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, 1994
Commission File Number 1-1136
BRISTOL-MYERS SQUIBB COMPANY
(Exact name of registrant as specified in its charter)
Delaware 22-079-0350
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
345 Park Avenue, New York, N.Y. 10154
(Address of principal executive offices)
Telephone: (212) 546-4000
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 [ ]
At June 30, 1994, there were 504,757,695 shares outstanding of the
Registrant's $.10 par value Common Stock.
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BRISTOL-MYERS SQUIBB COMPANY
INDEX TO FORM 10-Q
JUNE 30, 1994
Page No.
--------
Part I - Financial Information:
Condensed Consolidated Balance Sheet - June 30, 1994
and December 31, 1993 2 - 3
Condensed Consolidated Statement of Earnings for the three
months and six months ended June 30, 1994 and 1993 4
Condensed Consolidated Statement of Cash Flows for the six
months ended June 30, 1994 and 1993 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations 6 - 11
Part II - Other Information 12 - 14
Signatures 15
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BRISTOL-MYERS SQUIBB COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET - ASSETS
(Unaudited, in millions of dollars except share amounts)
June 30, December 31,
1994 1993
---------- ------------
Current Assets:
Cash and cash equivalents $ 2,200 $ 2,421
Time deposits and marketable securities 450 308
Receivables 1,847 1,859
Finished goods 799 741
Work in process 217 239
Raw and packaging materials 400 342
------- -------
Inventories 1,416 1,322
Prepaid expenses 731 660
------- -------
Total Current Assets 6,644 6,570
------- -------
Property, Plant and Equipment 5,445 5,236
Less: Accumulated depreciation 1,996 1,862
------- -------
3,449 3,374
------- -------
Insurance Recoverable 974 1,000
Other Assets 1,149 1,157
------- -------
Total Assets $12,216 $12,101
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BRISTOL-MYERS SQUIBB COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET -
LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited, in millions of dollars except share amounts)
June 30, December 31,
1994 1993
---------- ------------
Current Liabilities:
Short-term borrowings $ 221 $ 177
Accounts payable 619 649
Accrued expenses 1,538 1,550
U.S. and foreign income taxes payable 797 689
------- -------
Total Current Liabilities 3,175 3,065
Product Liability 1,311 1,370
Other Liabilities 1,124 1,138
Long-Term Debt 636 588
------- -------
Total Liabilities 6,246 6,161
------- -------
Stockholders' Equity:
Preferred stock, $2 convertible series:
Authorized 10 million shares; issued and
outstanding 23,443 in 1994 and 25,798 in
1993, liquidation value of $50 per share - -
Common stock, par value of $.10 per share:
Authorized 1.5 billion shares; issued
532,702,368 in 1994 and 532,688,458 in 1993 53 53
Capital in excess of par value of stock 344 353
Cumulative translation adjustments (285) (332)
Retained earnings 7,621 7,243
------- -------
7,733 7,317
Less cost of treasury stock -
27,944,673 common shares in 1994 and
20,782,281 in 1993 1,763 1,377
------- -------
Total Stockholders' Equity 5,970 5,940
------- -------
Total Liabilities and Stockholders' Equity $12,216 $12,101
======= =======
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BRISTOL-MYERS SQUIBB COMPANY
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited, in millions of dollars except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1994 1993 1994 1993
------ ------ ------ ------
Net Sales $2,970 $2,802 $5,804 $5,558
------ ------ ------ ------
Expenses:
Cost of products sold 742 717 1,486 1,458
Marketing, selling, administrative
and other 846 769 1,532 1,430
Advertising and product promotion 339 338 654 655
Research and development 271 274 532 533
------ ------ ------ ------
2,198 2,098 4,204 4,076
------ ------ ------ ------
Earnings Before Income Taxes 772 704 1,600 1,482
Provision for Income Taxes 230 183 477 387
------ ------ ------ ------
Net Earnings $ 542 $ 521 $1,123 $1,095
====== ====== ====== ======
Earnings per share of common stock $ 1.07 $ 1.01 $2.21 $2.12
====== ====== ===== =====
Average common shares outstanding
(in millions) 507 517 509 517
=== === === ===
Dividends per share of common stock $.73 $.72 $1.46 $1.44
==== ==== ===== =====
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BRISTOL-MYERS SQUIBB COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions of dollars)
Six Months Ended
June 30,
--------------------
1994 1993
------- --------
Cash Flows From Operating Activities:
Net earnings $1,123 $1,095
Depreciation and amortization 160 154
Other operating items (6) 8
Receivables 2 115
Inventories (84) 16
Prepaid expenses (23) -
Accounts payable (21) (28)
Accrued expenses (15) (67)
Income taxes 101 (113)
Other liabilities (75) (171)
------ ------
Net Cash Provided by Operating Activities 1,162 1,009
------ ------
Cash Flows From Investing Activities:
Proceeds from sales of time deposits and
marketable securities 24 874
Purchases of time deposits and marketable securities (167) (992)
Additions to fixed assets (239) (228)
Proceeds from sale of business 83 -
Other, net (12) (43)
------ ------
Net Cash Used in Investing Activities (311) (389)
------ ------
Cash Flows From Financing Activities:
Short-term borrowings 40 (127)
Long-term debt 37 407
Issuances of common stock under stock plans 14 18
Purchases of treasury stock (409) (151)
Dividends paid (745) (744)
------ ------
Net Cash Used in Financing Activities (1,063) (597)
------ ------
Effect of Exchange Rates on Cash (9) (5)
------ ------
(Decrease)/Increase in Cash and Cash Equivalents (221) 18
Cash and Cash Equivalents at Beginning of Period 2,421 2,137
------ ------
Cash and Cash Equivalents at End of Period $2,200 $2,155
====== ======
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BRISTOL-MYERS SQUIBB COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(in millions of dollars, except per share amounts)
Basis of Presentation
- - ---------------------
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements include all adjustments (consisting only
of normal adjustments) necessary for a fair presentation of the financial
position of Bristol-Myers Squibb Company (the "Company") at June 30, 1994
and December 31, 1993, the results of operations for the three and six
months ended June 30, 1994 and 1993, and cash flows for the six months
ended June 30, 1994 and 1993. These condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the related notes included in the Company's 1993 Annual
Report to Stockholders.
Second Quarter Results of Operations
- - ------------------------------------
Sales
- - -----
Worldwide sales for the second quarter of 1994 increased 6% over the prior
year to $2,970. The consolidated sales growth resulted from a 6% increase
due to volume, a 1% increase due to selling prices and a decrease of 1%
due to the unfavorable effect of foreign currency translation. Domestic
sales increased 11%, while international sales remained at prior year
levels (an increase of 3% excluding the unfavorable effect of foreign
currency translation). Sales from businesses divested in 1993 and early
1994 further reduced reported sales growth by 2% for the quarter.
Worldwide sales for the second quarter of 1993 increased 2% compared to
the second quarter of 1992 reflecting a 2% increase due to selling prices,
a 1% increase due to volume and a decrease of 1% due to the unfavorable
effect of foreign currency translation.
Industry Segments
- - -----------------
Net Sales % Change
------------------ ------------------
Three Months Ended Three Months Ended
------------------ ------------------
6/30/94 6/30/93 6/30/94 6/30/93
------- ------- ------- -------
Pharmaceutical Products $1,756 $1,562 12% (1%)
Medical Devices 413 427 (3%)(a) 4%
Nonprescription Health Products 473 474 - 10%
Toiletries and Beauty Aids 328 339 (3%)(a) 7%
------ ------
Total Company $2,970 $2,802 6% 2%
====== ======
(a) Excluding the effect of businesses divested in the fourth quarter of 1993
and early 1994, sales of medical devices increased 4%, and sales of
toiletries and beauty aids increased 1%.
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Sales of the pharmaceutical products segment, which is the largest segment
at 59% of total company sales, increased 12% over the second quarter of
1993 to $1,756. Sales growth resulted from a 14% increase due to volume,
offset by a 2% decrease due to the unfavorable effect of foreign currency
translation. Changes in selling prices had no effect on sales growth for
the quarter. Domestic sales were particularly strong, increasing 25%.
Excluding the unfavorable effect of foreign currency translation,
international sales increased 3%. Sales of cardiovascular drugs, the
largest product group in the segment, increased 13% to $694. Captopril,
an angiotensin converting enzyme (ACE) inhibitor sold primarily under the
trademark CAPOTEN*, is the Company's largest selling product. Sales of
captopril increased 7% to $381 benefitting from new indications for the
treatment of diabetic nephropathy and left ventricular dysfunction.
Strong increases in sales of PRAVACHOL*, the Company's newer
cholesterol-lowering agent, and MONOPRIL*, a second generation ACE
inhibitor with once-a-day dosage, also contributed to the growth of
cardiovascular drug sales. These increases were partially offset by
decreases in sales of CORGARD*, the patent for which expired in the U.S.
in September 1993. Anti-infective drug sales were $360 compared to $368
in the prior year. Strong increases in sales of CEFZIL*, an oral
cephalosporin used in the treatment of respiratory infections, were more
than offset by declines in sales of the Company's broad spectrum
penicillins, AZACTAM*, VIDEX* and in AMIKIN*, which is experiencing
generic competition. In June 1994, ZERIT*, a new antiretroviral agent to
treat persons with advanced HIV disease, received marketing approval by
the U.S. Food and Drug Administration. The Company's line of anti-cancer
agents was the fastest growing product group in the segment, strengthening
the Company's leadership position in cancer therapy. Sales of TAXOL* were
very strong. In April 1994, TAXOL* received approval for use in the
treatment of breast cancer after failure of combination chemotherapy for
metastatic disease or relapse within six months of adjuvant chemotherapy;
in late 1992, TAXOL* was initially approved for treatment of patients with
ovarian cancer whose first-line or subsequent chemotherapy has failed.
Sales of PLATINOL* and PARAPLATIN* also showed strong domestic growth.
These increases were partially offset by decreases in sales of VEPESID*,
the patent for which expired in the U.S. in November 1993. Sales of
central nervous system drugs increased due to strong volume growth of
BUSPAR*, the Company's novel anti-anxiety agent, and STADOL NS*, a
prescription nasal spray analgesic. Dermatological drug sales increased
due to the introductory sales of DOVONEX*, a vitamin D3 analogue for the
treatment of moderate psoriasis. During the second quarter of 1994, the
Company acquired an equity stake in one of Germany's major generic
pharmaceutical companies, Azupharma GmbH, a subsidiary of GEHE AG,
Europe's largest pharmaceutical wholesaler. The Company signed a
definitive agreement effective July 31, 1994 to sell Squibb Diagnostics,
its diagnostic contrast media and radiopharmaceuticals businesses, to
Bracco S.p.A. The Company will continue manufacturing certain diagnostic
products, including PROHANCE* and ISOVUE*, and nuclear medicine products.
The Company also will act as Bracco's distributor in Canada. For the
second quarter of 1993, sales of the pharmaceutical products segment were
1% below prior year levels as increases in sales of anti-infective,
anti-cancer and central nervous system drugs were more than offset by
decreases in sales of cardiovascular drugs.
* Indicates brand names of products which are registered trademarks owned
by the Company.
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<PAGE>
In the medical devices segment, sales decreased 3% to $413. Excluding the
sales of Edward Weck Incorporated, which was divested in the fourth
quarter of 1993, and Xomed-Treace, Inc., which was divested in April 1994,
sales increased 4%, reflecting a 3% increase due to volume, a 2% increase due
to selling prices and a 1% decrease due to the unfavorable effect of foreign
currency translation. Sales of ostomy care products increased due to the
growth of the ACTIVE LIFE/COLODRESS* and the SUR-FIT/COMBIHESIVE* product
lines. Worldwide sales of prosthetic implants increased primarily due to
growth overseas and the continued success in the U.S. of the Insall/Burstein
II Modular Total Knee System, the MGII* Total Knee System and the CENTRALIGN*
Precoat Hip Prosthesis. In the Company's line of wound care products, sales
increased reflecting strong volume growth of DUODERM* products. For the
second quarter of 1993, medical devices segment sales increased 4% over the
second quarter of the prior year primarily due to growth of prosthetic
implants, ostomy and wound care products.
Sales of the nonprescription health products segment of $473 remained at prior
year levels as a 3% increase due to selling prices was offset by a 3% decrease
due to volume. Sales of infant formulas were above prior year levels as
increases in LACTOFREE*, a milk-based, lactose-free infant formula, and
ENFAPRO*, a follow-on formula for older babies, more than offset decreases in
other brands. Sales of analgesics increased due to worldwide growth of
EXCEDRIN* and strong sales of BUFFERIN* in Japan. In July 1994, the Company
proposed to acquire the remaining shares of the UPSA Group, a world leader in
effervescence technology, specializing in medications for the treatment of
pain. The Company has held a significant minority stake in the French
research-based company since 1990. For the second quarter of 1993,
nonprescription health products segment sales increased 10% over the second
quarter of the prior year primarily as a result of increases in sales of
ENFAMIL* and PROSOBEE* infant formulas.
Sales of the toiletries and beauty aids segment decreased 3% from the prior
year to $328. Excluding the sales of the beauty appliance division of
Clairol, which was divested in the fourth quarter of 1993, sales increased 1%
reflecting a 4% increase due to selling prices, a 2% decrease due to the
unfavorable effect of foreign currency translation and a 1% decrease due to
volume. Sales of the Company's haircoloring products increased primarily due
to growth of NICE 'N EASY* and LASTING COLOR BY LOVING CARE* in the U.S.
Increases in these products were partially offset by decreases in sales of
BAN* deodorants and anti-perspirants primarily due to increased competition in
the U.S. In August 1994, the Company acquired Matrix Essentials, Inc., a
leading manufacturer of professional hair care and beauty products sold
exclusively in beauty salons. For the second quarter of 1993, sales of the
toiletries and beauty aids segment increased 7% over the second quarter of the
prior year primarily due to growth of haircloring and skin care products.
Cost of Products Sold and Operating Expenses
- - --------------------------------------------
Total costs and expenses for the quarters ended June 30, 1994 and 1993 as a
percentage of sales were 74.0% and 74.9%, respectively. Cost of products sold
decreased to 25.0% of sales from 25.6% in 1993, principally due to favorable
product mix and the divestiture of businesses with higher cost of products
sold. As a percentage of sales, marketing, selling, administrative and other
expenses increased to 28.5% compared to 27.4% in 1993. Marketing, selling,
administrative and other expenses in the second quarter of 1994 increased as a
percentage of sales compared to the first quarter of 1994 reflecting a similar
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trend in the timing of expenses as experienced in prior years.
Expenditures for advertising and promotion in support of new and existing
products were $339, approximately at prior year levels. Research and
development expenses were $271 compared to $274 in 1993, and as a
percentage of sales were 9.1% compared to 9.8% in 1993. Pharmaceutical
research and development spending decreased slightly from prior year
levels and, as a percentage of pharmaceutical sales, was 13.4% compared to
15.3% in 1993.
Earnings
- - --------
Earnings before income taxes for the second quarter increased 10% to $772
from $704 in 1993, as pretax margins improved to 26.0% from 25.1%
reflecting the Company's ongoing commitment to contain costs. The
effective tax rate for the period increased to 29.8% from 26.1% in 1993
due to changes approved in the Omnibus Budget Reconciliation Act of 1993
which included curtailment of certain tax benefits from Puerto Rico
operations. As a result, net earnings increased 4% to $542 from $521.
Earnings per share increased 6% to $1.07 from $1.01 in 1993, in part the
result of average common shares outstanding of 507 million in 1994
compared to 517 million in 1993.
Year-to-Date Results of Operations
- - ----------------------------------
Sales
- - -----
Worldwide sales for the first six months of 1994 increased 4% over the
prior year to $5,804. The consolidated sales growth resulted from a 4%
increase due to volume, a 2% increase due to selling prices, offset by a
2% decrease due to the unfavorable effect of foreign currency translation.
Domestic sales increased 7%, and international sales increased 1% (4%
excluding the unfavorable effect of foreign currency translation). Sales
from businesses divested in 1993 and early 1994 further reduced reported
sales growth by 2%. Worldwide sales for the first six months of 1993
increased 3% compared to the prior year, reflecting a 2% increase due to
volume, a 2% increase due to selling prices, offset in part by a 1%
decrease due to the unfavorable effect of foreign currency translation.
Industry Segments
- - -----------------
Net Sales % Change
------------------ ------------------
Six Months Ended Six Months Ended
------------------ ------------------
6/30/94 6/30/93 6/30/94 6/30/93
------- ------- ------- -------
Pharmaceutical Products $3,432 $3,142 9% 4%
Medical Devices 830 838 (1%)(a) 3%
Nonprescription Health Products 933 948 (2%) 2%
Toiletries and Beauty Aids 609 630 (3%)(a) 2%
------ ------
Total Company $5,804 $5,558 4% 3%
====== ======
(a) Excluding the effect of businesses divested in the fourth quarter of
1993 and early 1994, sales of medical devices increased 5%, and sales
of toiletries and beauty aids increased 2%.
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Sales of the pharmaceutical products segment increased 9% to $3,432,
reflecting a 10% increase due to volume, a 1% increase due to selling prices
and a 2% decrease due to the unfavorable effect of foreign currency
translation. Domestic sales were particularly strong, increasing 18%.
Excluding the unfavorable effect of foreign currency translation,
international sales increased 3%. Cardiovascular drug sales of $1,375 were
13% above prior year levels. Sales of CAPOTEN* increased 6% to $755 despite
increasing competition in the ACE inhibitor market. PRAVACHOL* and
MONOPRIL* also reported strong worldwide increases. Sales of
anti-infectives decreased as strong growth of CEFZIL* was more than offset
by declines in broad spectrum penicillins, AZACTAM*, VIDEX* and AMIKIN*.
Increases in sales of anti-cancer drugs were very strong, primarily due to
the continued growth of TAXOL*. Sales of the Company's central nervous
system drugs increased, reflecting strong growth of BUSPAR* and STADOL NS*.
For the first six months of 1993, sales of the pharmaceutical products
segment increased 4% over the first six months of the prior year primarily
as a result of increases in sales of anti-cancer and central nervous system
drugs.
Sales of the medical devices segment decreased 1% to $830. Excluding the
sales of divested businesses, sales increased 5% with a 3% increase due to
volume and a 2% increase due to selling prices. Increases in sales of the
SUR-FIT/COMBIHESIVE* and the ACTIVE LIFE/COLODRESS* product lines led to the
increase in sales of ostomy care products. Worldwide sales of prosthetic
implants increased due to growth overseas and continued success in the U.S.
of the Insall/Burstein II Modular Total Knee System, the MG II* Total Knee
System and the CENTRALIGN* Precoat Hip Prosthesis. Increased sales of wound
care products resulted from the success of the DUODERM* product line. For
the first six months of 1993, medical devices segment sales increased 3%
over the first six months of the prior year primarily as a result of sales
growth in prosthetic implants, ostomy and wound care products.
In the nonprescription health products segment, sales decreased 2% to $933,
reflecting a 4% decrease due to volume, a 1% decrease due to the unfavorable
effect of foreign currency translation, offset in part by a 3% increase due
to selling prices. Sales of infant formulas increased primarily due to
LACTOFREE*, ENFAMIL* and ENFAPRO*. These increases were more than offset by
decreases in sales of analgesics and cough/cold remedies, which were
adversely affected by increased competition in the U.S. For the first six
months of 1993, nonprescription health products segment sales increased 2%
over the first six months of the prior year primarily due to increased sales
of infant formulas, adult nutritional products and cough/cold remedies.
Sales of the toiletries and beauty aids segment decreased 3% to $609.
Excluding the sales of the Clairol beauty appliance business, sales
increased 2% above prior year levels reflecting a 4% increase due to selling
prices, a 1% decrease due to volume and a 1% decrease due to the unfavorable
effect of foreign currency translation. Sales growth of the Company's
haircoloring products was led by NICE 'N EASY*, LASTING COLOR BY LOVING
CARE* and ULTRESS*. Increases in sales of skin care products primarily
resulted from the introduction of several new products in the SEA BREEZE*
line in the U.S. These increases were offset in part by decreased sales of
BAN* anti-perspirants and deodorants, particularly as a result of increased
competition in the U.S. For the first six months of 1993, sales of the
toiletries and beauty aids segment increased 2% over the first six months of
the prior year primarily due to increases in sales of haircoloring and skin
care products.
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Cost of Products Sold and Operating Expenses
- - --------------------------------------------
Total costs and expenses for the six months ended June 30, 1994 as a
percentage of sales decreased to 72.4% from 73.3% for the same period of
1993. Cost of products sold decreased to 25.6% of sales from 26.2% in
1993 primarily as a result of favorable product mix and the divestiture of
businesses with higher cost of sales. Marketing, selling, administrative
and other expenses, as a percentage of sales, were 26.4% compared to 25.7%
in 1993. Expenditures for advertising and promotion in support of new and
existing products were $654, which approximates prior year levels.
Research and development expenses remained almost constant with the prior
year at $532, and as a percentage of sales were 9.2% in 1994 and 9.6% in
1993. Pharmaceutical research and development spending was approximately
at prior year levels and as a percentage of pharmaceutical sales was 13.4%
as compared to 14.7% in 1993.
Earnings
- - --------
Earnings before income taxes for the first six months increased 8% to
$1,600 from $1,482 in 1993, and pretax margins increased to 27.6% from
26.7%. The effective tax rate for the period increased to 29.8% compared
to 26.1% in 1993 due to changes approved in the Omnibus Budget
Reconciliation Act of 1993. As a result, net earnings increased 3% to
$1,123 from $1,095 and earnings per share increased 4% to $2.21 from $2.12
in 1993.
Financial Position
- - ------------------
The balance sheet at June 30, 1994 and the statement of cash flows for the
six months then ended reflect the Company's strong financial position.
The Company continues to maintain a high level of working capital totaling
$3,469 at June 30, 1994. Internally generated funds continue to be the
Company's primary source for financing expenditures for new plant and
equipment. Additions to fixed assets for the six months ended June 30,
1994 were $239 compared to $228 during the same period of 1993.
During the six months ended June 30, 1994, the Company repurchased
7,547,100 shares of its common stock at a total cost of $409.
Reference is made to Part II, Item 1 - Legal Proceedings in which
developments are described for various lawsuits, claims and proceedings in
which the Company is involved.
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BRISTOL-MYERS SQUIBB COMPANY
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
- - --------------------------
Various lawsuits, claims and proceedings of a nature considered normal to
its business are pending against the Company and certain of its
subsidiaries. The most significant of these are reported in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1993,
and material developments in such matters are described below. Reference
is also made to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994.
Breast Implant Litigation
- - -------------------------
The number of plaintiffs who have commenced lawsuits against the Company,
its subsidiary, Medical Engineering Corporation ("MEC"), and certain other
subsidiaries in the actions filed in federal and state courts and in
certain Canadian provincial courts by recipients of polyurethane covered
breast implants and smooth walled breast implants is now approximately
15,000.
The court has preliminarily approved the settlement agreement entered into
by the Company, other defendants and certain plaintiffs regarding all
pending and future breast implant product liability claims brought in the
United States against certain defendants, including the Company, MEC and
certain other subsidiaries. The court fixed a deadline of June 17, 1994
for claimants to opt out of the settlement and extended the deadline to
June 30 for certain claimants. A hearing will be held August 18, 1994
with respect to final approval of the settlement. Any such final approval
will be subject to appeal.
The court has stated that as of August 3, 1994, approximately 14,400 women
had elected to opt out of the settlement entered into by the Company and
other defendants. Of these, approximately 7,800 are United States
residents, of whom approximately 5,000 reside in Texas, and approximately
6,600 are non-residents of the United States. The court is permitting
women who have elected to opt out to opt back into the settlement.
The Company has received preliminary and incomplete information concerning
the number of claimants against it and certain subsidiaries who have
elected to opt out of the settlement. The Company believes that when the
total number of such claimants who have opted out is known and their
claims are analyzed, an additional charge to earnings may be required
which could have a material effect on the Company's operating results for
the year, but not on the Company's liquidity or consolidated financial
position.
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<PAGE>
Patent Proceedings
- - ------------------
The Court of Appeals for the Federal Circuit denied the Company's petition
that the Court reconsider its decision that the United States District
Court for the District of New Jersey had erred in finding that the
cefadroxil product of Zenith Laboratories, Inc., would infringe the
Company's patent for cefadroxil monohydrate. The Company intends to file
a petition for a writ of certiorari with the United States Supreme Court.
Infant Formula Matters
- - ----------------------
Certain indirect purchasers of infant formula have filed two additional
state court actions in Nevada and Alabama, respectively, against the
Company, its subsidiary, Mead Johnson & Company, and Abbott Laboratories,
alleging a price fixing conspiracy and seeking certification of a
statewide class, damages and other relief. The Company and the other
defendants are seeking leave to appeal a Texas intermediate appellate
court's reversal of the trial court's dismissal of an amended class action
complaint. A Michigan trial court dismissed the portion of an indirect
purchaser's complaint that alleged violations of the state consumer
protection act. The Pennsylvania Attorney General's office has notified
the Company that it has closed its investigation of one of the Company's
subsidiaries. The Canadian Bureau of Competition Policy gave notice that
it had begun a criminal inquiry into the activities of the Canadian Infant
Formula Association and its members, including a subsidiary of the
Company. While it is not possible to determine the outcome of the
foregoing and of other pending matters, the Company believes that the
ultimate disposition of such matters will not have a material adverse
effect on the Company's operating results, liquidity or consolidated
financial position.
Pharmaceutical Pricing Litigation
- - ---------------------------------
In the federal multi-district litigation, motions to dismiss have been
denied, defendants have filed answers to the consolidated and coordinated
complaints, and discovery has commenced. The court has set a February
1996 trial date. Additional complaints have been filed in several federal
District Courts on behalf of certain individual pharmacies against the
Company and other pharmaceutical manufacturers. These cases involve
factual allegations substantially similar to those made in the previously
filed individual federal actions and have been or presumably will be
coordinated for pretrial purposes with the other actions in the
multi-district proceeding. The cases pending in California state courts
have been coordinated for pretrial purposes in San Francisco, and the
court has set a schedule contemplating that trial will begin in November
1996. An additional action has been filed in California state court on
behalf of a purported class of consumers against the Company and others.
Two actions have been filed in Alabama state courts against the Company,
other pharmaceutical manufacturers and drug wholesalers, one of which is
brought on behalf of a purported class of Alabama retail pharmacies, the
other on behalf of purported classes of Alabama retail pharmacies and
consumers. Both Alabama state cases involve substantially similar factual
allegations as those made in the previously filed federal and state
actions. In Wisconsin, an action has been filed in state court seeking
recovery, on behalf of a class consisting of Wisconsin pharmacies, against
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<PAGE>
the Company, other pharmaceutical manufacturers and drug wholesalers
alleging price discrimination and a conspiracy to violate state antitrust
laws. While it is not possible to determine the outcome of the foregoing
and of other pending matters, the Company believes that their ultimate
disposition will not have a material adverse effect on the Company's
operating results, liquidity or consolidated financial position.
Item 6. Exhibits and Reports on Form 8-K
- - -----------------------------------------
(a) Exhibits (listed by number corresponding to the Exhibit Table of Item 601
in Regulation S-K).
NONE
(b) Reports on Form 8-K.
The Registrant did not file any reports on Form 8-K during the quarter
ended June 30, 1994.
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BRISTOL-MYERS SQUIBB COMPANY
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.
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
(Registrant)
Date August 15, 1994 /s/ Harrison M. Bains, Jr.
- - ----------------------------- -----------------------------
Harrison M. Bains, Jr.
Vice President and Treasurer
Date August 15, 1994 /s/ Frederick S. Schiff
----------------------------- -----------------------------
Frederick S. Schiff
Vice President and Controller
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