<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 1999
-----------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to __________________
Commission file number 001-4802
----------
Becton, Dickinson and Company
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-0760120
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 Becton Drive, Franklin Lakes, New Jersey 07417-1880
------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(201) 847-6800
----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
----------------------------------------------------
(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 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X. No ___.
-
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class of Common Stock Shares Outstanding as of January 31, 2000
--------------------- -----------------------------------------
Common stock, par value $1.00 251,570,836
<PAGE>
BECTON, DICKINSON AND COMPANY
FORM 10-Q
For the quarterly period ended December 31, 1999
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Part I. FINANCIAL INFORMATION Page Number
- ------- --------------------- -----------
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets.......................... 3
Condensed Consolidated Statements of Income.................... 4
Condensed Consolidated Statements of Cash Flows................ 5
Notes to Condensed Consolidated Financial Statements........... 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................. 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk ....... 13
Part II. OTHER INFORMATION
- -------- -----------------
Item 1. Legal Proceedings................................................. 14
Item 2. Changes in Securities and Use of Proceeds......................... 15
Item 3. Defaults Upon Senior Securities................................... 15
Item 4. Submission of Matters to a Vote of Security Holders............... 15
Item 5. Other Information................................................. 15
Item 6. Exhibits and Reports on Form 8-K.................................. 15
Signature .................................................................. 16
Exhibits .................................................................. 17
</TABLE>
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
Thousands of Dollars
<TABLE>
<CAPTION>
December 31, September 30,
Assets 1999 1999
- ------ ----------------------------------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and equivalents $ 70,936 $ 59,932
Short-term investments 663 4,660
Trade receivables, net 790,952 812,544
Inventories (Note 2):
Materials 169,838 160,332
Work in process 99,384 94,627
Finished products 397,174 387,574
------------- -----------
666,396 642,533
Prepaid expenses, deferred taxes and other 173,692 164,056
------------- -----------
Total Current Assets 1,702,639 1,683,725
Property, plant and equipment 2,969,062 2,932,804
Less allowances for depreciation and amortization 1,526,333 1,501,655
------------- -----------
1,442,729 1,431,149
Goodwill, Net 513,880 526,942
Core and Developed Technology, Net 324,359 329,460
Other Intangibles, Net 173,866 178,285
Other 334,168 287,397
------------- -----------
Total Assets $ 4,491,641 $ 4,436,958
============= ===========
Liabilities and Shareholders' Equity
- ------------------------------------
Current Liabilities:
Short-term debt $ 611,317 $ 631,254
Payables and accrued expenses 743,345 698,068
------------- -----------
Total Current Liabilities 1,354,662 1,329,322
Long-Term Debt 953,433 954,169
Long-Term Employee Benefit Obligations 336,914 344,068
Deferred Income Taxes and Other 41,417 40,711
Commitments and Contingencies - -
Shareholders' Equity:
Preferred stock 45,890 46,717
Common stock 332,662 332,662
Capital in excess of par value 51,859 44,626
Retained earnings 2,590,826 2,539,020
Unearned ESOP compensation (20,535) (20,310)
Deferred compensation 6,064 5,949
Shares in treasury - at cost (993,291) (997,333)
Accumulated other comprehensive income (208,260) (182,643)
------------- -----------
Total Shareholders' Equity 1,805,215 1,768,688
------------- -----------
Total Liabilities and Shareholders' Equity $ 4,491,641 $ 4,436,958
============= ===========
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Thousands of Dollars, Except Per-share Data
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
--------------------------------
1999 1998
---------------- --------------
<S> <C> <C>
Revenues $ 859,164 $ 768,966
Cost of products sold 449,951 385,710
Selling and administrative 233,838 223,116
Research and development 53,743 49,310
------------- ----------
Total Operating Costs and Expenses 737,532 658,136
------------- ----------
Operating Income 121,632 110,830
Interest expense, net (21,557) (17,871)
Other income, net 1,674 1,025
------------- ----------
Income Before Income Taxes 101,749 93,984
Income tax provision 26,455 17,826
------------- ----------
Net Income $ 75,294 $ 76,158
============= ==========
Earnings Per Share:
Basic $ .30 $ .30
============= ==========
Diluted $ .29 $ .29
============= ==========
Dividends Per Common Share $ .0925 $ .085
============= ==========
</TABLE>
See notes to condensed consolidated financial statements
4
<PAGE>
BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Thousands of Dollars
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
-------------------------------------
1999 1998
-------------- ----------------
Operating Activities
--------------------
<S> <C> <C>
Net income $ 75,294 $ 76,158
Adjustments to Net Income to Derive Net Cash
Provided By Operating Activities:
Depreciation and amortization 72,440 62,688
Change in working capital (25,960) (67,321)
Other, net (539) 15,340
--------- ---------
Net Cash Provided by Operating Activities 121,235 86,865
--------- ---------
Investing Activities
--------------------
Capital expenditures (66,697) (61,778)
Acquisitions of businesses, net of cash acquired - (41,706)
Change in investments, net 3,529 2,895
Capitalized Software (10,992) (6,776)
Other, net (20,686) (8,419)
--------- ---------
Net Cash Used for Investing Activities (94,846) (115,784)
--------- ---------
Financing Activities
--------------------
Change in short-term debt (21,417) 75,199
Proceeds of long-term debt - 185
Payments of long-term debt (349) (4,903)
Issuance of common stock from treasury 7,445 5,701
Dividends paid (698) -
--------- ---------
Net Cash (Used for) Provided by Financing Activities (15,019) 76,182
--------- ---------
Effect of exchange rate changes on cash and equivalents (366) (1,936)
--------- ---------
Net increase in cash and equivalents 11,004 45,327
Opening Cash and Equivalents 59,932 83,251
--------- ---------
Closing Cash and Equivalents $ 70,936 $ 128,578
========= =========
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE>
BECTON, DICKINSON AND COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Dollar and Share Amounts in Thousands, Except Per-share Data
December 31, 1999
Note 1 - Basis of Presentation
- ------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, in the opinion of
the management of the Company, include all adjustments which are of a normal
recurring nature, necessary for a fair presentation of financial position and
the results of operations and cash flows for the periods presented. However, the
financial statements do not include all information and footnotes required for a
presentation in accordance with generally accepted accounting principles. These
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and the notes thereto included or
incorporated by reference in the Company's 1999 Annual Report on Form 10-K. The
results of operations for the interim periods are not necessarily indicative of
the results of operations to be expected for the full year. Prior year
information has been reclassified to conform to current year presentation.
Note 2 - Inventory Valuation
- ----------------------------
An actual valuation of inventory under the LIFO method can be made only at the
end of each fiscal year based on the inventory levels and costs at that time.
Accordingly, interim LIFO calculations are based on management's estimates of
expected year-end inventory levels and costs.
Note 3 - Comprehensive Income
- -----------------------------
Comprehensive income for the Company includes the following:
<TABLE>
<CAPTION>
Three Months Ended December 31,
-------------------------------
1999 1998
---------- ----------
<S> <C> <C>
Net income $ 75,294 $ 76,158
Other Comprehensive Income, Net of Tax
Foreign currency translation adjustments (38,685) (6,882)
Unrealized gain (loss) on investments 13,068 (6,733)
---------- ----------
Comprehensive Income $ 49,677 $ 62,543
========== ==========
</TABLE>
On February 9, 2000, the Company sold a portion of its holdings in an available-
for-sale investment for a gain of approximately $16,000 before taxes. The
proceeds from this sale were approximately $18,400. The cost of this investment
was determined based upon the specific identification method.
6
<PAGE>
Note 4 - Earnings per Share
- ---------------------------
The following table sets forth the computations of basic and diluted earnings
per share:
<TABLE>
<CAPTION>
Three Months Ended December 31,
----------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Net income $ 75,294 $ 76,158
Preferred stock dividends (746) (790)
------------ ------------
Income available to common shareholders (A) 74,548 75,368
Preferred stock dividends - using "if
converted" method 746 790
Additional ESOP contribution - using "if
converted" method (169) (202)
------------ ------------
Income available to common shareholders after
assumed conversions (B) $ 75,125 $ 75,956
============ ============
Average common shares outstanding (C) 251,328 248,320
Dilutive stock equivalents from stock plans 6,287 11,823
Shares issuable upon conversion of preferred
stock 4,978 5,276
------------ ------------
Average common and common equivalent
shares outstanding - assuming dilution (D) 262,593 265,419
============ ============
Basic earnings per share (A/C) $ .30 $ .30
============ ============
Diluted earnings per share (B/D) $ .29 $ .29
============ ============
</TABLE>
Note 5 - Contingencies
- ----------------------
The Company is involved, both as a plaintiff and a defendant, in various legal
proceedings which arise in the ordinary course of business, including product
liability and environmental matters. In the opinion of the Company, the results
of these matters, individually and in the aggregate, are not expected to have a
material impact on its results of operations, financial condition or cash flows.
The Company designed and implemented a Company-wide Year 2000 plan to ensure
that its computer equipment and software and devices with date-sensitive
embedded technology would be Year 2000-compliant. To date, the Company is not
aware of any significant Year 2000-related issues. The Company's belief that it
has completed each of the phases of the plan is based upon management's best
estimates, which depend upon numerous assumptions regarding future events,
including the continued availability of certain resources, third-party
remediation plans, and other factors. These estimates and assumptions, however,
may prove not to be accurate, and actual results could differ materially from
those anticipated.
7
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Note 6 - Segment Data
- ---------------------
The Company's organizational structure is based upon its three principal
business segments: BD Medical Systems, BD Biosciences, and BD Preanalytical
Solutions. The Company evaluates performance based upon operating income.
Segment operating income represents revenues reduced by product costs and
operating expenses.
Financial information for the Company's segments is as follows:
Three Months Ended December 31,
-------------------------------------
1999 1998
-------------- --------------
Revenues
--------
Medical Systems $ 462,606 $ 425,165
Biosciences 264,416 223,279
Preanalytical Solutions 132,142 120,522
-------------- --------------
Total Revenues (A) $ 859,164 $ 768,966
============== ==============
Segment Operating Income
------------------------
Medical Systems $ 94,701 $ 80,826
Biosciences 25,311 29,457
Preanalytical Solutions 27,308 28,129
-------------- --------------
Total Segment Operating Income 147,320 138,412
Unallocated Expenses (B) (45,571) (44,428)
-------------- --------------
Income Before Income Taxes $ 101,749 $ 93,984
============== ==============
(A) Intersegment revenues are not material.
(B) Includes interest, net; foreign exchange; and corporate expenses.
Note 7 - Special Charges
- ------------------------
The Company recorded special charges in fiscal 1999 and 1998 associated with two
restructuring programs, primarily designed to improve the Company's cost
structure, refocus certain businesses, and write down impaired assets. A
summary of the special charge accrual activity during the first three months of
fiscal 2000 follows:
Severance Restructuring Other
------------- ------------- -------------
Accrual Balance at
September 30, 1999 $13,100 $ 9,250 $ 6,100
Payments (600) (4,100) (600)
------------- ------------- -------------
Accrual Balance at
December 31, 1999 $12,500 $ 5,150 $ 5,500
============= ============= =============
The 1998 restructuring plan included charges associated with the restructuring
of certain manufacturing operations. As of December 31, 1999, approximately 95
positions have been eliminated, and the Company expects that an additional 150
people will be affected by this plan. These remaining affected employees are
related to the planned closure of a surgical blade plant in the United States,
scheduled for the first half of fiscal year 2002. The remaining 1998
8
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restructuring accruals related to this closure consist primarily of severance.
Note 8 - Acquisition Reserves
- -----------------------------
During fiscal year 1998, the Company acquired the Medical Devices Division
("MDD") of The BOC Group. The assumed liabilities for the MDD acquisition
included approximately $14,300 for severance and exit costs associated with the
integration of certain MDD administrative functions. As of December 31, 1999,
these accruals had been substantially paid.
During fiscal year 1997, the Company acquired Difco Laboratories Incorporated
("Difco"). The assumed liabilities for the Difco acquisition included
approximately $17,500 for severance and other exit costs associated with the
closing of certain Difco facilities. As of December 31, 1999, approximately
$5,700 of these reserves remained. The Company expects to substantially pay
these remaining accruals over the next six months.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
Results of Operations
- ---------------------
First quarter revenues of $859 million exceeded prior year revenues by 12
percent. Revenue growth for the quarter was unfavorably affected by the
strengthened dollar versus the prior year, which reduced revenues by an
estimated $11 million. We believe that revenues modestly benefited from
purchases related to the preparation for potential year 2000 disruptions.
Three Months Ended December 31,
Segment Revenues -------------------------------
(Dollars in millions) 1999 1998 % Change
==================================================================
Medical Systems
---------------
United States $ 207 $ 193 7
International 256 233 10
------------------------------------------------------------------
Total $ 463 $ 425 9
==================================================================
Biosciences
-----------
United States $ 151 $ 123 22
International 114 100 14
------------------------------------------------------------------
Total $ 264 $ 223 18
==================================================================
Preanalytical Solutions
-----------------------
United States $ 69 $ 63 9
International 63 57 10
------------------------------------------------------------------
Total $ 132 $ 121 10
==================================================================
Total Revenues
--------------
United States $ 426 $ 379 13
International 433 390 11
------------------------------------------------------------------
Total $ 859 $ 769 12
==================================================================
Recent acquisitions, primarily in the United States, added about $20 million to
BD Biosciences ("Biosciences") revenues and about $6 million to BD Medical
Systems ("Medical") revenues for the quarter. Worldwide revenues for the Medical
and BD Preanalytical Solutions ("Preanalytical") segments reflected good growth
in sales of advanced protection devices. All segments reported strong growth in
international sales of core products. International revenues grew approximately
14 percent after excluding the unfavorable impact of foreign currency
translation.
Medical segment operating income increased from the prior year primarily due to
sales growth in advanced protection devices. The decrease in Biosciences segment
operating income reflects the amortization associated with fiscal 1999
acquisitions. Preanalytical segment operating income decreased from the prior
year despite an increase in sales growth in advanced protection devices. This
decrease is due to continued investment in the research and development and the
future
10
<PAGE>
generation of advanced protection devices, as well as the unfavorable effect of
changes in foreign currency rates. (See Note 6 in "Notes to Condensed
Consolidated Financial Statements" for additional segment income information.)
Gross profit margin was 47.6% compared with last year's first quarter ratio of
49.8%. This decline reflects an unfavorable mix of sales, particularly in some
of our emerging markets, and higher costs associated with the scale up of
production of advanced protection devices. We expect gross profit margin to be
higher for the remaining quarters of fiscal 2000. Selling and administrative
expense decreased to 27.2% of revenues, reflecting spending controls and
productivity improvements. The prior year's first quarter ratio of 29% included
expenses related to acquisitions and reengineering charges associated with our
enterprise-wide business systems upgrade program ("Genesis"). Investment in
research and development was 6.3% of revenues in the current quarter, which was
about the same as last year.
Operating income increased 10% from last year's first quarter. Operating margin
was 14.2%, which is about the same as last year.
Net interest expense was about $4 million higher than the prior year, due to
additional borrowings to fund prior year acquisitions. Other income, net was
about $1 million higher than last year. Other income, net included the impact of
a favorable patent settlement in the current quarter, which was partially offset
by the absence in the current quarter of one-time items recorded in the prior
year.
The first quarter income tax rate was 26%, compared with the prior year's rate
of 19%, which included a favorable $7 million tax judgment in Brazil. We expect
our tax rate for the full year to be about 26%.
Net income and diluted earnings per share were about the same as last year.
Prior year earnings benefited from the favorable tax judgment in Brazil, which
increased earnings per share by three cents. The impact of unfavorable foreign
currency translation reduced diluted earnings per share for the current quarter
by an estimated one cent.
Financial Condition
- -------------------
During the first three months of 2000, cash provided by operating activities
increased to $121 million compared to $87 million during the first three months
of last year. This increase reflects more stringent cash management policies and
lower build-up of inventories compared with the prior year's first quarter
largely due to Year 2000-related sales activity. Capital expenditures during the
first three months were $67 million, slightly ahead of last year's amount of $62
million. We expect capital spending for fiscal 2000 to be about $350 million,
reflecting increased investment in additional manufacturing capacity for
advanced protection devices. Capitalized software represents expenditures
associated with the Genesis program.
As of December 31, 1999, total debt of $1.6 billion represented 46.3% of total
capital (shareholders' equity, net non-current deferred income tax liabilities,
and debt), higher than 42.2% a year ago due to additional borrowings to fund
acquisitions. Because of our strong credit
11
<PAGE>
rating, we believe we have the capacity to arrange additional borrowings should
the need arise.
At its November 1999 meeting, the Board of Directors increased our quarterly
dividend from $.085 to $.0925 per common share.
Year 2000 Update
- ----------------
We designed and implemented a company-wide Year 2000 plan to ensure that our
computer equipment and software and devices with date-sensitive embedded
technology would be Year 2000-compliant. In other words, we wanted to ensure
that this equipment and software and these devices would be able to distinguish
between the year 1900 and the year 2000 and would function properly with respect
to all dates, whether in the twentieth or twenty-first centuries.
Based upon our identification, assessment, remediation and testing efforts, we
believe we completed all modifications to and replacements of our computer
equipment and software that are necessary to avoid any potential Year 2000-
related disruptions or malfunctions that were identified. To date, we have not
experienced any major disruptions to our business nor are we aware of any
significant Year 2000-related disruptions impacting our customers and suppliers.
We will continue to monitor our critical systems over the next few months, as
well as those of our suppliers and customers, for any Year-2000 related
exposures.
As of December 31, 1999, we have incurred approximately $17 million in costs
related to our Year 2000 project, which has been, and will continue to be,
funded through operating cash flows. We do not anticipate any additional
significant costs related to our plan. None of our other information technology
projects have been delayed or deferred as a result of the implementation of the
plan.
We believe we effectively anticipated and resolved any potential Year 2000
issues affecting us and our products, as well as those of third-party suppliers,
in a timely manner. We cannot assure you, however, that Year 2000 issues will
not materially and adversely affect our results of operations, cash flows or
relationships with third parties in the event that
. we have not properly identified our Year 2000 issues or the potential
business disruption among third parties with whom we conduct
significant business, or
. our compliance assessment, remediation and testing activities, and our
deployment of product upgrades have not effectively addressed all
relevant Year 2000 issues affecting us and our products.
In addition, disruptions in the economy generally resulting from Year 2000
issues also could materially and adversely affect us. At this time, we cannot
reasonably estimate the amount of potential liability and lost revenue that
would be reasonably likely to result from the failure by us and certain key
third parties to achieve Year 2000 compliance on a timely basis.
Costs of our plan and our belief that we have completed each of the phases of
the plan are based upon management's best estimates, which rely upon numerous
assumptions regarding future events, including the continued availability of
certain resources, third-party remediation plans,
12
<PAGE>
and other factors. These estimates, however, may prove not to be accurate, and
actual results could differ materially from those anticipated. Factors that
could result in material differences include, without limitation, the
availability and cost of personnel with the appropriate training and experience,
the ability to identify, assess, remediate and test all devices, relevant
computer codes and embedded technology, and similar uncertainties. In addition,
Year 2000-related issues may lead to possible third-party claims, the impact of
which we cannot yet estimate. We cannot assure you that the aggregate cost of
defending and resolving such claims, if any, would not have a material adverse
effect on us.
Adoption of New Accounting Standards
- ------------------------------------
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This Statement requires that all
derivatives be recorded in the balance sheet as either an asset or liability
measured at fair value and that changes in fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. In June 1999, the
FASB issued SFAS No. 137, which deferred the effective date of SFAS No. 133. As
a result, we will be adopting the provisions of this Statement no later than our
first quarter of fiscal 2001. We are in the process of evaluating this Statement
and have not yet determined the future impact on our consolidated financial
statements.
Forward-Looking Statements
- --------------------------
This interim report on Form 10-Q may contain certain forward looking statements
(as defined under Federal securities laws) regarding the performance of Becton,
Dickinson and Company ("BD"), including future revenues, products and income,
which are based upon current expectations of BD and are subject to a number of
business risks and uncertainties. Actual results could vary materially from
anticipated results described in any forward-looking statement. Factors that
could cause actual results to vary materially include, but are not limited to,
competitive factors, changes in regional, national or foreign economic
conditions, changes in interest or foreign currency exchange rates, delays in
product introductions, litigation, Year 2000 issues, and changes in health care
or other governmental regulation, as well as other factors discussed herein and
in other of BD's filings with the Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
----------------------------------------------------------
There have been no material changes in information reported since the
fiscal year ended September 30, 1999.
13
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings.
-----------------
We are involved, both as a plaintiff and a defendant, in various legal
proceedings which arise in the ordinary course of business, including
product liability and environmental matters.
As described more fully in our 1999 annual report on Form 10-K, we,
along with a number of other manufacturers, have been named as a
defendant in approximately 335 product liability lawsuits related to
natural rubber latex that have been filed in various state and Federal
courts. Cases pending in Federal court are being coordinated under the
matter In re Latex Gloves Products Liability Litigation (MDL Docket
No. 1148) in Philadelphia, and analogous procedures have been
implemented in the state courts of California, Pennsylvania and New
Jersey. We are vigorously defending these lawsuits.
Also as discussed in our 1999 Annual Report on Form 10-K, we have been
named as a defendant in eleven product liability lawsuits relating to
health care workers who allegedly sustained accidental needle sticks,
but have not become infected with any disease. Another manufacturer
and several medical product distributors also have been named as
defendants in most of these cases. The cases have been filed on behalf
of an unspecified number of health care workers in eleven different
states seeking class action certification under the laws of these
states.
On January 13, 2000, in the matter of Usrey v. Becton, Dickinson and
Company, et al. (Case No. 342-173329-98, Tarrant County District
Court), filed in Texas court on April 9, 1998, the Court signed an
order conditionally granting plaintiffs' motion for class
certification on behalf of certain Texas healthcare workers, subject
to modification and alteration under Texas procedural law. Under Texas
law, the order is subject to an immediate appeal, and any trial in the
matter is stayed pending appeal. An appeal from the order was filed on
February 1, 2000 and we will otherwise continue to vigorously defend
this matter.
On January 13, 2000, in the matter of Benner v. Becton, Dickinson and
Company, et al., originally filed on June 1, 1999 in Supreme Court of
the State of New York (Case No. 99-111372) and removed to federal
court on July 1, 1999 (No. 99 Civ. 4785, United States District Court,
Southern District of New York), the Court granted our motion to
dismiss the plaintiff's complaint for failure to state a cause of
action. The Benner matter was an action seeking class action
certification on behalf of certain New York healthcare workers
alleging that syringes and other medical devices were defectively
designed. The Court dismissed the complaint without prejudice, giving
the plaintiff twenty-one days within which to file an amended
complaint, which has been stayed subject to further court order.
To date no other class has been certified in these cases. Generally,
these actions
14
<PAGE>
allege that health care workers have sustained needle sticks using
hollow-bore needle devices manufactured by us and, as a result,
require medical testing, counseling and/or treatment.
In our opinion, the results of the above matters, individually and in
the aggregate, are not expected to have a material effect on our
results of operations, financial condition or cash flows.
Item 2. Changes in Securities and Use of Proceeds.
-----------------------------------------
Not applicable.
Item 3. Defaults Upon Senior Securities.
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Not applicable.
Item 5. Other Information.
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
a) Exhibits
27 - Financial Data Schedule.
b) Reports on Form 8-K
During the three-month period ended December 31, 1999, we filed
three Current Reports on Form 8-K under Item 5 - Other Events:
(i) In a report dated October 13, 1999, we announced that our
Chief Financial Officer was leaving to pursue other
interests.
(ii) In a report dated October 29, 1999, we announced that in
the Usrey matter, the Court had advised that it believed
that it was appropriate to address the issues in the case
by way of a class action.
(iii) In a report dated November 4, 1999, we announced our
results for the quarter and year ended September 30, 1999.
15
<PAGE>
SIGNATURE
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.
Becton, Dickinson and Company
-----------------------------
(Registrant)
Date February 14, 2000
------------------
/s/ Richard M. Hyne
-----------------------------
Richard M. Hyne
Vice President and Controller
(Principal Financial and Accounting Officer)
16
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description Method of Filing
- -------------------------------------------------------------
27 Financial Data Schedule Filed with
this report
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> DEC-31-1999
<CASH> 70,936
<SECURITIES> 663
<RECEIVABLES> 790,952
<ALLOWANCES> 0<F1>
<INVENTORY> 666,396
<CURRENT-ASSETS> 1,702,639
<PP&E> 2,969,062
<DEPRECIATION> 1,526,333
<TOTAL-ASSETS> 4,491,641
<CURRENT-LIABILITIES> 1,354,662
<BONDS> 953,433
0
45,890
<COMMON> 332,662
<OTHER-SE> 1,426,663
<TOTAL-LIABILITY-AND-EQUITY> 4,491,641
<SALES> 859,164
<TOTAL-REVENUES> 859,164
<CGS> 449,951
<TOTAL-COSTS> 449,951
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 22,301
<INCOME-PRETAX> 101,749
<INCOME-TAX> 26,455
<INCOME-CONTINUING> 75,294
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 75,294
<EPS-BASIC> 0.30
<EPS-DILUTED> 0.29
<FN>
<F1>THESE ITEMS ARE CONSOLIDATED ONLY AT YEAR-END
</FN>
</TABLE>
