
-------- --------
Total current liabilities ................... 86,600 104,000
-------- --------
Long-term debt, excluding current portion ... 172,600 141,500
Deferred income taxes ....................... 47,200 48,000
Other long-term liabilities ................. 25,100 26,300
Minority interests .......................... 800 800
Shareholders' equity ........................ 223,500 231,200
-------- --------
Total Liabilities and Shareholders' Equity .. $555,800 $551,800
-------- --------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> Page 5
West Pharmaceutical Services, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended
June 30, June 30,
2000 1999
-------- --------
Cash flows from operating activities:
Net income, plus net non-cash items ............... $ 21,100 $ 35,000
Changes in assets and liabilities ................. 3,000 (4,700)
-------- --------
Net cash provided by operating activities .................. 24,100 30,300
-------- --------
Cash flows from investing activities:
Property, plant and equipment acquired ............ (29,500) (19,500)
Proceeds from sale of assets ...................... -- 100
Payment for acquisitions, net of cash acquired .... (1,000) (15,900)
Customer advances, net of repayments .............. (1,900) (1,400)
-------- --------
Net cash used in investing activities ...................... (32,400) (36,700)
-------- --------
Cash flows from financing activities:
Proceeds from senior debt ......................... -- 100,000
Net borrowings (repayments) under revolving
credit agreements ................................ 31,000 (71,600)
Repayment of other long-term debt ................. (14,500) (900)
Notes payable, net ................................ (500) 1,600
Dividend payments ................................. (5,000) (4,800)
Sale of common stock, net ......................... 600 1,600
Purchase of treasury stock ........................ (9,900) (9,000)
-------- --------
Net cash provided by financing activities .................. 1,700 16,900
Effect of exchange rates on cash ........................... (1,400) (2,200)
-------- --------
Net (decrease) increase in cash, including equivalents ..... $ (8,000) $ 8,300
-------- --------
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
Page 6
West Pharmaceutical Services, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
The interim consolidated financial statements for the six-month period ended
June 30, 2000 should be read in conjunction with the consolidated financial
statements and notes thereto of West Pharmaceutical Services, Inc., appearing in
the Company's 1999 Annual Report on Form 10-K. The year-end condensed
consolidated balance sheet data was derived from audited financial statements,
but does not include all disclosures required by generally accepted accounting
principles. Interim results are based on the Company's accounts without audit.
1. Interim Period Accounting Policy
---------------------------------
In the opinion of management, the unaudited Condensed Consolidated Balance
Sheet as of June 30, 2000 and the related unaudited Consolidated Statements
of Income for the three and six-month periods then ended, and the
unaudited Condensed Consolidated Statement of Cash Flows for the six-month
period then ended and for the comparative period in 1999 contain all
adjustments, consisting only of normal recurring accruals, necessary to
present fairly the financial position as of June 30, 2000 and the results
of operations and cash flows for the respective periods. The results of
operations for any interim period are not necessarily indicative of results
for the full year.
Operating Expenses
-------------------
To better relate costs to benefits received or activity in an interim
period, certain operating expenses have been annualized for interim
reporting purposes. Such expenses include certain employee benefit costs,
annual quantity discounts and advertising.
Income Taxes
-------------
The tax rate used for interim periods is the estimated annual effective
consolidated tax rate, based on the current estimate of full year results,
except that taxes applicable to operating results in Brazil and prior year
adjustments, if any, are recorded as identified.
The effective tax rate for 2000 is estimated at 37.5%, a .5% increase over
the rate used for the first quarter of 2000. This change was made in
response to the currently projected geographic mix of earnings and the
potential elimination of a U.S. tax benefit on foreign sales corporations.
<PAGE>
Page 7
West Pharmaceutical Services, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
(continued)
2. Inventories at June 30, 2000 and December 31, 1999 are
summarized as follows:
6/30/00 12/31/99
------- -------
Finished goods $16,000 $14,000
Work in process 14,400 12,800
Raw materials . 13,300 15,300
------- -------
$43,700 $42,100
------- -------
------- -------
3. A summary of property, plant and equipment at June 30, 2000 and
December 31, 1999 is presented in the following table:
6/30/00 12/31/99
-------- --------
Property, plant and equipment $500,500 $489,200
Less accumulated depreciation
and amortization .......... 267,400 261,600
-------- --------
Net property, plant
and equipment ............. $233,100 $227,600
-------- --------
-------- --------
4. For the three and six months ended June 30, 2000 and 1999, the
Company's comprehensive income (loss) is as follows:
Three Months Ended Six Months Ended
6/30/00 6/30/99 6/30/00 6/30/99
-------- ------- ------- -------
Net income ............. $ 5,000 $10,400 $10,100 $ 19,900
Foreign currency
translation adjustments (500) (4,600) (4,200) (13,200)
-------- ------- -------- --------
Comprehensive income.... $ 4,500 $ 5,800 $ 5,900 $ 6,700
-------- ------- -------- --------
-------- ------- -------- --------
<PAGE>
Page 8
West Pharmaceutical Services, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
(Continued)
5. Net sales to external customers and operating profit (loss) by operating
segment for the three and six months ended June 30, 2000 and June 30,
1999 are as follows:
Three Months Ended Six Months Ended
June 30 June 30
Net Sales: 2000 1999 2000 1999
---------- -------- -------- -------- --------
Device product development $ 94,600 $100,800 $186,700 $194,200
Contract services ........ 18,100 23,400 33,400 44,000
Drug delivery research
and development ........ 300 200 700 400
Corporate and unallocated (300) -- (400) --
-------- -------- -------- --------
Consolidated Total ....... $112,700 $124,400 $220,400 $238,600
-------- -------- -------- --------
-------- -------- -------- --------
Three Months Ended Six Months Ended
June 30 June 30
Operating Profit (Loss): 2000 1999 2000 1999
------------------------ -------- -------- -------- --------
Device product development $ 20,400 $ 26,000 $ 40,200 $ 47,500
Contract services ........ (3,800) 1,800 (7,400) 4,000
Drug delivery research
and development ........ (2,400) (1,600) (4,700) (3,000)
Corporate and unallocated
items .................. (3,000) (6,400) (6,500) (11,300)
-------- -------- -------- --------
Consolidated Total ....... $ 11,200 $ 19,800 $ 21,600 $ 37,200
-------- -------- -------- --------
-------- -------- -------- --------
Compared with December 31, 1999, there were no material changes in the
amount of assets as of June 30, 2000 for any operating segment.
6. Common stock issued at June 30, 2000 was 17,165,141 shares, of which
2,806,005 shares were held in treasury. Dividends of $.17 per common
share were paid in the second quarter of 2000 and a dividend of $.17
per share payable August 1, 2000 to holders of record on July 19, 2000
was declared on June 20, 2000.
7. The Company has accrued the estimated cost of environmental compliance
expenses related to soil or ground water contamination at current and
former manufacturing facilities. The ultimate cost to be incurred by
the Company and the timing of such payments cannot be fully determined.
However, based on consultants' estimates of the costs of remediation in
<PAGE>
Page 9
West Pharmaceutical Services, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
(Continued)
accordance with applicable regulatory requirements, the Company
believes the accrued liability of $1,400 at June 30, 2000 is
sufficient to cover the future costs of these remedial actions, which
will be carried out over the next several years. The Company has not
anticipated any possible recovery from insurance or other sources.
8. In January 2000, the Company paid $1 million to acquire additional
ownership in a firm involved in developing genotyping technology. As
of June 30, 2000 the Company's cumulative investment in this firm is
$2.3 million, representing a 12.8% ownership interest. Upon the
satisfaction of certain future milestones, the Company is
conditionally committed to investing up to an additional $1.3
million, which would result in a cumulative ownership percentage of up
to 19.95%.
<PAGE>
Page 10
Item 2.
Management's Discussion and Analysis of Financial Condition and
----------------------------------------------------------------
Results of Operations for the Three and Six Months ended June 30, 2000
----------------------------------------------------------------------
versus Comparable 1999 periods.
--------------------------------
Net Sales
------------
Net Sales for the second quarter of 2000 were $112.7 million compared to $124.4
million reported in the second quarter of 1999. At constant exchange rates,
sales for the second quarter 2000 declined 5.9% versus the prior year quarter.
Second quarter 2000 sales for the Device Product Development segment were $94.6
million, a decline of 1.9% at constant exchange rates, as compared to the second
quarter of 1999 which had an unusually high 10.5% growth rate. Sales in domestic
markets declined by approximately 6% as a result of inventory reductions at
certain customers of some high margin products. Excluding the plastic device
facility in the United Kingdom, sales to international markets increased by 4.5%
over the prior year quarter. The Company is transitioning its plastics
manufacturing plant in Lewes, England to a facility focused on producing medical
devices and multi-component consumer products. During the transition period,
this plant will be under-utilized.
The Contract Services segment's results were significantly below 1999's second
quarter. Sales were $18.1 million, $5.3 million, or 22.9% below second quarter
1999 levels. The contract manufacturing and packaging unit continues to
experience a decline in volume over the prior year as a result of reduced
demand, project cancellations and lower-than-anticipated market acceptance for
customers' products. Although the Company is aggressively seeking new business,
this segment operates in extremely competitive markets. A return to
profitability is not forecasted until at least the fourth quarter of 2000.
Net sales for the first half of 2000 were $220.4 million, 7.6% lower than sales
in the same period of 1999 and 4.1% lower at constant exchange rates. Excluding
exchange rate variances, Device Product Development sales were .4% higher as
strong results in international markets offset decreased sales in domestic
markets. Year-to-date Contract Services segment sales declined by 24.2% from the
prior year, from the same causes as were stated above for the second quarter
decrease.
Gross Profit
---------------
The second quarter 2000 consolidated gross margin was 25.1%, compared with 32.0%
in 1999. Lower margins were reported in both the Device Product Development and
Contract Services segments. For Device Product Development, lower domestic sales
volumes, lower-value product mix, severance costs and low volume at the UK
plastic device facility, and the higher cost of dollar-based raw materials to
international operations negatively impacted gross margins. Low demand, contract
cancellations and severance costs within the contract manufacturing and
packaging unit caused the Contract Services segment to operate below breakeven
margins.
<PAGE>
Page 11
Results of Operations and Financial Condition for the Three and Six
Months Ended June 30, 2000 versus Comparable 1999 periods, continued
--------------------------------------------------------------------
The consolidated gross profit margin for the six-month period was 25.6% compared
with 31.1% in the same period of 1999. The year-to-date negative gross margin of
the Contract Services segment, largely from the contract manufacturing and
packaging unit, accounts for the majority of the decline in the profit margin.
Year-to-date gross margins in the Device Product Development segment also
declined as a result of the U.K. Plastics facility volume reductions and
severance costs, and the lower demand for high-value product mix in domestic
markets.
Selling, General and Administrative Expenses
--------------------------------------------------------
Selling, general and administrative expenses were down $2.7 million (13.1%) as
compared with the second quarter of 1999. Higher income on pension assets, the
favorable impact of foreign exchange rates on non-U.S. dollar expenses, and
lower incentive based compensation expenses more than offset higher drug
delivery system research and development expenses, an additional month of
clinical services expenses, and severance costs in several segments. Drug
Delivery Systems costs were higher as the Company continues to advance the
development of several promising new products and interprets data from the Phase
I clinical trials for nasal morphine. The Company and a potential licensee are
in the due diligence process of negotiations which should lead to the first
license agreement for several internally developed drug delivery products.
For the six-month period ending June 30 2000, selling, general and
administrative expenses declined by $2.3 million versus the prior year. The same
factors that influenced the second quarter comparisons also influenced the year
to date figures. In addition, 2000 results include a full 6 months of clinical
services costs (acquired April 20, 1999), versus 2 months in 1999.
Other expense
----------------------
For the second quarter of 2000, foreign currency transaction losses and losses
on fixed asset disposals were offset by interest income. The 1999 second quarter
contained higher fixed asset disposition losses as a result of Y2K remediation
efforts. In addition, the six-month period for 2000 contains costs related to a
one-time environmental action by Brazilian customs which resulted in the
destruction of raw material and finished products which were imported into that
country.
Interest Expense and Equity in Affiliates
-------------------------------------------------
Interest expense increased by $.6 million over 1999 in the second quarter
comparison ($1.6 million in the year-to-date comparison), largely due to
additional debt associated with stock repurchases under a one million share
buyback program announced in March of 1999. During 2000, 358,700 shares have
been purchased at an average cost of $27.49 per share, bringing the total shares
repurchased to 889,500. Higher interest rates and acquisition financing also
contributed to the increase over the prior year for both the quarter and
year-to-date periods.
<PAGE>
Page 12
Results of Operations and Financial Condition for the Three and Six
Months Ended June 30, 2000 versus Comparable 1999 periods, continued
--------------------------------------------------------------------
Equity in net income of affiliates increased by $0.3 million and by $0.7 million
versus the second quarter and six-month 1999 periods, respectively. These
increases were generated from increased sales and improved margins of Daikyo
Seiko, Ltd., a Japanese company in which the Company holds a 25% ownership
interest.
Taxes
-------
The tax rate in the quarter is 38% compared with 38.5% in the same period of
1999. The estimated effective tax rate for 2000 is 37.5%, a .5% increase over
earlier estimates. The charge reflects expectations of the current geographic
mix of earnings and the potential elimination of a U.S. tax benefit on foreign
sales corporations. These factors largely offset the favorable impact of last
year's European tax reorganization. The 2000 estimated tax rate of 37.5% is
equal to 1999's full year rate on operations. Expected changes in the German tax
law will result in adjustment of deferred tax liabilities for subsidiaries in
that country in the period of enactment.
Net Income
----------
Net income for the second quarter 2000 was $5.0 million, or $.35 per share,
compared with net income of $10.4 million, or $.70 per share, in the same period
of 1999. Average common shares outstanding in the second quarter were 14.5
million, compared with 14.9 million during second quarter 1999. The reduction in
average common shares outstanding is due to the Company's stock buyback program.
For the six-month period, 2000 net income was $10.1 million, or $.70 per share,
compared with $19.9 million, or $1.33 per share, in 1999. Average common shares
outstanding for the first six months of 2000 were 14.5 million compared with
15.0 million in 1999.
Financial Position
------------------
Working capital at June 30, 2000 was $91.5 million compared with $80.7 million
at December 31, 1999. The working capital ratio at June 30, 2000 was 2.1 to 1.
The improvement in the working capital ratio is due mostly to the Company's
completion of a new credit facility replacing the revolving credit agreement
expiring in August 2000 which allows it to refinance short-term notes payable
on a long-term basis. In July 2000, the Company signed a $135 million revolving
credit agreement with a group of six banks. The credit agreement consists of a
$70 million five-year revolving credit facility and a $65 million 364-day line
of credit. Interest cost on these facilities will be based on London
Inter-Bank Offering Rates (LIBOR) plus a margin dependent on the Company's debt
to total capital ratio. The interest rate on the initial borrowings under this
facility was 7.4%. Commitment fees on these credit agreements fluctuate
according to the Company's debt to total capital ratio with a maximum fee of
17.5 basis points on the 364-day facility and 20.0 basis points on the five-year
facility. Debt as a percentage of total invested capital at June 30, 2000 was
45.1% compared with 42.5% at December 31, 1999.
<PAGE>
Page 13
Results of Operations and Financial Condition for the Three and Six
Months Ended June 30, 2000 versus Comparable 1999 periods, continued
--------------------------------------------------------------------
For the six-month period, funds generated from operations totaled $24.1 million
versus $30.3 million in the prior year period as a result of the lower net
income. Capital spending for the year-to-date period totaled $29.5 million,
covering maintenance and efficiency upgrades on Device Product Development
segment assets. Full year capital spending for 2000 is projected to be
approximately $60.0 million. Other investment activity for the six months of
2000 included a $1.0 million additional investment in a genotyping technology
company, and $1.9 million of spending on customer specific projects. The Company
paid cash dividends totaling $5.0 million ($0.34 per share) and repurchased
common stock at a total cost of $9.9 million (358,700 shares at an average price
of $27.49 per share). These cash outflows were financed by $16.0 million of
increased net borrowings.
The Company believes its financial condition and current capitalization indicate
an ability to finance substantial future growth.
Recently Issued Accounting Pronouncements
------------------------------------------
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101). Among
other things, SAB 101 provides guidance for recording revenue related to
non-refundable, up-front fees received in connection with conveying licensing or
other intangible rights or for delivery of particular products or services. In
general SAB 101 defers the recognition of revenue from such up-front payments
over any related service period. While SAB 101 has no impact to the Company's
current year-to-date or historic earnings recognition from the sale of
intangible rights, it may impact recognition of any up front licensing and other
fees that may result from licensing agreements currently being negotiated for
the Company's drug delivery technologies.
In July 2000, the Emerging Issues Task Force (EITF) of the Financial Accounting
Standards Board reached a final consensus on Issue 00-10 "Accounting for
Shipping and Handling Revenues and Costs". Issue 00-10 addresses the income
statement classification of amounts charged to customers for shipping and
handling. The EITF concluded that amounts billed to customers for shipping and
handling should be included in revenue, rather than netting the shipping revenue
against the related cost. For the Company, the reclassification of these
shipping costs will increase reported sales and cost of goods sold, with no
impact on reported gross profit amounts, however reported gross margin
percentages will decrease slightly. The Company will adopt EITF 00-10 in the
fourth quarter of 2000 and will restate prior periods in accordance with the
requirements.
Market Risk
---------------
The Company is exposed to various market risk factors such as fluctuating
interest rates and foreign currency rate fluctuations. These risk factors can
impact results of operations, cash flows and financial position. These risks are
managed periodically with the use of derivative financial instruments such as
interest rate swaps and forward exchange contracts. In accordance with Company
policy, derivative financial instruments are not used for speculation or trading
purposes.
<PAGE>
Page 14
Results of Operations and Financial Condition for the Three and Six
Months Ended June 30, 2000 versus Comparable 1999 periods, continued
--------------------------------------------------------------------
At June 30, 2000 and December 31, 1999 the Company had three interest rate swap
agreements in effect, with an estimated fair value less than $0.1 million. There
were no forward exchange contracts in effect at June 30, 2000.
Statements concerning forecasted results, financial or otherwise, which are
contained in the above material, constitute "forward looking statements" that
involve risks and uncertainties. The Company's actual results may differ
materially from those expressed in any forward looking statement and are
dependent on a number of factors including but not limited to, sales demand,
timing of customers' projects, competitive pressures, the strength or weakness
of the U.S. dollar, inflation, the cost of raw materials, successful
continuance of cost-improvement programs and statutory tax rates.
Item 3. Quantitative and Qualitative Disclosure about Market Risk
----------------------------------------------------------
The information called for by this item is incorporated by reference to the text
appearing in Item 2 "Management's Discussion and Analysis of Financial Condition
and Results of Operations- Market Risk".
Part II - Other Information
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
None.
Item 3. Defaults Upon Senior Securities
-------------------------------
None.
<PAGE>
Page 15
Item. 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) The Company held its annual meeting of
shareholders on April 25, 2000.
(c) Class I directors (with a term expiring in
2003) were elected by a vote of :
For Against
--- -------
William G. Little 9,950,719 86,736
William H. Longfield 9,960,808 76,648
Monroe E. Trout 9,960,102 77,353
Anthony Welters 9,960,966 76,491
Tenley E. Albright, John Conway, George W. Ebright, L.
Robert Johnson, John P. Neafsey, J. Roffe Wike, II and
Geoffrey F. Worden continued their term of office after the
meeting.
The appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for the year ending
December 31, 2000 was approved by a vote of 10,028,563 for
the appointment and 5,416 against, with 3,476 abstentions.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) See Index to Exhibits on page F-1 of this Report.
(b) No reports on Form 8-K have been filed for the
quarter ended June 30, 2000.
<PAGE>
Page 16
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.
WEST PHARMACEUTICAL SERVICES, INC.
-----------------------------------
(Registrant)
August 14, 2000 /s/ Anna Mae Papso
--------------- ---------------------------------
Date (Signature)
Anna Mae Papso
Corporate Vice President of Finance
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number
(3) (a) Amended and Restated Articles of Incorporation
of the Company through January 4, 1999,
incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1998 (File No. 1-8036).
(3) (b) ByLaws of the Company, as amended through
October 27, 1998, incorporated by reference to
Exhibit (3)(b) to the Company's Form 10-Q for
the quarter ended September 30, 1998 (File No.
1-8036).
(4) (a) Form of stock certificate for common stock,
incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1998 (File No. 1-8036).
(10)(a) Non-Qualified Deferred Compensation Plan for Designated
Executive Officers, adopted August 30, 1994, reflecting
amendments effective on March 7, 1995, April 28, 1998 and
April 1, 2000.
(10)(b) Schedule of Agreements with Executive Officers.
(11) Not Applicable.
(12) Not Applicable.
(15) None.
(16) Not applicable.
(18) None.
(19) None.
(22) None.
(23) None.
(24) None.
(27) Financial Data Schedule
(99) None.
F - 1
