As filed with the Securities and Exchange Commission on
August 26, 1998.
Registration No.: 333-59471
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
FORM S-3/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933
BALLARD MEDICAL PRODUCTS
(Exact name of registrant as specified in its charter)
UTAH
(State or other jurisdiction of incorporation or organization)
87-0340144
(IRS Employer Identification Number)
12050 Lone Peak Parkway
Draper, Utah 84020
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
DALE H. BALLARD, President and Chief Executive Officer
BALLARD MEDICAL PRODUCTS
12050 Lone Peak Parkway
Draper, Utah 84020
(801) 572-6800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale
to the public:
August 31, 1998
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of
each class Proposed Proposed
of maximum maximum
securities Amount to offering aggregate Amount of
to be be price per offering registration
registered registered unit (1) price fee (2)
Common
Stock, $0.10
par value 1,067,733 $18.78 $20,052,025 $5,915
(1) Estimated solely for the purpose of calculating the
registration fee based upon the average of the high and low
prices of the Registrant's Common Stock quoted by the New York
Stock Exchange at August 24, 1998. Actual sales prices will be
based upon the market.
(2) The registration fee is calculated as follows:
Maximum aggregate offering price
($20,052,025) x .000295 = $5,915
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Total Number of Pages - 22
Index to Exhibits Appears on Page - 19
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BALLARD MEDICAL PRODUCTS
Cross-Reference Sheet
Between Items of Form S-3 and Prospectus
Pursuant to Item 501(b) of Regulation S-K
Registration Statement
Item and Heading Prospectus Heading
Item 1. Forepart of Registration Cover Page
Statement and Outside Front
Cover Page of Prospectus
Item 2. Inside Front and Outside Inside Cover Page
Back Cover Pages of
Prospectus
Item 3. Summary Information, Risk Prospectus Summary;
Factors, and Ratio of Risk Factors; other
Earnings to Fixed Charges information required
by Item 3 not
applicable
Item 4. Use of Proceeds Use of Proceeds
Item 5. Determination of Offering Not Applicable
Price
Item 6. Dilution Not Applicable
Item 7. Selling Security Holders Selling Stockholders
Item 8. Plan of Distribution Plan of Distribution
Item 9. Description of Securities Description of Capital
to be Registered Stock
Item 10. Interests of Named Experts Not Applicable
and Counsel
Item 11. Material Changes
(a) Material Changes
(b) Information
Incorporated by
Reference
Item 12. Incorporation of Certain Information
Information by Reference Incorporated by
Reference
Item 13. Disclosure of Commission Indemnification of
Position on Indemnification Directors and Officers
for Securities Act
Liabilities
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PROSPECTUS
1,067,733 Shares
BALLARD MEDICAL PRODUCTS
Draper, Utah 84020
COMMON STOCK
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE BEING OFFERED AND SOLD
FOR THE ACCOUNT OF CERTAIN STOCKHOLDERS OF THE COMPANY. SEE
"SELLING STOCKHOLDERS." THE SHARES OFFERED HEREBY ARE LISTED ON THE
NEW YORK STOCK EXCHANGE.
THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE A HIGH DEGREE OF
RISK. FOR A DISCUSSION OF MATERIAL RISKS IN CONNECTION WITH THE
PURCHASE OF THE COMMON STOCK OFFERED HEREBY, SEE "RISK FACTORS", P.
6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Underwriting
Price to Public Discounts and Proceeds to
(1) Commissions (2) Company
Per share $18.78 $.56 - 0 -
Total $20,052,025 $608,608 - 0 -
(1) Estimated solely for the purpose of calculating the
registration fee based upon the average of the high and low
prices on the New York Stock Exchange for Ballard Common Stock
on August 24, 1998. Actual sales prices will be based upon the
market.
(2) Estimated based upon an approximate 3% average commission
charged for market sales. Commissions will vary depending upon
denominations sold.
The date of this Prospectus is August 31, 1998.
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INTRODUCTION
The Company is subject to the informational reporting
requirements of the Securities Exchange Act of 1934, and in
accordance therewith, the Company files reports and other
information with the Securities and Exchange Commission. Such
reports and other information can be inspected and copied at the
public reference facilities of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional
offices at City Center, 500 West Madison, Suite 1400, Chicago, IL
60661-2511; 7 World Trade Center, Suite 1300, New York, NY 10046;
and 5670 Wilshire Boulevard, Los Angeles, CA 90036, and copies of
such material can be obtained from the Public Reference Section of
the Commission, Washington, D.C. 20549, at prescribed rates.
The Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding
registrants (such as the Company) that file electronically with the
Commission. The Commission's Web site address is as follows:
http://www.sec.gov. The Company's Common Stock is listed on the New
York Stock Exchange, 20 Broad Street, New York, NY 10005, and
reports and other information concerning the Company can be
inspected at such exchange.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of this
Prospectus is delivered, upon written or oral request of any such
person, a copy of any and all of the information that has been
incorporated by reference in this Prospectus (not including exhibits
to such information). Requests for such copies should be directed
to E. Martin Chamberlain, Secretary, Ballard Medical Products, 12050
Lone Peak Parkway, Draper, Utah 84020, telephone number (801) 572-
6800, telefax number (801) 523-5396.
No person has been authorized to give any information or make
any representations, other than those contained in this Prospectus,
and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offering in any state in which
such offering may not lawfully be made.
TABLE OF CONTENTS
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . 6
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 13
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . 13
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . 14
Description of Capital Stock . . . . . . . . . . . . . . . . . . 14
Indemnification of Directors and Officers . . . . . . . . . . . . 15
Information Incorporated by Reference . . . . . . . . . . . . . . 16
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the
detailed information appearing elsewhere in this Prospectus and by
the information and financial statements incorporated herein by
reference.
This Prospectus relates to 1,067,733 shares of Common Stock,
$0.10 par value of Ballard Medical Products (the "Company") issued
to the former shareholders of Tri-Med Specialties, Inc., a Kansas
corporation ("Tri-Med"). The Company has effected a stock-for-stock
exchange, by which shares of the Company were issued to all of the
shareholders of Tri-Med, in exchange for all of the outstanding
shares of stock of Tri-Med.
This is a secondary offering, made "at the market".
Accordingly, the offering does not involve an underwriting in the
conventional sense.
This prospectus sets forth information regarding risk factors
and other aspects of the Company's operations and this offering.
The Company's executive offices are located at 12050 Lone Peak
Parkway, Draper, Utah 84020, and its telephone number and telefax
number, respectively at that location are (801) 572-6800 and (801)
523-5396.
RISK FACTORS
From time to time the Company may report, through its press
releases, its Annual Report, and SEC filings, certain matters that
could be characterized as forward-looking statements subject to
risks and uncertainties that could cause actual results to differ
materially from those projected. Such risks and uncertainties may
include, among other things, the factors discussed below. Such
forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
COMPETITION. The medical device industry is characterized by
rapidly evolving technology and increased competition. There are a
number of companies that currently offer, or are in the process of
developing, products that compete with products offered by the
Company, including the Company's flagship TRACH CARE closed suction
catheter. Some of these competitors have substantially greater
capital resources, research and development staffs and experience in
the medical device industry. These competitors may succeed in
developing technologies and products that are more effective than
those currently used or produced by the Company or that would render
some products offered by the Company obsolete or noncompetitive.
Competition based on price is becoming an increasingly important
factor in customer purchasing patterns as a result of cost
containment pressures on, and consolidation in, the health care
industry. Such competition has exerted, and is likely to continue
to exert, downward pressure on the prices the Company is able to
charge for its products. The Company may not be able to offset such
downward price pressure through corresponding cost reductions.
Price reductions could have an adverse impact on the business,
results of operations, financial condition, or cash flows of the
Company.
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INTELLECTUAL PROPERTY RIGHTS. From time to time, the Company
has received, and in the future may receive, notices of claims with
respect to possible infringement of the intellectual property rights
of others or notices of challenges to the Company's intellectual
property rights. In some instances such notices have given rise to,
or may in the future give rise to, litigation. Any litigation
involving the intellectual property rights of the Company may be
resolved by means of a negotiated settlement or by contesting the
claim through the judicial process. There can be no assurance that
the business, results of operations or the financial condition of
the Company will not suffer an adverse impact as a result of
intellectual property claims that may be commenced against the
Company in the future. The Company owns certain patents and
proprietary information acquired while developing its products or
through acquisitions, and the Company is the licensee of certain
other technology. As patents expire, more competing products may be
released into the marketplace by other companies. The ability of
the Company to continue to compete effectively with other medical
device companies may be materially dependent upon the protection
afforded by its patents and the confidentiality of certain
proprietary information. There can be no assurance that patents
will be issued for products and product improvements recently
released into the marketplace or for products presently being
developed.
MANAGED CARE AND OTHER HEALTH CARE PROVIDER ORGANIZATIONS.
Managed care and other health care provider organizations have grown
substantially in terms of the percentage of the population in the
United States that receives medical benefits through such
organizations and in terms of the influence and control that they
are able to exert over an increasingly large portion of the health
care industry. These organizations are continuing to consolidate
and grow, increasing the ability of these organizations to influence
the practices and pricing involved in the purchase of medical
devices, including the products sold by the Company.
HEALTH CARE REFORM/PRICING PRESSURE. The health care industry
in the United States continues to experience change. Health care
reform proposals have been formulated by members of Congress. In
addition, state legislatures periodically consider various health
care reform proposals. Federal, state and local government
representatives will, in all likelihood, continue to review and
assess alternative health care delivery systems and payment
methodologies, and ongoing public debate of these issues can be
expected. Cost containment initiatives, market pressures and
proposed changes in applicable laws and regulations may have a
dramatic effect on pricing or potential demand for medical devices,
the relative costs associated with doing business and the amount of
reimbursement by both government and third-party payors. In
particular, the industry is experiencing market-driven reforms from
forces within the industry that are exerting pressure on health care
companies to reduce health care costs. These market-driven reforms
are resulting in industry-wide consolidation that is expected to
increase the downward pressure on product margins, as larger buyer
and supplier groups exert pricing pressure on providers of medical
devices and other health care products. Both short-term and long-
term cost containment pressures, as well as the possibility of
regulatory reform, may have an adverse impact on the Company's
results of operations and financial condition. The Company's
products
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consist primarily of disposable medical devices. Cost containment
pressures on hospitals are leading some facilities to use certain
disposable devices longer than they have been used in the past, even
longer than permitted by product labelling. This phenomenon could
result in a reduction in Company sales, because extended use and
device reuse mean fewer unit purchases.
GOVERNMENT REGULATION. There has been a trend in recent years,
both in the United States and outside the United States, toward more
stringent regulation of, and enforcement of requirements applicable
to, medical device manufacturers. The continuing trend of more
stringent regulatory oversight in product clearance and enforcement
activities has caused medical device manufacturers to experience
longer approval cycles, more uncertainty, greater risk and greater
expense. At the present time, there are no meaningful indications
that this trend will be discontinued in the near-term or the long-
term either in the United States or abroad. The Company expects to
continue to incur additional operating expenses associated with its
ongoing regulatory compliance program, but the amount of these
incremental costs cannot be completely predicted and will depend
upon a variety of factors, including future changes in statutes and
regulations governing medical device manufacturers. There can be no
assurance that such compliance requirements and quality assurance
programs will not have an adverse impact on the business, results of
operations or financial condition of the Company or that the Company
will not experience problems associated with FDA regulatory
compliance.
NEW PRODUCT INTRODUCTIONS. As the existing products of the
Company become more mature and its existing markets more saturated,
the importance of developing or acquiring new products will
increase. The development of any such products will entail
considerable time and expense, including research and development
costs and the time and expense required to obtain necessary
regulatory approvals, which could adversely affect the business,
results of operations or financial condition of the Company. There
can be no assurance that such development activities will yield
products that can be commercialized profitably, or that any product
acquisition can be consummated on commercially reasonable terms or
at all. Any failure to acquire or develop new products to
supplement more mature products could have an adverse impact on the
business, results of operations or financial condition of the
Company.
TECHNOLOGICAL CHANGE. The medical technology as utilized by
the Company has been subject to rapid advances. While the Company
feels that it currently possesses the technology necessary to carry
on its business, its commercial success will depend on its ability
to remain current with respect to such technological advances and to
retain experienced technical personnel. Furthermore, there can be
no assurance that other technological advances will not render the
Company's technology and certain products uneconomical or obsolete.
PRODUCT LIABILITY EXPOSURE. Because its products are intended
to be used in health care settings on patients who are
physiologically unstable and may also be seriously or critically
ill, the Company is exposed to potential product liability claims.
From time to time, patients using the Company's products have
suffered serious injury or death, which has led to product liability
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claims against the Company. Some product liability claims have
been inherited by the Company through business acquisitions.
The Company maintains product liability coverage in the amount
of $5,000,000 through Medmarc, 4000 Legato Road, Suite 800, Fairfax,
Virginia. This is a claims made policy, with a deductible of
$15,000 per occurrence and $75,000 aggregate maximum per year. The
Company maintains excess liability coverage in the amount of
$10,000,000 through American International Group Specialty Lines,
Inc., 70 Pine Street, New York, New York. The Company deems this
coverage sufficient for its business. However, there can be no
assurance that such coverage will ultimately prove to be adequate,
or that such coverage will continue to remain available on
acceptable terms or any terms at all.
ACQUISITIONS. In order to continue increasing sales volume and
profits, the Company relies heavily on a program of acquiring
business and new product lines from other companies. There is
always a significant risk that a given acquisition by the Company
will prove to be unsuccessful or end up not contributing
sufficiently to sales and profit growth of the Company. There is
also a risk that undiscovered or contingent liabilities of an
acquired company could negatively impact the Company's financial
position or even the acquisition transaction itself. The
integration of any businesses that the Company might acquire could
require substantial management resources. The moving of acquired
product lines can also result in interruptions in production and
backorders. There can be no assurance that any such integration
will be accomplished without having a short or potentially long-term
adverse impact on the business, results of operations or financial
condition of the Company or that the benefits expected from any such
integration will be fully realized.
From time to time the Company issues its own common stock in
order to acquire other companies. Such increases in the number of
outstanding Company shares could have a dilutive effect on the
Company's earnings per share and on the Company's book value per
share depending upon several factors including: (1) the
profitability of the acquired company; (2) the number of shares of
Company common stock issued for the acquisition; and (3) whether the
transaction can be treated as a pooling of interests. The issuance
of Company common stock for material acquisitions could also result
in large blocks of Company stock being held by new voting groups and
could therefore have an effect on the voting control of the Company.
The Company prefers whenever possible to use its stock, rather
than cash, to acquire other companies and intends to continue this
acquisition policy.
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The Company continues to devote substantial management
resources to looking for additional companies and product lines to
acquire. At almost any given point in time, the Company is in the
process of a preliminary review of various potential target
companies, or involved in more comprehensive due diligence, or
involved in preliminary or final negotiations for the acquisition.
INTANGIBLES. As of June 30, 1998, $39,551,050 (18.4%) of the
Company's assets consisted of intangible assets (cost in excess of
purchase price and patents and other intangibles) net of
amortization. $27,143,134 of these intangible assets represents the
difference between the purchase price paid by the Company for
various acquisitions, minus the fair market value of tangible assets
purchased. The approximate amount of amortization expense related
to intangibles per year is $3,040,000, and this of course reduces
net income. There can be no assurance that assets, businesses, and
product lines purchased through acquisitions will retain their
value. If such acquired assets were to lose value, corresponding
goodwill included in intangibles may have to be written off all at
once, resulting in a possible significant charge to earnings and
earnings per share. The Company periodically reviews its intangible
assets for impairment.
DIVIDENDS. Prior to January, 1990, no dividends had been paid
by the Company on its shares of Common Stock. The Company has paid
dividends since January, 1990. However, there can be no assurance
that dividends will be paid on shares in the future, particularly
since the Company prefers to reserve its cash and liquid assets for
growth and possible business acquisitions.
UNCERTAINTY OF FINANCIAL RESULTS AND CAPITAL NEEDS. There may
be substantial fluctuations in the Company's results of operations
because of the timing and recording of revenues and market
acceptance of existing Company products. The ability of the Company
to expand its manufacturing and marketing operations cannot be
predicted with certainty. If revenues do not continue to increase
as rapidly as they have in the past few years, or if manufacturing,
marketing, or research and development are not successful or require
more money than is anticipated, the Company may have to scale back
product marketing, development and production efforts and attempt to
obtain external financing. There can be no assurance that the
Company would be able to obtain timely external financing in the
amounts required or that such financing, if available, would be on
terms advantageous to the Company.
SUPPLY OF RAW MATERIALS. Certain of the Company's products are
dependent upon raw materials for which there are few sources. So
far, the Company has not had any serious problems obtaining needed
raw materials.
IMPACT OF CURRENCY FLUCTUATIONS; IMPORTANCE OF FOREIGN SALES.
Because certain sales of products by the Company outside the United
States typically are denominated in local currencies, the results of
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operations of the Company are expected to continue to be affected by
changes in exchange rates between certain foreign currencies and the
United States Dollar. There can be no assurance that the Company
will not experience currency fluctuation effects in future periods,
which could have an adverse impact on its business, results of
operation or financial condition. The operations and financial
results of the Company also may be significantly affected by other
international factors, including changes in governmental regulations
or import and export restrictions, and foreign economic and
political conditions generally.
The Company's ability to continue to sell products into Europe
is dependent to a large extent on its ability to maintain the
important ISO 9001/EN 4601 certification and the CE marking of
conformity. If the Company were to lose such certifications, such
loss would have a material, adverse impact on international sales
and profits.
For the nine months ending June 30, 1998, international sales
($12,594,976) were 11.3% of the total year to date sales of the
Company. Foreign sales are generally denominated in U.S. currency.
POSSIBLE VOLATILITY OF STOCK PRICE. The market price of the
Company's stock is, and is expected to continue to be, subject to
significant fluctuations in response to variations in quarterly
operating results, trends in the health care industry in general and
the medical device industry in particular, and certain other factors
beyond the control of the Company. In addition, broad market
fluctuations, as well as general economic or political conditions
and initiatives, may adversely impact the market price of the
Company's stock, regardless of the Company's operating performance.
YEAR 2000 ISSUES. The Year 2000 Issue is the result of
potential problems with computer systems or any equipment with
computer chips that use dates where the date has been stored as just
two digits (e.g., 97 for 1997). On January 1, 2000, any clock or
date recording mechanism, including date sensitive software, which
uses only two digits to represent the year, may recognize a date
using 00 as the year 1900 rather than the year 2000. The Company
has also been advised that some computer chips may not have the
ability to function properly when reading certain dates in calendar
year 1999 (e.g., 9/9/99). These computer problems could result in a
system failure or miscalculations causing disruption of operations,
including among other things, a temporary inability to process
transactions, send invoices, or engage in similar activities.
There are several elements of the Company's Year 2000
preparations:
1. INFORMATION TECHNOLOGY ("IT") SYSTEMS. The Company
determined some months ago that it is required to replace or convert
portions of its business application software (materials management,
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resource planning, accounts payable, invoicing, accounts receivable,
general ledger, payroll, etc.) so that its computer systems will
properly recognize and utilize dates beyond December 31, 1999. The
Company began implementation of this conversion early in August,
1998, and the Company plans to complete the conversion process for
remaining applications by the middle of October, 1998.
Another aspect of the Company's IT systems is Electronic Data
interchange ("EDI"). The Company shares information with a number
of outside parties (including certain customers and certain vendors)
via EDI. Earlier this year, the Company made all necessary
modifications so that its EDI capabilities are prepared for the year
2000.
2. NON-IT SYSTEMS. Non-IT systems include embedded
technology such as microcontrollers. The Company has determined
that it has approximately 85 to 95 pieces of equipment with such
embedded technology. The Company is in the process of requesting
and receiving information from various equipment manufacturers to
determine whether repairs or replacements are needed. As to
approximately one-third of such machines so far, the Company has
either completed needed repairs or has received information
verifying that no repairs are needed. The Company plans to complete
assessment and repair of non-IT systems by the end of December,
1998.
3. THIRD PARTIES. It is critical to the Company's readiness
for the Year 2000 that third parties with whom the Company deals are
also prepared. Such third parties include utility companies, banks
(and the Federal Reserve), suppliers, vendors, customers, and
shippers.
The Company is only in the early stages of assessing the Year
2000 readiness of such third parties. The Company intends to, but
has not yet, sent questionnaires to third parties to certify their
Year 2000 compliance.
The Company has retained an outside consultant to assist and
advise the Company through a comprehensive, step by step approach to
achieving Year 2000 readiness. The written plan to accomplish this
important goal outlines 450 tasks, of which the Company has
completed only 83. However, the Company is committed to completing
all 450 tasks and achieving Year 2000 readiness well in advance of
mid-1999.
The most reasonably likely worst case Year 2000 scenarios
include a possible inability: (1) to receive power required for
operation of the Company's facilities; (2) to access funds or make a
payroll, because of the Company's banking connections or the Federal
Reserve being unprepared; (3) to order and receive needed raw
materials because of a vendor's or the Company's own systems being
non-Year 2000 compliant; (4) to receive, and fill, or ship customer
orders because of a customer's, shipper's, or the Company's own
systems being non-Year 2000 compliant; or (5) to meet production
needs because of the non-Year 2000 compliance of its own IT and/or
non-IT systems.
The Company has not yet started to develop contingency plans
for such worst-case scenarios. The Company intends to create such
contingency plans in the future only if any of such problems appear
to be a real possibility as the Year 2000 comes closer.
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The Company will continue to utilize internal and external
resources to implement, reprogram, or replace and test software and
related assets affected by the Year 2000 Issue. The Company hopes
to complete the majority of its efforts in this area by early 1999
leaving adequate time to assess and correct any significant issues
that may materialize. The total cost of the Year 2000 project is
estimated at $500,000 to $600,000 and is being funded through
operating cash flows. The Company will be able to capitalize new
purchases of software and hardware portions of this cost. Thus far
the Company has spent approximately $25,000 on Year 2000
remediation.
The costs of the project and the timetable in which the Company
plans to complete the Year 2000 compliance requirements are based on
management's best estimates, which were derived utilizing numerous
assumptions of future events including the continued availability of
certain resources, third party modification plans and other factors.
However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from these
plans. Specific factors which might cause such material differences
include, but are not limited to, the availability and cost of
personnel trained in this area, the ability to locate and correct
all relevant computer chip codes, and similar uncertainties.
The Company periodically updates its current Year 2000 status
on its website at www.bmed.com.
USE OF PROCEEDS
Since this is a secondary offering in behalf of four
stockholders, no proceeds of the offering will be received directly
by the Company.
SELLING STOCKHOLDERS
The table set forth below describes the selling stockholders
and their ownership of the shares being registered hereby:
Number of
Company Shares
Owned as of the
Name of Seller Date Hereof
C. Phillip Pattison 320,319
Kevin R. Dye 320,319
Barry J. Marshall 106,776
William A. Fry 320,319
Total shares 1,067,733
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None of the above-named shareholders is an officer, director or
affiliate of the Company. Other than the shares being registered
hereby, such shareholders own no shares of Ballard Medical Products
stock.
PLAN OF DISTRIBUTION
Shares sold hereunder will be sold by the selling stockholders
for their own accounts. The Company will receive none of the
proceeds from any sale of the shares.
The selling stockholders may sell shares from time to time in
one or more transactions (which may include block trades) on the New
York Stock Exchange, in negotiated transactions or through a
combination of such methods for sale, at fixed prices, which may be
changed, at market prices prevailing at the time of sale, at prices
related to such prevailing prices or at negotiated prices. The sell-
ing stockholders may effect such transactions by selling the shares
to or through broker-dealers, who may receive compensation in the
form of discounts, concessions or commissions from the selling
stockholders or the purchaser for whom such broker-dealers may act
as agent or to whom they may sell as principal, or both (which
compensation as to a particular broker-dealer may be in excess of
customary compensation).
The selling shareholders and any broker-dealers buying the
shares from, or effecting transactions in the shares on behalf of,
the selling stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act, and any compensation and
discounts received by such broker-dealers and any profits on the
resale of the shares by such broker-dealers may be deemed to be
underwriters' discounts and commissions under the Securities Act.
This offering is made on a continuous, delayed basis pursuant
to Reg. Sec. 230.415, promulgated by the Securities and Exchange
Commission under the Securities Act.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of
75,000,000 Common Shares authorized, $0.10 par value, of which
30,454,233 shares were outstanding as of August 24, 1998. The
holders of Common Stock are entitled to one vote for each share held
of record on all matters submitted to a vote of shareholders,
including the election of directors. Holders of Common Stock are
entitled to receive ratably such dividends as may be declared by the
Board of Directors out of funds legally available therefor. In the
event of a liquidation, dissolution or winding up of the Company,
holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities. Holders of Common Stock
have no preemptive rights to purchase additional shares and have no
rights to convert their Common Stock into any other securities. All
of the outstanding shares of Common Stock are fully paid and non-
assessable. Shareholders do not have cumulative voting rights.
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
The revised Utah Business Corporation Act permits
indemnification of the officers and directors of a corporation. The
Company may indemnify any officer or director against liability
incurred in any threatened, pending, or completed action, suit or
proceeding (whether civil, criminal, administrative or
investigative, and whether formal or informal), if: (a) his or her
conduct was in good faith; and (b) he or she reasonably believed
that his or her conduct was in, or not opposed to, the corporation's
best interest; and (c) in the case of any criminal proceeding, he or
she had no reasonable cause to believe his or her conduct was
unlawful. The determination as to whether in a specific case
indemnification of a director or officer is permissible (i.e.,
whether the director or officer has met the above applicable
standard of conduct), is generally to be made by the Board of
Directors by a majority vote. The Company may not indemnify a
director or officer: (1) in connection with a proceeding by or in
the right of the Company in which the director or officer was
adjudged liable to the Company; or (2) in connection with any other
proceeding charging that the director or officer derived an improper
personal benefit, whether or not involving action in his or her
official capacity, in which proceeding he or she was adjudged liable
on the basis that he or she derived an improper personal benefit.
Indemnification permitted in connection with a proceeding by or in
the right of the Company is limited to reasonable expenses incurred
in connection with the proceeding.
The Company is required to indemnify a director or officer who
is successful, on the merits or otherwise, in the defense of any
proceeding, or in the defense of any claim, issue or matter in the
proceeding, to which he or she was a party because he or she is or
was a director of the Company, against reasonable expenses incurred
in connection with the proceeding or claim with respect to which he
or she has been successful. The Company may purchase and maintain
liability insurance on behalf of directors, officers, employees,
fiduciaries, and agents of the Company, whether or not the Company
would have power to indemnify them against liability.
The general effect of the Bylaws of the Company under which any
director or officer of the Company is insured or indemnified in any
manner against liability which he or she may incur in his or her
capacity as a director or officer is set forth in Article VIII of
the Company's Bylaws, which contains provisions almost identical to
the provisions of Utah Code Annotated, Section 16-10a-901 et seq.,
summarized above. In addition, in November, 1993, the Board of
Directors authorized and directed the Company to enter into (and the
Company has executed) an Indemnification Agreement with each
director and executive officer of the Company, by which the Company
is contractually obligated to indemnify directors and officers in
accordance with the standards, terms, and conditions of Article VIII
of the Company's Bylaws.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the revised Utah Business
Corporation Act and the Amended and Restated Bylaws of the Company,
the Company has been informed that in the opinion of the Securities
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and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore
unenforceable.
INFORMATION INCORPORATED BY REFERENCE
1. The Company's Report on Form 10-K for the fiscal year
ended September 30, 1997, filed with the Commission on December 15,
1997, as amended and restated by the Company's Current Report on
Form 8-K, filed with the Commission on July 14, 1998 (as further
amended and restated by the Company's Current Report on Form 8-K/A,
filed with the Commission on July 20, 1998).
2. The Description of Common Stock contained in the Company's
Registration of Securities on Form 8-A pursuant to Section 12(b) of
the Securities Exchange Act of 1934, filed with the Commission on
September 3, 1993.
3. The Company's Proxy Statement and Annual Report for the
Annual Meeting held January 26, 1998, filed with the Commission on
December 12, 1997.
4. The Company's Quarterly Report on Form 10-Q/A, for the
quarter ended December 31, 1997, filed with the Commission on July
10, 1998.
5. The Company's Current Report on Form 8-K, filed with the
Commission on March 10, 1998.
6. The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998, filed with the Commission on May 15,
1998.
7. The Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, filed with the Commission on August 14,
1998.
In addition, all documents filed subsequent to the date hereof
by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Securities Exchange Act of 1934, prior to the filing of a post-
effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Prospectus
and to be part hereof from the date of filing such documents.
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an itemized statement of all estimated
expenses to be incurred by the Company in connection with the
issuance and distribution of the securities to be registered hereby,
other than commissions:
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Registration fees -SEC $5,915
Transfer agents fees (1) 12,810
Costs of printing and copying 100
Accounting fees 8,000
Long distance telephone charges 150
Total $26,975
(1) Estimated, based upon assumed 2,135 number of certificates to
be reissued.
No part of these expenses will be borne by the selling
stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The general effect of Utah's indemnification statute and the
Company's indemnification bylaw are set forth in Part I,
"Indemnification of Directors and Officers".
ITEM 16. EXHIBITS.
See "Index to Exhibits".
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement, to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering;
(4) That for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrants's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof:
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(5) To deliver or cause to be delivered with the prospectus,
to each person to whom the prospectus is sent or given, the latest
annual report to securities holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting
the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information; and
(6) That insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
an action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Ballard Medical Products, a corporation organized and
existing under the laws of the State of Utah, certifies that it has
reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Draper, State of Utah, on this 20th
day of July, 1998.
BALLARD MEDICAL PRODUCTS
By: Dale H. Ballard, President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons
in the capacities indicated and on the date indicated.
Date: Signature: Title:
8/26/98 Dale H. Ballard President,
Chief Executive Officer
Chairman of the Board
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8/26/98 Kenneth R. Sorenson Principal Financial
Officer
8/26/98 Leland H. Boardman Controller
8/26/98 Dale H. Ballard, Jr. Director
8/26/98 E. Martin Chamberlain, Jr. Director
8/26/98 Paul W. Hess Director
EXHIBITS
Exhibit
Number Description of Exhibit Page No.
1 Not applicable
2 Not applicable
4.1 Restated Certificate Incorporated by
of Incorporation, dated reference from
September 18, 1987 July 10, 1991
Form S-8
Registration Statement
Exhibit 4.1
Registration
No. 33-41720
4.2 Articles of Amendment, Incorporated by
to Articles of reference from
Incorporation dated Exhibit 4.2 to the
July 10, 1991 Registration
Statement on
Form S-3, filed
November 13, 1991,
Registration
No. 33-4391
4.3 Articles of Amendment, Incorporated by
to Articles of reference from
Incorporation dated Exhibit 4.3 to the
September 21, 1993 Registration
Statement on
Form S-8, filed
December 20, 1993
Registration
No. 33-73194
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4.4 Amended and Incorporated by
Restated Bylaws of reference from
Ballard Medical Exhibit 3.3 to
Products, dated Form 10-K filed
October 12, 1992 December 24, 1992
5 Opinion of Counsel Incorporated by
reference from
Exhibit 5 to
July 20, 1998
Form S-3
Registration Statement
No. 333-59471
8 Not applicable
12 Not applicable
15 Not applicable
23.1 Consent of Deloitte & 21
Touche LLP (Salt Lake
City, Utah)
23.2 Consent of 22
PricewaterhouseCoopers
LLP (Kansas City,
Missouri)
23.3 Consent of counsel Incorporated by
(contained in reference from
Exhibit 5) July 20, 1998
Form S-3
Registration Statement
No. 333-59471
24 Not applicable
25 Not applicable
26 Not applicable
27 Amended and Restated Incorporated by
Financial Data Schedules reference from
Exhibit 27 to
July 20, 1998
Form S-3
Registration Statement
No. 333-59471
28 Not applicable
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1
to Registration Statement No. 333-59471 of Ballard Medical Products
on of our reports dated November 13, 1997 (February 25, 1998 as to
Note 12) (which expresses an unqualified opinion and includes an
explanatory paragraph relating to the Company's change in its method
of accounting for investment securities to conform with Statement of
Financial Accounting Standards No. 115) and July 14, 1998 appearing
in the Current Report on Form 8-K/A dated July 17, 1998 of Ballard
Medical Products.
Salt Lake City, Utah
August 26, 1998
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EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Pre-Effective
Amendment No. 1 to the Registration Statement on Form S-3/A of
Ballard Medical Products of our report dated January 30, 1998, on
our audits of the financial statements of Tri-Med Specialties, Inc.
as of September 30, 1997 and 1996 and the year ended September 30,
1997 which report is included in Ballard Medical Products' Current
Report on Form 8-K/A filed with Securities and Exchange Commission
on July 20, 1998.
Kansas City, Missouri PricewaterhouseCoopers LLP
August 26, 1998
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