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 September 30, 1996
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 001-10109
BECKMAN INSTRUMENTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-104-0600
(State of Incorporation) (I.R.S. Employer
Identification No.)
2500 Harbor Boulevard, Fullerton, California 92834
(Address of principal executive offices) (Zip Code)
(714) 871-4848
(Registrant's telephone number including area code)
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 ( ).
APPLICABLE ONLY TO CORPORATE ISSUERS:
Outstanding shares of common stock, $0.10 par value, as
of October 14, 1996: 29,005,073 shares.
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Earnings
for the three and nine month periods ended
September 30, 1996 and 1995
Condensed Consolidated Balance Sheets as
of September 30, 1996 and December 31, 1995
Condensed Consolidated Statements of Cash
Flows for the nine month periods ended
September 30, 1996 and 1995
Notes to Condensed Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes In Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security-
Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
BECKMAN INSTRUMENTS, INC.
THIRD QUARTER REPORT
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in Millions, Except Amounts Per Share)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $252.8 $229.9 $742.8 $665.5
Operating costs and expenses:
Cost of sales 117.8 106.9 346.3 312.1
Selling, general and
administrative 77.7 73.1 234.7 212.1
Research and development 26.1 22.9 78.1 67.0
Restructuring charge - 4.1 - 10.6
------ ------ ------ ------
221.6 207.0 659.1 601.8
------ ------ ------ ------
Operating income 31.2 22.9 83.7 63.7
Nonoperating income (expense):
Interest income 1.9 1.7 4.6 4.1
Interest expense (4.4) (3.8) (12.0) (9.6)
Other, net (0.8) 0.2 0.4 (0.7)
------ ------ ------ ------
(3.3) (1.9) (7.0) (6.2)
------ ------ ------ ------
Earnings before income taxes 27.9 21.0 76.7 57.5
Income tax provision 9.2 7.1 25.3 19.5
------ ------ ------ ------
Net earnings $ 18.7 $ 13.9 $ 51.4 $ 38.0
====== ====== ====== ======
Weighted average common shares and
common share equivalents - 28,706 28,691 28,999 28,730
(thousands)
Net earnings per share $ 0.65 $ 0.48 $ 1.77 $ 1.32
Dividends declared per share $ 0.13 $ 0.11 $ 0.39 $ 0.33
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
BECKMAN INSTRUMENTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
Unaudited
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
Assets
Current assets:
Cash and equivalents $ 13.8 $ 26.2
Short-term investments 7.9 8.2
Trade receivables and other 293.5 288.8
Inventories 204.8 166.2
Deferred income taxes 26.6 29.4
Other current assets 14.3 14.5
------ ------
Total current assets 560.9 533.3
Property, plant and equipment, net 254.8 252.1
Deferred income taxes 62.3 59.8
Other assets 75.2 62.6
------ ------
Total assets $953.2 $907.8
====== ======
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 22.3 $ 15.8
Accounts payable and accrued expenses 190.7 190.5
Income taxes 57.8 44.9
------ ------
Total current liabilities 270.8 251.2
Long-term debt, less current maturities 189.2 162.7
Other liabilities 129.3 146.0
------ ------
Total liabilities 589.3 559.9
------ ------
Stockholders' equity 363.9 347.9
------ ------
Total liabilities and stockholders'equity $953.2 $907.8
====== ======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
BECKMAN INSTRUMENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
Unaudited
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
---- ----
<S> <C> <C>
Cash Flows from Operating Activities
Net earnings $ 51.4 $ 38.0
Adjustments to reconcile net earnings to net
cash provided (used) by operating activities:
Depreciation and amortization 61.6 55.9
Net deferred income taxes - ( 1.7)
Changes in assets and liabilities:
Trade receivables and other ( 7.3) ( 1.8)
Inventories (40.1) (21.1)
Accounts payable and accrued expenses 9.0 (10.3)
Restructuring reserve ( 7.3) (17.7)
Accrued income taxes 12.9 6.6
Other (27.3) (20.2)
------ ------
Net cash provided
by operating activities 52.9 27.7
------ ------
Cash Flows from Investing Activities
Additions to property, plant and equipment (68.4) (70.4)
Net disposals of property, plant and equipment 8.0 9.3
Sales (purchases) of short-term investments 0.5 (7.8)
Purchases of long-term investments ( 3.0) (15.4)
------ ------
Net cash used by investing activities (62.9) (84.3)
------ ------
Cash Flows from Financing Activities
Dividends to stockholders (11.0) (9.3)
Proceeds from issuance of stock 13.0 10.3
Purchase of treasury stock (35.1) (12.3)
Notes payable borrowings, net 3.0 1.9
Long-term debt borrowings 126.8 39.7
Long-term debt reductions (99.1) -
------ ------
Net cash provided (used)
by financing activities ( 2.4) 30.3
------ ------
Decrease in cash and equivalents (12.4) (26.3)
Cash and equivalents -- beginning of period 26.2 44.2
------ ------
Cash and equivalents -- end of period $ 13.8 $ 17.9
====== ======
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest $ 10.9 $ 6.5
Income taxes $ 12.0 $ 14.9
Noncash investing and financing activities:
Purchase of equipment under capital
lease obligation $ 3.7 $ 5.6
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
BECKMAN INSTRUMENTS, INC.
Notes To
Condensed Consolidated Financial Statements
(Dollars in Millions, Except Amounts Per Share)
1 Report by Management
In the opinion of the Company, the accompanying unaudited
condensed consolidated financial statements reflect all
adjustments, consisting only of normal recurring accruals,
necessary for a fair presentation of the results for the periods.
The statements are prepared in accordance with the requirements
of Form 10-Q and do not include all disclosures required by
generally accepted accounting principles or those made in the
Annual Report on Form 10-K/A for 1995 which is on file with the
Securities and Exchange Commission.
The results of operations for the period ended September 30, 1996
are not necessarily indicative of the results to be expected for
the year ending December 31, 1996.
2 Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the
reported amounts of sales and expenses during the reporting
period. Actual results could differ from those estimates.
3 Stock-Based Compensation
The Company has adopted Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation." Accordingly, the
Company continues to follow the guidance of Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees." As
a result, compensation related to stock options is determined at the
grant date as the difference between the grant price and the fair
market value of the underlying common shares. Generally, the Company
issues stock options with a grant price equal to the fair market value
of the Company's common shares.
4 Earnings Per Share
Earnings per share is computed including the effect of common share
equivalents. Common share equivalents represent the dilutive effect
of outstanding stock options. Primary earnings per share approximates
fully diluted earnings per share.
5 Inventories
Inventories are comprised of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
Finished products $137.1 $117.7
Raw materials, parts and assemblies
and work in-process 67.7 48.5
------ ------
$204.8 $166.2
====== ======
6 Long-Term Debt
Effective June 1, 1996, the Company issued $100 debentures bearing an
interest rate of 7.05% due June 1, 2026. The debentures are
redeemable at the option of the holder on June 1, 2006. The Company
has the option to redeem the debentures at any time after June 1,
2006. Interest is payable semi-annually on June 1 and December 1.
Debt issuance costs of approximately $1.2 are being amortized to
interest expense over the term of the debentures.
7 Investments
Effective January 2, 1996, the Company acquired Hybritech
Incorporated, a San Diego-based life sciences and diagnostic company,
for a purchase price not material to the Company. The acquisition
expanded the Company's ability to develop and manufacture high
sensitivity immunoassays, including cancer tests. The acquisition was
accounted for as a purchase.
8 Contingencies
Litigation
As previously reported, the pubic prosecutor in Palermo (Sicily),
Italy is investigating the activities of officials at a local
government hospital and laboratory as well as representatives of the
principal worldwide companies marketing diagnostic equipment in
Palermo, including the Company's Italian subsidiary. The inquiry
focuses on past leasing practices for placement of diagnostic
equipment which were common industry-wide practices throughout Italy,
but now are alleged to be improper. The court hearings scheduled for
mid-September 1996 to allow the prosecutor to present evidence of
alleged improper conduct in order to persuade the Court to hold a
trial were delayed and results are not expected until November 1996.
The Company believes the evidence in the case is weak and insufficient
to support a criminal conviction.
The Company and its subsidiaries are involved in a number of lawsuits
which the Company considers normal in view of its size and the nature
of its business. The Company does not believe that any liability
resulting from any such lawsuits, or the matter described above, will
have a material adverse effect on its operations or financial
position.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Dollars in millions, except per share amounts)
Operations
Sales for the third quarter and nine month period ended September
30, 1996 were $252.8 and $742.8,an increase of $22.9 and $77.3 as
compared with the same periods from the prior year. Excluding
the impact of changes in foreign currency exchange rates, third
quarter sales were $29.9 higher compared to the same period in
1995 and the nine months reported sales were higher by about
$88.5 compared to last year. Sales for the North American
diagnostic business increased over the prior year. The North
American bioresearch business continues to be impacted by
decreased government funding. International diagnostic and
bioresearch sales for the first nine months continue to be higher
than the prior year despite unfavorable foreign currency impacts
in the current year. European markets continue to be impacted by
cost containment initiatives in several European health care
systems. International sales are expected to continue to be
impacted by weak markets, particularly in Europe.
Operating income for the third quarter and nine months ended
September 30, 1996 were $31.2 and $83.7, representing an increase
of 36.2% and 31.4% over the same periods in 1995. Operating
income in 1995 included a restructuring charge of $4.1 and $10.6
for the third quarter and nine months, respectively, related to
the reorganization and restructuring program completed in 1995.
Cost of sales for the third quarter and nine months increased
over the same period in the prior year, but are comparable as a
percent of sales. Selling, general and administrative expenses
in the third quarter and nine months of 1996 increased, compared
to the same period last year, but decreased slightly as a
percentage of sales. Research and development expenses increased
over the third quarter and first nine months of last year,
although only a slight increase as a percentage of sales.
The reorganization and restructuring plan announced in the fourth
quarter of 1993 has resulted in year-to-date 1996 savings of
about $38 which are mainly attributable to the reduction of more
than 1,400 personnel from 1993. The Company anticipates savings
from the restructuring program to be about $50 in 1996, but not
incremental to earnings due to certain transition costs, general
salary and cost increases, as well as fluctuating foreign
currencies.
Nonoperating expenses increased by $1.4 for the third quarter and
$0.8 for the first nine months compared to prior year.
Earnings before income taxes for the third quarter increased to
$27.9 from $21.0 in the third quarter of 1995 and the first nine
months increased to $76.7 from $57.5 in the prior year (1995
included a restructuring charge of $4.1 for the third quarter and
$10.6 for the first nine months). The effective tax rate
decreased to 33% from 34% in the prior year as a result of a
lower tax rate in the U.S. due to the utilization of foreign tax
credits.
Net earnings for the third quarter and first nine months of 1996
increased to $18.7 and $51.4 or $0.65 and $1.77 per share
compared to the corresponding amounts in 1995 of $13.9 and $38.0,
or $0.48 and $1.32 per share. Net earnings in 1995 included
aftertax restructuring charges of $2.6 ($0.10 per share) for the
third quarter and $6.9 ($0.25 per share) for the first nine
months.
Financial Condition
For the nine months ended September 30, 1996, the Company had
positive cash flow from operating activities of $52.9. This
represents an increase of $25.2 from the same period in 1995.
Contributing to the change were increased net earnings and a
decrease in restructuring expenditures.
For the nine months ended September 30, 1996, the Company had
negative cash flow from investing activities of $62.9,
representing a decrease in cash used of $21.4 over the same
period in 1995. This change primarily resulted from a slower
rate of additions to property, plant and equipment and fewer
purchases of equity investments in the current year.
The ratio of debt to capitalization at September 30, 1996 was
36.8% compared to 33.9% at December 31, 1995. The ratio of
current assets to current liabilities at September 30, 1996 of
2.1 is comparable to December 31, 1995. The Company believes it
has adequate financial resources to meet expected cash flow
requirements for the foreseeable future.
On September 12, 1996, the Company paid a quarterly cash dividend
of $0.13 per share of common stock for a total of $3.6. On
October 3, 1996, the Board of Directors declared a $0.13 per
share dividend payable on December 5, 1996.
On April 5, 1996, the Company filed a registration statement with
the SEC on Form S-3 which was subsequently declared effective by
the SEC, permitting the Company to issue up to $200 of debt
during the next two years. Effective June 1, 1996, the Company
issued $100 of debentures bearing an interest rate of 7.05% per
annum due June 1, 2026. The net proceeds of approximately $99
were used to pay down the Company's borrowings from its
commercial paper program.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported, the public prosecutor
in Palermo (Sicily), Italy is investigating the
activities of officials at a local government
hospital and laboratory as well as representatives
of the principal worldwide companies marketing
diagnostic equipment in Palermo, including the
Company's Italian subsidiary. The inquiry focuses
on past leasing practices for placement of
diagnostic equipment which were common industry-wide
practices throughout Italy, but now are alleged to
be improper. The court hearings scheduled for mid-
September 1996 to allow the prosecutor to present
evidence of alleged improper conduct in order to
persuade the Court to hold a trial were delayed
several weeks. Results from the hearings are not
expected until November, 1996. The Company believes
the evidence in the case is weak and insufficient to
support a criminal conviction.
Item 2. Changes In Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
10.1 Amendment 1996-1 to the Company's Incentive
Compensation Plan of 1990, dated October 11, 1996
and effective November 1, 1996 (a copy of the Plan
in its form prior to this amendment is filed as
Exhibit 10.20 of the Company's Annual Report to
the Securities and Exchange Commission on Form
10-K for the fiscal year ended December 31, 1992,
File No. 001-10109).
10.2 Amendment 1996-1 to the Company's Stock Option
Plan for Non-Employee Directors, dated October 11,
1996 and effective November 1, 1996 (a copy of
the Plan in its form prior to this amendment is
filed as Exhibit 10.19 of the Company's Annual
Report to the Securities and Exchange Commission
on Form 10-K for the fiscal year ended December 31,
1992, File No. 001-10109).
10.3 Amendment 1996-1 to the Company's Deferred
Directors' Fee Program, dated October 11, 1996
and effective November 1, 1996 (a copy of the
Program in its form prior to this amendment is
filed as Exhibit 10.21 of the Company's Annual
Report to the Securities and Exchange Commission
on Form 10-K for the fiscal year ended December 31,
1994, File No. 001-10109).
11. Statement re Computation of Per Share Earnings:
This information is set forth in Note 4 Earnings
Per Share of the Condensed Consolidated Financial
Statements included in Part I herein.
15. Independent Accountants' Review Report,
October 17, 1996
27. Financial Data Schedule
b) Reports on Form 8-K
None.
<PAGE>
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.
BECKMAN INSTRUMENTS, INC.
(Registrant)
Date: October 21, 1996
by /s/ William H. May
William H. May
Vice President, General
Counsel and Secretary
Date: October 21, 1996 by /s/ Dennis K. Wilson
Dennis K. Wilson
Vice President, Finance and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
FORM 10-Q, THIRD QUARTER, 1996
Exhibit
Number Description
- ------- -----------
10.1 Amendment 1996-1 to the Company's Incentive
Compensation Plan of 1990, dated October 11, 1996
and effective November 1, 1996 (a copy of the Plan
in its form prior to this amendment is filed as
Exhibit 10.20 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K for
the fiscal year ended December 31, 1992, File No.
001-10109).
10.2 Amendment 1996-1 to the Company's Stock Option
Plan for Non-Employee Directors, dated October 11,
1996 and effective November 1, 1996 (a copy of the
Plan in its form prior to this amendment is filed as
Exhibit 10.19 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K for
the fiscal year ended December 31, 1992, File No.
001-10109).
10.3 Amendment 1996-1 to the Company's Deferred
Directors' Fee Program, dated October 11, 1996 and
effective November 1, 1996 (a copy of the Program in
its form prior to this amendment is filed as Exhibit
10.21 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K for
the fiscal year ended December 31, 1994, File No.
001-10109).
11. Statement re Computation of Per Share Earnings:
This information is set forth in Note 4 Earnings Per
Share of the Condensed Consolidated Financial
Statements included in Part I herein.
15. Independent Accountants' Review Report, October 17, 1996
27. Financial Data Schedule
</TABLE>
EXHIBIT 10.1
AMENDMENT 1996-1
BECKMAN INSTRUMENTS, INC.
INCENTIVE COMPENSATION PLAN OF 1990
WHEREAS, Beckman Instruments, Inc. (the "Company") maintains
the Beckman Instruments, Inc. Incentive Compensation Plan of 1990
(the "Plan"); and
WHEREAS, the Company has the right to amend the Plan, and
the Company desires to amend the Plan to reflect recent
resolutions adopted by the Board of Directors;
NOW, THEREFORE, the Plan is hereby amended, effective as of
November 1, 1996, as follows:
1. The definition of "Committee" contained in Section 2 of
the Plan is amended to read as follows:
"'Committee' means the Board or a committee appointed
by the Board to administer this Plan, which committee shall
be comprised only of two or more directors or such greater
number of directors as may be required under applicable law,
each of whom in respect of any transaction at a time when
the affected Participant may be subject to Section 16 of the
Securities and Exchange Act of 1934 ('Exchange Act'), shall
be a 'Non-Employee Director' within the meaning of Rule 16b-
3(b)(3) under the Exchange Act. The Organization and
Compensation Committee may be this committee if it meets
these requirements."
2. The last sentence of Section 5(h) of the Plan is
amended to read as follows:
"Subject to the Committee's consent, the full payment
required under subparagraph (i) above may be made by
retention by the Company of Shares to be issued pursuant to
such option exercise with an aggregate Fair Market Value on
the date of exercise equal to the total exercise price for
the options being exercised."
3. Section 10 of the Plan is amended by deleting the
second sentence contained therein and by replacing it with the
following language:
"Any amendment that would (i) materially increase the
benefits accruing to Participants under this Plan, (ii)
materially increase the aggregate number of securities that
may be issued under this Plan, or (iii) materially modify
the requirements as to eligibility for participation in this
Plan, shall be subject to stockholder approval only to the
extent then required by Section 422 of the Code or
applicable law, or deemed necessary or advisable by the
Board. Without limiting any other express authority of the
Committee under but subject to the express limits of this
Plan, the Committee by agreement or resolution may waive
conditions of or limitations on Incentives that the
Committee in the prior exercise of its discretion has
imposed, without the consent of a Participant, and may make
other changes to the terms and conditions of Incentives that
do not affect in any manner materially adverse to the
Participant, his or her rights and benefits under an
Incentive. No amendment, suspension or termination of this
Plan or change of or affecting any outstanding Incentive
shall, without written consent of the Participant, affect in
any manner materially adverse to the Participant any rights
or benefits of the Participant or obligations of the Company
under any Incentive granted under this Plan prior to the
effective date of such change. Changes contemplated by
Section 3(b) shall not be deemed to constitute changes or
amendments for purposes of this Section 10."
4. The second sentence of Section 11 is amended by
replacing the semi-colon contained therein with a period and by
deleting the text after the word "practicable."
5. The Plan is amended by adding a new Section 13 at the
end thereof to read as follows:
"13. Plan Construction.
It is the intent of the Company that transactions in
and affecting Incentives in the case of Participants who are
or may be subject to Section 16 of the Exchange Act
("Section 16 Person") satisfy any then applicable
requirements of Rule 16b-3 so that such persons (unless they
otherwise agree) will be entitled to the benefits of Rule
16b-3 or other exemptive rules under Section 16 of the
Exchange Act in respect of those transactions and will not
be subjected to avoidable liability thereunder. If any
provision of this Plan or of any Incentive would otherwise
frustrate or conflict with the intent expressed above, that
provision to the extent possible shall be interpreted as to
avoid such conflict. If the conflict remains
irreconcilable, the Committee may disregard the provision if
it concludes that to do so furthers the interest of the
Company and is consistent with the purposes of this Plan as
to such persons in the circumstances."
IN WITNESS WHEREOF, the Company has caused its duly
authorized officer to execute this Amendment to the Plan on this
11th day of October, 1996.
BECKMAN INSTRUMENTS, INC.
By /s/ Fidencio M. Mares
Fidencio M. Mares
Its: Vice President - Human Resources
EXHIBIT 10.2
AMENDMENT 1996-1
BECKMAN INSTRUMENTS, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
WHEREAS, Beckman Instruments, Inc. (the "Company") maintains
the Beckman Instruments, Inc. Stock Option Plan for Non-Employee
Directors (the "Plan"); and
WHEREAS, the Company has the right to amend the Plan, and
the Company desires to amend the Plan to reflect recent
resolutions adopted by the Board of Directors;
NOW, THEREFORE, the Plan is hereby amended, effective as of
November 1, 1996, as follows:
1. The last sentence of Section 8 of the Plan is amended
by modifying the language after "(vi)" to read as follows:
"any provision requiring stockholder approval under any
provision of law or any requirement of the stock exchange on
which shares of Common Stock are then trading."
2. The Plan is amended by adding a new Section 11 at the
end thereof to read as follows:
"11. Plan Construction.
It is the intent of the Company that transactions in
and affecting options granted under this Plan satisfy any
then applicable requirements of Rule 16b-3 so that directors
(unless they otherwise agree) will be entitled to the
benefits of Rule 16b-3 or other exemptive rules under
Section 16 of the Securities and Exchange Act of 1934 in
respect of those transactions and will not be subjected to
avoidable liability thereunder. If any provision of this
Plan or of any option would otherwise frustrate or conflict
with the intent expressed above, that provision to the
extent possible shall be interpreted as to avoid such
conflict. If the conflict remains irreconcilable, the Board
may disregard the provisions if it concludes that to do so
furthers the interest of the Company and is consistent with
the purposes of this Plan as to such persons in the
circumstances."
IN WITNESS WHEREOF, the Company has caused its duly
authorized officer to execute this Amendment to the Plan on this
11th day of October, 1996.
BECKMAN INSTRUMENTS, INC.
By /s/ Fidencio M. Mares
Fidencio M. Mares
Its: Vice President - Human Resources
EXHIBIT 10.3
AMENDMENT 1996-1
BECKMAN INSTRUMENTS, INC.
DEFERRED DIRECTORS' FEE PROGRAM
WHEREAS, Beckman Instruments, Inc. (the "Company") maintains
the Beckman Instruments, Inc. Deferred Directors' Fee Program
(the "Plan"); and
WHEREAS, the Company has the right to amend the Plan, and
the Company desires to amend the Plan to reflect recent
resolutions adopted by the Board of Directors;
NOW, THEREFORE, the Plan is hereby amended, effective as of
November 1, 1996, as follows:
The Plan is amended by the following provision at the
end thereof:
"PLAN CONSTRUCTION
It is the intent of Beckman that this Plan satisfy and
be interpreted in a manner that satisfies the applicable
requirements of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 ('Exchange Act') so that elective
deferrals will be entitled to the benefits of Rule 16b-3 or
other exemptive rules under Section 16 of the Exchange Act
and will not be subjected to avoidable liability thereunder.
Any contrary interpretation shall be avoided."
IN WITNESS WHEREOF, the Company has caused its duly
authorized officer to execute this Amendment to the Plan on this
11th day of October, 1996.
BECKMAN INSTRUMENTS, INC.
By /s/ Fidencio M. Mares
Fidencio M. Mares
Its: Vice President - Human Resources
EXHIBIT 15
Peat Marwick LLP
Certified Public Accountants
Orange County Office
Center Tower
650 Town Center Drive
Costa Mesa, CA 92626
Independent Accountants' Review Report
The Stockholders and Board of Directors
Beckman Instruments, Inc.:
We have reviewed the condensed consolidated balance sheet of
Beckman Instruments, Inc. and subsidiaries as of September 30,
1996, and the related condensed consolidated statements of
earnings and cash flows for the three-month and nine-month periods
ended September 30, 1996 and 1995. These condensed consolidated
financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed consolidated
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Beckman
Instruments, Inc. and subsidiaries as of December 31, 1995, and
the related consolidated statements of operations and cash flows
for the year then ended (not presented herein); and in our report
dated January 19, 1996, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1995, is fairly stated, in all
material respects, in relation to the consolidated balance sheet
from which it has been derived.
/s/ KPMG Peat Marwick LLP
Orange County, California
October 17, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheet and the Condensed Consolidated Statement of
Earnings and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
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0
0
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