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 March 31, 2000
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 COULTER, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-104-0600
(State of Incorporation) (I.R.S. Employer
Identification No.)
4300 N. Harbor Boulevard, Fullerton, California 92834-3100
(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
May 1, 2000: 29,358,170 shares.
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of
Operations for the three month periods
ended March 31, 2000 and 1999
Condensed Consolidated Balance Sheets
as of March 31, 2000 and December 31, 1999
Condensed Consolidated Statements of
Cash Flows for the three month periods
ended March 31, 2000 and 1999
Notes to Condensed Consolidated
Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
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>
PART I
BECKMAN COULTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Millions, Except Amounts Per Share and Share Data)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
<S> <C> <C>
Sales $434.4 $405.1
Cost of sales 231.5 211.2
------ ------
Gross profit 202.9 193.9
Operating costs and expenses:
Selling, general and administrative 115.2 111.8
Research and development 40.9 38.8
------ ------
Total operating costs and
expenses 156.1 150.6
------ ------
Operating income 46.8 43.3
------ ------
Nonoperating (income) and expenses:
Interest income (1.4) (2.0)
Interest expense 18.6 18.2
Other, net (0.8) 2.0
------ ------
Total nonoperating expenses 16.4 18.2
------ ------
Earnings before income taxes 30.4 25.1
Income taxes 9.4 8.0
------ ------
Net earnings $ 21.0 $ 17.1
====== ======
Basic earnings per share $ 0.72 $ 0.60
Weighted average number of shares
outstanding (in thousands) 29,096 28,460
Diluted earnings per share $ 0.70 $ 0.58
Weighted average number of shares and
dilutive shares outstanding (in
thousands) 30,181 29,558
Dividends declared per share $ 0.16 $ 0.16
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
<PAGE>
BECKMAN COULTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Millions, Except Amounts per Share)
<TABLE>
<CAPTION>
March December
31, 31,
2000 1999
---- ----
Unaudited
<S> <C> <C>
Assets
Current assets:
Cash and equivalents $ 9.2 $ 34.4
Trade and other receivables 516.5 566.4
Inventories 346.5 313.1
Other current assets 55.0 52.5
-------- --------
Total current assets 927.2 966.4
Property, plant and equipment, net 295.7 305.9
Goodwill, less accumulated amortization of
$29.0 and $26.3 at March 31, 2000 and
December 31, 1999, respectively 342.0 344.7
Other intangibles, less accumulated
amortization of $51.6 and $46.8 at
March 31, 2000 and December 31, 1999
respectively 395.1 399.9
Other assets 69.2 93.9
-------- --------
Total assets $2,029.2 $2,110.8
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current maturities of
long-term debt $ 47.8 $ 50.0
Accounts payable, accrued expenses and
other liabilities 402.4 474.1
Income taxes 54.9 51.8
-------- --------
Total current liabilities 505.1 575.9
Long-term debt, less current maturities 958.1 980.7
Other liabilities 324.4 326.3
-------- --------
Total liabilities 1,787.6 1,882.9
-------- --------
Stockholders' equity:
Preferred stock, $0.10 par value;
authorized 10.0 shares; none issued - -
Common stock, $0.10 par value; authorized
75.0 shares; shares issued 29.3 and 29.1
at March 31, 2000 and December 31, 1999,
respectively; shares outstanding 29.3
and 29.0 at March 31, 2000 and December
31, 1999, respectively 2.9 2.9
Additional paid-in capital 135.0 134.5
Retained earnings 139.3 123.0
Accumulated other comprehensive loss:
Cumulative foreign currency translation
adjustment (35.6) (24.3)
Treasury stock, at cost - (8.2)
-------- --------
Total stockholders' equity 241.6 227.9
-------- --------
Total liabilities and stockholders'
equity $2,029.2 $2,110.8
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
BECKMAN COULTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Millions)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
<S> <C> <C>
Cash Flows from Operating Activities
Net earnings $ 21.0 $ 17.1
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 33.0 37.6
Net deferred income taxes 0.3 (0.6)
Proceeds from sales of sales-type lease
receivables 29.9 18.7
Changes in assets and liabilities:
Trade and other receivables 28.1 (33.4)
Inventories (37.6) (11.9)
Accounts payable, accrued expenses
and other liabilities (68.2) (33.4)
Income taxes payable 3.4 4.4
Other 6.2 16.5
------ ------
Net cash provided by operating
activities 16.1 15.0
------ ------
Cash Flows from Investing Activities
Additions to property, plant and equipment (37.1) (35.5)
Proceeds from sale of certain clinical
chemistry assets 12.0 -
Proceeds from sale of property, plant and
equipment 0.9 0.6
------ ------
Net cash used by investing
activities (24.2) (34.9)
Cash Flows from Financing Activities
Dividends to stockholders (4.7) (4.6)
Proceeds from issuance of stock 8.6 3.1
Notes payable reductions (1.2) (13.2)
Long-term debt borrowings - 35.0
Long-term debt reductions (18.5) (6.2)
------ ------
Net cash (used) provided by
financing activities (15.8) 14.1
------ ------
Effect of exchange rates on cash and
equivalents (1.3) 0.2
------ ------
Decrease in cash and equivalents (25.2) (5.6)
Cash and equivalents - beginning of period 34.4 24.7
------ ------
Cash and equivalents - end of period $ 9.2 $ 19.1
====== ======
Supplemental Disclosures of Cash Flow
Information
Cash paid during the period for:
Interest $ 17.3 $ 15.4
Income taxes $ 6.3 $ 3.6
Non-cash Investing and Financing Activities:
Purchase of equipment under capital lease $ 0.4 $ 2.1
Receivable from sale of certain clinical
chemistry assets $ 4.6 $ -
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
BECKMAN COULTER, INC.
Notes To Condensed Consolidated Financial Statements
March 31, 2000
Unaudited
1. Report by Management
- -------------------------
We prepared the accompanying Condensed Consolidated Financial
Statements following the requirements of the Securities and
Exchange Commission ("SEC") for interim reporting. As
permitted under those rules, certain footnotes or other
financial information normally required by generally accepted
accounting principles ("GAAP") have been condensed or omitted.
In addition, we have reclassified certain prior period data to
conform to the current presentation.
The financial statements include all normal and recurring
adjustments that we consider necessary for the fair
presentation of our financial position and operating results.
To obtain a more detailed understanding of our results, these
Condensed Consolidated Financial Statements should be read in
conjunction with the consolidated financial statements and
notes in our annual report on Form 10-K for the year ended
December 31, 1999.
Revenues, expenses, assets, and liabilities can vary between
the quarters of the year. Therefore, the results and trends
in these interim financial statements may not be the same as
those for the full year.
2. Comprehensive Income
- -------------------------
Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income", establishes standards for
the reporting and display of comprehensive income. Components
of comprehensive income include net earnings and foreign
currency translation adjustments. The components of
comprehensive income are as follows (in millions):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
<S> <C> <C>
Net earnings $ 21.0 $ 17.1
Foreign currency
translation adjustment (11.3) (11.3)
------ ------
Comprehensive income $ 9.7 $ 5.8
====== ======
</TABLE>
3. Earnings Per Share
- -----------------------
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share", establishes standards for computing and presenting
earnings per share (EPS), where:
- "basic earnings per share" includes only actual weighted
average shares outstanding; and
- "diluted earnings per share" includes the effect of any
items that are dilutive, such as stock options.
The following table summarizes the computation of EPS (in
millions, except amounts per share):
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
---- ----
Per Per
Net Share Net Share
Earnings Shares Amount Earnings Shares Amount
-------- ------ ------ -------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS:
Net earnings $21.0 29.1 $0.72 $17.1 28.5 $0.60
Effect of
dilutive
stock options - 1.1 (0.02) - 1.1 (0.02)
----- ---- ----- ----- ---- -----
Diluted EPS:
Net earnings $21.0 30.2 $0.70 $17.1 29.6 $0.58
===== ==== ===== ===== ==== =====
</TABLE>
4. Sale of Receivables
- ------------------------
During the three months ended March 31, 2000, we sold certain
financial assets (primarily consisting of sales-type lease
receivables) as part of our plan to reduce debt. The net book
value of financial assets sold was $29.8 million for which we
received $29.9 million in cash proceeds. During the three
months ended March 31, 1999, we sold similar assets with a net
book value of $18.0 million for cash proceeds of $18.7
million. Under the provisions of Statement of Financial
Accounting Standards No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of
Liabilities", the transactions were accounted for as sales and
as a result the related receivables have been excluded from
the accompanying Condensed Consolidated Balance Sheets. We
have established a reserve for potential losses, since the
sales are subject to certain recourse provisions.
5. Inventories
- ----------------
Inventories consisted of the following (in millions):
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
<S> <C> <C>
Finished products $235.3 $210.9
Raw materials, parts and
assemblies 92.6 87.2
Work in process 18.6 15.0
------ ------
$346.5 $313.1
====== ======
</TABLE>
6. Provision for Restructuring Operations
- -----------------------------------------
We recorded a restructuring charge of $4.3 million, $2.6
million after taxes, in the fourth quarter of 1999. The
following table details the activity within the accrual for
the three months ended March 31, 2000 (in millions):
<TABLE>
<CAPTION>
Facility
Consolidation
Personnel and
and Asset-related
Other Write-offs Total
----- ---------- -----
<S> <C> <C> <C>
Balance at December 31, 1999:
Consolidation of sales,
general administrative
and technical functions $ 3.0 $ 0.6 $ 3.6
2000 year-to-date activity:
Consolidation of sales,
general administrative
and technical functions (0.9) (0.1) (1.0)
----- ----- -----
Balance at March 31, 2000:
Consolidation of sales,
general administrative
and technical functions $ 2.1 $ 0.5 $ 2.6
===== ===== =====
</TABLE>
We recorded a restructuring charge of $19.1 million, $11.2
million after taxes, in the fourth quarter of 1998. The
following table details the activity within the accrual for
the three months ended March 31, 2000 (in millions):
<TABLE>
<CAPTION>
Facility
Consolidation
Personnel and
and Asset-related
Other Write-offs Total
----- ---------- -----
<S> <C> <C> <C>
Balance at December 31, 1999:
Consolidation of sales,
general administrative and
technical functions $ 8.3 $ - $ 8.3
Changes in manufacturing
operations 1.1 4.5 5.6
----- ----- -----
Remaining provision included
in accrued expenses at
December 31, 1999 $ 9.4 $ 4.5 $13.9
===== ===== =====
2000 year-to-date activity:
Consolidation of sales,
general administrative and
technical functions $(0.3) $ - $(0.3)
Changes in manufacturing
operations (0.3) (3.7) (4.0)
----- ----- -----
Total 2000 year-to-date
activity $(0.6) $(3.7) $(4.3)
===== ===== =====
Balance at March 31, 2000:
Consolidation of sales,
general administrative and
technical functions $ 8.0 $ - $ 8.0
Changes in manufacturing
operations 0.8 0.8 1.6
----- ----- -----
Balance at March 31, 2000 $ 8.8 $ 0.8 $ 9.6
===== ===== =====
</TABLE>
In the fourth quarter of 1997, we recorded a restructuring
charge of $59.4 million, $36.4 million after taxes. The
following table details the activity within the accrual for
the three months ended March 31, 2000 (in millions):
<TABLE>
<CAPTION>
Facility
Consolidation
Personnel and
and Asset-related
Other Write-offs Total
----- ---------- -----
<S> <C> <C> <C>
Balance at December 31, 1999:
Consolidation of sales,
general administrative and
technical functions $ 1.7 $ 1.7 $ 3.4
Changes in manufacturing
operations 1.6 - 1.6
----- ----- -----
Remaining provision included
in accrued expenses at
December 31, 1999 $ 3.3 $ 1.7 $ 5.0
===== ===== =====
2000 year-to-date activity:
Consolidation of sales,
general administrative and
technical functions $(1.2) $(0.6) $(1.8)
Changes in manufacturing
operations (1.2) - (1.2)
----- ----- -----
Total 2000 year-to-date
activity $(2.4) $(0.6) $(3.0)
===== ===== =====
Balance at March 31, 2000:
Consolidation of sales,
general administrative and
technical functions $ 0.5 $ 1.1 $ 1.6
Changes in manufacturing
operations 0.4 - 0.4
----- ----- -----
Balance at March 31, 2000 $ 0.9 $ 1.1 $ 2.0
===== ===== =====
</TABLE>
7. Debt Financing and Guarantor Subsidiaries
- ---------------------------------------------
In March 1998, we issued $160.0 million of 7.10% Senior Notes
due 2003 and $240.0 million of 7.45% Senior Notes due 2008
(the "Offering"). We used the net proceeds of $394.3 million
to reduce borrowings and commitments under our bank facilities
and for operating purposes. In connection with the Offering,
certain of our subsidiaries (the "Guarantor Subsidiaries")
jointly, fully, severally, and unconditionally guaranteed such
notes. We present below the supplemental condensed financial
information (in millions) of the Parent, Guarantor
Subsidiaries and Non-Guarantor Subsidiaries. Please note that
in this footnote, we used the equity method of accounting for
our investments in subsidiaries and the Guarantor
Subsidiaries' investments in Non-Guarantor Subsidiaries. This
financial information should be read in conjunction with the
Condensed Consolidated Financial Statements.
<TABLE>
<CAPTION>
Non-
Guarantor Guarantor
Subsi- Subsi- Elimina- Consoli-
Parent diaries diaries tions dated
------ ------- ------- ----- -----
Condensed
Consolidated
Balance Sheet
March 31, 2000
<S> <C> <C> <C> <C> <C>
Assets:
Cash and
equivalents $(40.2) $ (4.2) $ 53.6 $ - $ 9.2
Trade and other
receivables 231.8 6.1 278.6 - 516.5
Inventories 232.1 38.3 125.2 (49.1) 346.5
Other current
assets 510.6 811.3 73.5 (1,340.4) 55.0
------- ------ ------ --------- -------
Total current
assets 934.3 851.5 530.9 (1,389.5) 927.2
Property, plant and
equipment, net 159.6 82.1 124.5 (70.5) 295.7
Goodwill, net 10.1 323.1 8.8 - 342.0
Other intangibles,
net 29.6 362.2 3.3 - 395.1
Other assets 1,334.9 30.2 235.4 (1,531.3) 69.2
-------- -------- ------ --------- --------
Total assets $2,468.5 $1,649.1 $902.9 $(2,991.3) $2,029.2
======== ======== ====== ========= ========
Liabilities:
Notes payable and
current
maturities
of long-term
debt $ 9.9 $ 0.7 $ 37.2 $ - $ 47.8
Accounts payable,
accrued expenses 279.4 34.2 88.8 - 402.4
Other current
liabilities 556.9 295.5 98.9 (896.4) 54.9
-------- -------- ------ --------- --------
Total current
liabilities 846.2 330.4 224.9 (896.4) 505.1
Long-term debt,
less current
maturities 895.8 0.1 62.2 - 958.1
Other liabilities 485.0 642.8 180.6 (984.0) 324.4
-------- -------- ------ --------- --------
Total
liabilities 2,227.0 973.3 467.7 (1,880.4) 1,787.6
Total stockholders'
equity 241.5 675.8 435.2 (1,110.9) 241.6
-------- -------- ------ --------- --------
Total
liabilities
and
stockholders'
equity $2,468.5 $1,649.1 $902.9 $(2,991.3) $2,029.2
======== ======== ====== ========= ========
</TABLE>
<TABLE>
<CAPTION>
Non-
Guarantor Guarantor
Subsi- Subsi- Elimina- Consoli-
Parent diaries diaries tions dated
------ ------- ------- ----- ------
Condensed Consolidated
Balance Sheet
December 31, 1999
<S> <C> <C> <C> <C> <C>
Assets:
Cash and equivalents $ (5.3) $ 3.7 $ 36.0 $ - $ 34.4
Trade and other
receivables 255.8 6.0 304.6 - 566.4
Inventories 201.0 32.1 122.7 (42.7) 313.1
Other current
assets 455.4 725.7 95.4 (1,224.0) 52.5
------- -------- ------ --------- --------
Total current
assets 906.9 767.5 558.7 (1,266.7) 966.4
Property, plant and
equipment, net 152.4 84.6 142.3 (73.4) 305.9
Goodwill, net 10.3 325.6 8.8 - 344.7
Other intangibles,
net 30.2 366.2 3.5 - 399.9
Other assets 1,457.9 35.8 279.2 (1,679.0) 93.9
-------- -------- ------ --------- --------
Total assets $2,557.7 $1,579.7 $992.5 $(3,019.1) $2,110.8
======== ======== ====== ========= ========
Liabilities:
Notes payable and
current maturities
of long-term debt $ 4.4 $ 1.1 $ 44.5 $ - $ 50.0
Accounts payable,
accrued expenses 368.3 32.7 95.6 (22.5) 474.1
Other current
liabilities 530.9 213.1 131.0 (823.2) 51.8
-------- -------- ------ -------- --------
Total current
liabilities 903.6 246.9 271.1 (845.7) 575.9
Long-term debt,
less current
maturities 913.0 0.1 67.6 - 980.7
Other liabilities 513.2 647.9 213.0 (1,047.8) 326.3
-------- -------- ------ -------- --------
Total
liabilities 2,329.8 894.9 551.7 (1,893.5) 1,882.9
Total stockholders'
equity 227.9 684.8 440.8 (1,125.6) 227.9
-------- -------- ------ -------- --------
Total
liabilities
and
stockholders'
equity $2,557.7 $1,579.7 $992.5 $(3,019.1) $2,110.8
======== ======== ====== ========= ========
</TABLE>
[CAPTION]
<TABLE>
Non-
Guarantor Guarantor
Subsi- Subsi- Elimina- Consoli-
Parent diaries diaries tions dated
------ ------- ------- ----- -----
Condensed Consolidated
Statement of Operations
Quarter ended
March 31, 2000
<S> <C> <C> <C> <C> <C>
Sales $330.3 $ 75.7 $222.7 $(194.3) $434.4
Operating costs and
expenses:
Cost of sales 202.6 55.9 169.5 (196.5) 231.5
Selling, general
and administrative 61.3 12.6 41.3 - 115.2
Research and
development 24.2 15.4 1.3 - 40.9
------ ------ ------ ------- ------
Operating
income (loss) 42.2 (8.2) 10.6 2.2 46.8
Nonoperating (income)
expense 13.8 3.4 (0.7) (0.1) 16.4
------ ------ ------ ------- ------
Earnings (loss) before
income taxes 28.4 (11.6) 11.3 2.3 30.4
Income taxes (benefit) 8.8 (3.1) 3.0 0.7 9.4
------ ------ ------ ------- ------
Net earnings
(loss) $ 19.6 $ (8.5) $ 8.3 $ 1.6 $ 21.0
====== ======= ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Non-
Guarantor Guarantor
Subsi- Subsi- Elimina- Consoli-
Parent diaries diaries tions dated
------ ------- ------- ----- -----
Condensed Consolidated
Statement of Operations
Quarter ended
March 31, 1999
<S> <C> <C> <C> <C> <C>
Sales $282.0 $88.2 $216.5 $(181.6) $405.1
Operating costs and
expenses:
Cost of sales 181.2 56.6 151.2 (177.8) 211.2
Selling, general
and administrative 51.5 14.0 46.3 - 111.8
Research and
development 24.7 12.7 1.4 - 38.8
------ ----- ------ ------- ------
Operating
income (loss) 24.6 4.9 17.6 (3.8) 43.3
Nonoperating (income)
expense 28.5 (2.6) 1.1 (8.8) 18.2
------ ----- ------ ------ ------
Earnings (loss) before
income taxes (3.9) 7.5 16.5 5.0 25.1
Income taxes (benefit) (2.0) 1.1 7.1 1.8 8.0
------ ----- ------ ------ ------
Net earnings
(loss) $ (1.9) $ 6.4 $ 9.4 $ 3.2 $ 17.1
====== ===== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Non-
Guarantor Guarantor
Subsi- Subsi- Consoli-
Parent diaries diaries dated
------ ------- ------- -----
Condensed Consolidated
Statement of Cash Flows
Quarter Ended March 31, 2000
<S> <C> <C> <C> <C>
Net cash provided (used) by
operating activities $(43.0) $(6.1) $ 65.2 $ 16.1
Cash flows from investing
activities:
Additions to property, plant and
equipment (19.6) (1.5) (16.0) (37.1)
Proceeds from sale of instruments
leased to customers under
operating lease
arrangements - - 12.0 12.0
Proceeds from sale of property,
plant and equipment - - 0.9 0.9
------ ----- ----- -----
Net cash (used) provided by
investing activities (19.6) (1.5) (3.1) (24.2)
------ ----- ----- -----
Cash flows from financing
activities:
Dividends to stockholders (4.7) - - (4.7)
Proceeds from issuance of stock 8.6 - - 8.6
Notes payable (reductions)
borrowings 5.7 (0.3) (6.6) (1.2)
Net intercompany (reductions)
borrowings 35.4 - (35.4) -
Long-term debt reductions (17.3) - (1.2) (18.5)
------ ----- ----- -----
Net cash (used) provided by
financing activities 27.7 (0.3) (43.2) (15.8)
------ ----- ----- -----
Effect of exchange rates on cash
and equivalents - - (1.3) (1.3)
(Decrease) increase in cash and
equivalents (34.9) (7.9) 17.6 (25.2)
Cash and equivalents - beginning of
period (5.3) 3.7 36.0 34.4
------ ----- ----- -----
Cash and equivalents - end of
period $(40.2) $(4.2) $ 53.6 $ 9.2
====== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Non-
Guarantor Guarantor
Subsi- Subsi- Consoli-
Parent diaries diaries dated
------ ------- ------- -----
Condensed Consolidated
Statement of Cash Flows
Quarter ended March 31, 1999
<S> <C> <C> <C> <C>
Net cash provided (used) by
operating activities $ 16.0 $(31.6) $ 30.6 $ 15.0
------ ------ ------ ------
Cash flows from investing
activities:
Additions to property, plant
and equipment (13.0) (1.4) (21.1) (35.5)
Proceeds from sale of property,
plant and equipment 0.6 - - 0.6
------ ------ ------ ------
Net cash used by investing
activities (12.4) (1.4) (21.1) (34.9)
------ ------ ------ ------
Cash flows from financing
activities:
Dividends to stockholders (4.6) - - (4.6)
Proceeds from issuance of stock 3.1 - - 3.1
Notes payable (reductions)
borrowings (11.2) - (2.0) (13.2)
Net intercompany (reductions)
borrowings (4.8) 34.6 (29.8) -
Long-term debt borrowings
(reductions) 35.0 (0.3) (5.9) 28.8
------ ------ ------ ------
Net cash (used) provided by
financing activities 17.5 34.3 (37.7) 14.1
------ ------ ------ ------
Effect of exchange rates on cash
and equivalents - - 0.2 0.2
------ ------ ------ ------
(Decrease) increase in cash and
equivalents 21.1 1.3 (28.0) (5.6)
Cash and equivalents - beginning of
period 4.2 (0.1) 20.6 24.7
------ ----- ------ ------
Cash and equivalents - end of
period $ 25.3 $ 1.2 $ (7.4) $ 19.1
====== ===== ====== ======
</TABLE>
8. Contingencies
- ------------------
In December 1999, Streck Laboratories, Inc. served Beckman
Coulter and Coulter Corporation with a complaint filed in the
United States District Court for the District of Nebraska.
The complaint alleges that control products sold by Beckman
Coulter and/or Coulter Corporation infringe each of five
patents owned by Streck, and seeks injunctive relief, damages,
attorney fees and costs. We, on behalf of ourselves and on
behalf of Coulter Corporation have answered the complaint and
have filed a counterclaim against Streck for patent
infringement. At this early stage of this matter, there is no
reasonable basis for us to conclude that this litigation could
lead to an outcome that would have a material adverse effect
on our consolidated operations or financial position.
In addition to the above matter, we are involved in a number
of other lawsuits, which we consider normal in view of our
size and the nature of our business. We do not believe that
any liability resulting from any such lawsuits will have a
material adverse effect on our operations, financial position
or liquidity.
9. Business Segment Information
- ---------------------------------
Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related
Information" requires segments to be determined and reported
based on how management measures performance and makes
decisions about allocating resources.
We are engaged primarily in the design, manufacture and sale
of laboratory instrument systems and related products. Our
organization has two reportable segments: (1) clinical
diagnostics and (2) life science research. The clinical
diagnostics segment encompasses diagnostic applications,
principally in hospital laboratories. The life science
research segment includes life sciences and drug discovery
applications in universities, medical schools, and
pharmaceutical and biotechnology companies. All corporate
activities including financing transactions are captured in a
central services "Center", which is reflected in the table
below. We evaluate performance based on profit or loss from
operations. Although primarily operating in the same industry,
reportable segments are managed separately, since each
business requires different marketing strategies and has
different customers.
In the first quarter of 2000, we realigned our geographic
reporting structure. Our Latin America operations, which were
formerly reported with the "Asia and Rest of World" geographic
area, are now reported in the "Americas" geographic area along
with our North America operations. Prior year amounts have
been reclassified to conform to the current year presentation.
<TABLE>
<CAPTION>
(in millions) For the quarters ended
March 31,
--------
2000 1999
---- ----
<S> <C> <C>
Net sales
Clinical
diagnostics $ 353.1 $ 326.7
Life science
research 81.3 78.4
Center - -
------- -------
Consolidated $ 434.4 $ 405.1
======= =======
Operating income
(loss)
Clinical
diagnostics $ 53.5 $ 54.9
Life science
research 5.2 6.3
Center (11.9) (17.9)
------- -------
Consolidated $ 46.8 $ 43.3
======= =======
Interest income
Clinical
diagnostics $ (0.7) $ (1.0)
Life science
research - -
Center (0.7) (1.0)
------- -------
Consolidated $ (1.4) $ (2.0)
======= =======
Interest expense
Clinical
diagnostics $ - $ -
Life science
research - -
Center 18.6 18.2
------- -------
Consolidated $ 18.6 $ 18.2
======= =======
</TABLE>
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
<S> <C> <C>
Total assets
Clinical diagnostics $1,417.2 $1,460.8
Life science research 184.4 178.4
Center 427.6 471.6
-------- --------
Consolidated $2,029.2 $2,110.8
======== ========
</TABLE>
<TABLE>
<CAPTION>
For the quarters ended
March 31,
2000 1999
---- ----
<S> <C> <C>
Sales to external
customers
Americas $262.3 $238.1
Europe 122.4 120.7
Asia 49.7 46.3
------ ------
Consolidated $434.4 $405.1
====== ======
</TABLE>
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
<S> <C> <C>
Long-lived assets
Americas $ 768.2 $ 753.2
Europe 252.7 308.0
Asia 81.1 83.2
-------- --------
Consolidated $1,102.0 $1,144.4
======== ========
</TABLE>
10. Recent Accounting Developments
- ----------------------------------
In December 1999, the Securities and Exchange Commission
("SEC") issued Staff Accounting Bulletin No. 101 ("SAB 101").
SAB 101 provides the SEC's views in applying generally
accepted accounting principles to selected revenue recognition
issues. As amended, calendar year-end companies that have not
applied the accounting requirements of SAB 101 may report a
change in accounting principle no later than June 30, 2000.
We are currently evaluating the impact of SAB 101 on our
consolidated financial statements and results of operations.
11. Subsequent Event
- --------------------
On April 6, 2000, our stockholders approved an amendment to the
Certificate of Incorporation to increase the authorized shares of common
stock from 75,000,000 to 150,000,000.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Overview
- --------
Beckman Coulter, Inc. is a world leader in providing systems
that simplify and automate laboratory processes used in all
phases of the battle against disease. We design, manufacture,
market and service a broad range of laboratory systems
consisting of instruments, chemistries, software, and supplies
that meet a variety of laboratory needs. Our products are used
in a range of applications, from instruments used for
pioneering medical research and drug discovery to diagnostic
tools found in hospitals and physicians' offices. We compete
in market segments that total approximately $28 billion in
annual sales worldwide.
Our diagnostics product lines cover virtually all blood tests
routinely performed in hospital laboratories. For medical and
pharmaceutical research, we provide a wide range of systems
used in genomic, cellular and protein testing. We have
approximately 125,000 systems operating in laboratories around
the world, with 68% of annual revenues coming from after-
market customer purchases of operating supplies, chemistry
kits, and service. We market our products in approximately 130
countries, generating nearly 45% of revenues outside the
United States.
Results of Operations
- ---------------------
Sales in the first quarter of 2000 were $434.4 million, an
increase of 7.2% (9.2% excluding the effect of foreign
currency rate changes) compared to the same period in the
prior year. Clinical diagnostics sales were $353.1 million and
life science research sales were $81.3 million, an increase of
8.1% and 3.6%, respectively, compared to the same period in
1999. Sales in the Americas, Europe, and Asia geographic areas
increased 10.2%, 1.4%, and 7.3%, respectively, during the
quarter compared to the same period in the prior year.
Increased instrument sales in the Americas, led by placements
of our clinical chemistry Synchron LX-20 and immunodiagnostics
Access units, contributed to the increase in revenues compared
to the same period in the prior year. In the life science
research business, our robotic automation/genetic analysis
products were the primary contributors to our sales growth,
led by placements of CEQ 2000 DNA Analysis systems and Sagian
Core systems. Europe sales included a one-time $16.6
million sale (proceeds were comprised of $12.0 million in cash and $4.6
million in notes receivable) of clinical chemistry assets in
Spain to a third party distributor offset by continuing
softness in the German market and weakening of the Euro. For
the quarter ended March 31, 1999, sales generated from the clinical
chemistry operations in Spain were $5.4 million. The increase
of sales in the Asia markets is the result of a strengthening economy
in the Southeast Asia Pacific region.
Gross profit as a percentage of sales in the first quarter of
2000 was 46.7%, 1.2 percentage points lower than the same
period in the prior year. The decline in gross profit
percentage is primarily due to the $16.6 million sale of the
clinical chemistry assets in Spain which contributed a lower
gross profit than historical company levels. Excluding this
one-time transaction, gross profit would have been 47.9%.
Selling, general and administrative expenses ("SG&A")
increased $3.4 million to $115.2 million or 26.5% of sales in
the first quarter of 2000 from $111.8 million or 27.6% of
sales in the first quarter of 1999. SG&A, as a percentage of
sales, declined in the three month period ended March 31, 2000
as compared to the same period in the prior year due to
synergies realized from the Coulter integration.
Net earnings for the first quarter of 2000 was $21.0 million
or $0.70 per diluted share compared to $17.1 million or $0.58
per diluted share in 1999. The increase in net earnings is
primarily due to the various reasons discussed previously.
Slightly higher interest rates in 2000 contributed to an
increase in interest expense from 1999 to 2000, which in turn
had an unfavorable impact on net earnings.
Financial Condition
- -------------------
As discussed in greater detail in our 1999 annual report,
Beckman Coulter is a highly leveraged company. Although the
debt-to-capital ratio has declined from 81.9% at December 31,
1999 to 80.6% at March 31, 2000, among other things, our high
level of debt:
- - increases our vulnerability to general adverse economic
and industry conditions;
- - could limit our ability to obtain additional financing on
favorable terms; and
- - requires the dedication of a substantial portion of our
cash flow from operations to the payment of principal and
interest on indebtedness.
In addition, our agreements with our lenders contain a number
of covenants, which, among other things, require us to comply
with specified financial ratios and tests. At March 31, 2000,
we believe that we are in compliance with such financial
ratios and tests.
We have and will continue to evaluate opportunities to provide
additional cash flow by monetizing assets during 2000 and
beyond, including sales of certain financial assets (primarily
consisting of sales-type lease receivables) and real estate
assets.
Operating activities provided net cash of $16.1 million in the
first three months of 2000 compared to net cash provided of
$15.0 million in the first three months of the prior year. The
primary contributors were:
- - net earnings were $21.0 million in 2000 compared to $17.1
million in 1999;
- - proceeds from the sale of sales-type lease receivables
were $29.9 million in 2000 compared to $18.7 million in 1999;
- - reductions in trade and other receivables contributed
$28.1 million in cash compared to $33.4 million cash usage in
1999;
- - increases in inventories used $37.6 million in 2000
compared to $11.9 million used in 1999;
- - cash paid to settle accounts payable, accrued expenses
and other liabilities was $68.2 million in 2000 compared to
$33.4 million in 1999.
In 2000, investing activities used $24.2 million of net cash
consisting of $36.2 million of net capital purchases, offset
by $12.0 million in proceeds from the sale of clinical
chemistry assets in Spain. In 1999, investing activities used
$34.9 million of net cash, primarily for capital purchases.
Net cash used by financing activities was $15.8 million for
the three-month period in 2000 compared to $14.1 million cash
provided in 1999. During the first quarter of 2000, we made
$19.7 million in cash payments towards reducing our debt
compared to net debt borrowings of $15.6 million, during the
same period in the prior year.
In addition to the decline in our debt-to-capital ratio
mentioned previously, the ratio of current assets to current
liabilities ("current ratio") improved to 1.8 at March 31,
2000 from 1.7 at December 31, 1999. The decrease in current
assets was primarily due to reductions in cash as a result of
debt reduction payments and the decrease in trade and other
receivables offset by an increase in net inventories. The
decrease in current liabilities was due to cash payments to
settle accounts payable, accrued expenses and other
liabilities. Based upon current levels of operations and
anticipated cost savings and future growth, we believe that
our cash flow from operations, together with available
borrowings under the credit facility and other sources of
liquidity will be adequate to meet our anticipated
requirements until the maturity of the credit facility in
2002. However, we cannot give any assurance that our business
will continue to generate cash flows at or above current
levels or that estimated cost savings or growth can be
achieved. Our future operating performance and ability to
service or refinance our existing indebtedness, including the
credit facility, will be subject to future economic conditions
and to financial, business and other factors, many of which
are beyond our control.
On March 9, 2000, we paid a quarterly cash dividend of $0.16
per share of common stock, for a total of $4.7 million.
Business Climate
- ----------------
The clinical diagnostics and life science research markets are
highly competitive and we encounter significant competition in
each market from many manufacturers, both domestic and outside
the United States. These markets continue to be unfavorably
impacted by the economic weakness in parts of Europe and Asia
and government and healthcare cost containment initiatives in
general. The life science research market also continues to
be affected by consolidations of pharmaceutical companies and
governmental constraints on research and development spending,
especially outside the United States.
In the clinical diagnostics market, attempts to lower costs
and to increase productivity have led to further consolidation
among healthcare providers in the United States, resulting in
more powerful provider groups that continue to leverage their
purchasing power to contain costs. Preferred supplier
arrangements and combined purchases are becoming more
commonplace. Consequently, it has become essential for
manufacturers to provide cost-effective diagnostic systems to
remain competitive. Cost containment initiatives in the United
States and in the European healthcare systems will continue to
be factors, which may affect our ability to maintain or
increase sales. Future profitability may also be adversely
affected if the relative value of the U.S. dollar strengthens
against certain currencies.
Our new products originate from four sources:
- - internal research and development programs;
- - external collaborative efforts with individuals in
academic institutions and technology companies;
- - devices and techniques that are generated in customers'
laboratories; and
- - business and technology acquisitions.
The continuing consolidation trend among United States
healthcare providers, mentioned previously, has increased
pressure on diagnostic equipment manufacturers to broaden
their product offerings to encompass a wider range of testing
capability, greater automation and higher volume capacity at a
lower cost. With our current broad based product offering,
Beckman Coulter is the world's leading manufacturer of
hematology systems for the clinical analysis of blood cells,
where we have a market share twice the size of our next
largest competitor. In addition, Beckman Coulter is
considered a technology leader in cell counting and
characterization and has a number two position in flow
cytometry, which is used for both research and clinical
applications.
The size and growth of our markets are influenced by a number
of factors, including:
- - technological innovation in bio-analytical practice;
- - government funding for basic and disease-related research
(for example, heart disease, AIDS and cancer);
- - research and development spending by biotechnology and
pharmaceutical companies;
- - healthcare spending; and
- - physician practice.
We expect worldwide healthcare expenditures and diagnostic
testing to increase over the long-term, primarily as a result
of the following:
- - growing demand for services generated by the increasing
size and aging of the world population;
- - increasing expenditures on diseases requiring costly
treatment (for example, AIDS and cancer); and
- - expanding demand for improved healthcare services in
developing countries.
In addition to the business climate factors discussed
previously, certain economic factors may influence our
business, including:
- - currency fluctuations - as nearly 45% of our revenues are
generated outside the United States; and
- - interest rates - as approximately 40% of our debt is
under variable interest rate terms.
With our leadership position in automated clinical chemistry
and our broad based capability in routine clinical chemistry,
we are able to offer a broad range of automated systems that
together can perform more than 75% of a hospital laboratory's
test volume and essentially all of the tests that are
considered routine. We believe we are able to provide
significant value-added benefits, enhanced through our
expertise in simplifying and automating laboratory processes,
to our customers.
Recent Accounting Pronouncements
- --------------------------------
In December 1999, the Securities and Exchange Commission
("SEC") issued Staff Accounting Bulletin No. 101 ("SAB 101").
SAB 101 provides the SEC's views in applying generally
accepted accounting principles to selected revenue recognition
issues. As amended, calendar year-end companies that have not
applied the accounting requirements of SAB 101 may report a
change in accounting principle no later than June 30, 2000.
We are currently evaluating the impact of SAB 101 on our
consolidated financial statements and results of operations.
Forward Looking Statements
- --------------------------
This Form 10-Q contains forward-looking statements, including
statements regarding, among other items:
- our business strategy;
- anticipated trends in our business;
- our liquidity requirements and capital resources; and
- the impact of the euro conversion.
These forward-looking statements are based on our expectations
and are subject to a number of risks and uncertainties, some
of which are beyond our control. These risks and uncertainties
include, but are not limited to:
- complexity and uncertainty regarding development of new
high-technology products;
- loss of market share through aggressive competition in
the clinical diagnostics and life science research
markets;
- our dependence on capital spending policies and
government funding;
- the effect of potential healthcare reforms;
- fluctuations in foreign exchange rates and interest
rates;
- reliance on patents and other intellectual property;
- unanticipated reductions in cash flows and difficulty in
sales of assets;
- unanticipated euro problems; and
- other factors that cannot be identified at this time.
Although we believe we have the product offerings and
resources required to achieve our objectives, actual results
could differ materially from those anticipated by these
forward-looking statements. There can be no assurance that
events anticipated by these forward-looking statements will in
fact transpire as expected.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
The Company's cash flow and earnings are subject to fluctuations due to
changes in foreign currency exchange rates and interest rates. The Company
attempts to limit its exposure to these market risks through the use of
various financial instruments. Assuming a hypothetical 10% strengthening
and 10% weakening of the spot exchange rates for the U.S. dollar against
the foreign currencies at March 31, 2000, a 10% strengthening of the U.S.
dollar would result in a gain in fair value of $19.3 million and a 10%
weakening of the U.S. dollar would result in a loss in fair value of $18.8
million in these instruments. With respect to interest rates, a one
percentage point increase or decrease in interest rates would decrease or
increase current year's pre-tax earnings by $2.8 million. For further
discussion of the Company's market risk exposure, refer to the section
entitled "Financial Risk Management" included in "Management's Discussion
and Analysis" of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
In December 1999, Streck Laboratories, Inc.
served Beckman Coulter and Coulter Corporation with
a complaint filed in the United States District
Court for the District of Nebraska. The complaint
alleges that control products sold by Beckman
Coulter and/or Coulter Corporation infringe each of
five patents owned by Streck, and seeks injunctive
relief, damages, attorneys fees and costs. Beckman
Coulter for itself and on behalf of Coulter
Corporation has answered the complaint and has filed
a counterclaim against Streck for patent
infringement. At this early stage of this matter,
there is no reasonable basis for Beckman Coulter to
conclude that this litigation could lead to an
outcome that would have a material adverse effect on
Beckman Coulter's operations or financial position.
Item 2. Changes In Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
The annual meeting of the Stockholders of the
Company (the "Annual Meeting") was held on April 6,
2000.
Three members of the Board of Directors whose
terms expired at the 2000 Annual Meeting were
elected to new terms expiring at the 2003 Annual
Meeting. The number of shares voting were as
follows:
Votes For Votes Withheld
--------- --------------
Peter B. Dervan, Ph.D. 24,617,854 501,533
Gavin S. Herbert 24,614,879 504,508
C. Roderick O'Neil 24,612,514 506,873
The remaining members of the Board of Directors
who will continue in office and the year in which
their terms expire are: Term expiring 2001:
Carolyne K. Davis, Ph.D., Ronald W. Dollens, Charles
A. Haggerty and William N. Kelley, M.D. Term
Expiring in 2002: Hugh K. Coble, Van B. Honeycutt,
John P. Wareham, and Betty Woods.
The proposal to amend the Company's Fourth
Restated Certificate of Incorporation to increase
the amount of authorized shares from 75,000,000 to
150,000,000 was adopted. The vote was 21,752,380
for, 3,319,791 against, and 47,216 abstained.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
10.1 2000 Annual Incentive Plan (AIP)
11. Statement re Computation of Per Share Earnings:
This information is set forth in Note 3, Net
Earnings Per Share of the Condensed Consolidated Financial
Statements included in Part I herein.
15. Independent Accountants' Review Report, April 27, 2000
27. Financial Data Schedule for the three month period ended
March 31, 2000
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 COULTER, INC.
(Registrant)
Date: May 10, 2000 by JACK E. SOROKIN
Jack E. Sorokin
Assistant General Counsel
Date: May 10, 2000 by PAUL GLYER
Paul Glyer
Vice President, Director
Financial Planning
<PAGE>
EXHIBIT INDEX
FORM 10-Q, FIRST QUARTER, 2000
Exhibit
Number Description
- ------- -----------
10.1 2000 Annual Incentive Plan (AIP)
11. Statement re Computation of Per Share Earnings: This
information is set forth in Note 3, Net Earnings Per Share, of
the Condensed Consolidated Financial Statements included in Part I
herein.
15. Independent Accountants' Review Report, April 27, 2000
27. Financial Data Schedule for the three month period
ended March 31, 2000
Beckman Coulter
EXHIBIT 10.1
2000 ANNUAL INCENTIVE PLAN (AIP)
WHO PARTICIPATES:
Key executives designated by the Chairman of the Board based on
qualifying factors established by the Organization and Compensation
Committee (the Committee) of the Board of Directors.
FUNDING THE AIP:
The company must achieve a minimum of (minimum amount) EPS for any
funding of AIP awards, regardless of any other financial or non-
financial results or individual performance.
WHAT IS MEASURED - THE AIP COMPONENTS:
There are four financial measurements, as well as the individual
performance evaluation, which comprise the 2000 AIP award
opportunity. The financial metrics have been selected because they
directly align with the company's overall goals and objectives:
- Earnings Per Share (EPS)
- Company Sales
- Pre-tax Margin
- Debt/EBITDA
The individual performance evaluation is linked to the achievement
of your goals and objectives, as well as competency development,
established and measured through the Performance Success management
process.
INDIVIDUAL AIP AWARD DETERMINATION:
Individual incentive awards are determined by adding the
percentages earned based on the level of achievement for financial
measurements and your individual performance evaluation. A pro
rata incentive award percentage is calculated for gradations
between achievement levels for financial results. The sum of the
percentages is multiplied by your annual base pay as of December
31, 2000 to arrive at your award amount. For participants with an
individual performance rating of "Needs Improvement", the total
incentive award for financial results may be reduced by up to 100%.
AIP ADMINISTRATION GUIDELINES:
The Committee administers the AIP on behalf of the company. This
responsibility includes interpretation of the plan and the sole and
absolute discretion to establish plan provisions, performance
measures, performance targets, specific award levels and
participation eligibility. All Committee interpretations,
determinations, and actions will be final, conclusive and binding
on all participants. The Committee has authorized the Chairman of
the Board as its designee in matters of annual plan administration
upon its approval of performance measures and targets.
AIP TERMS AND CONDITIONS:
1. All financial results will be measured on an "as reported"
basis with no adjustment for any effect of currency fluctuations.
2. The Chairman of the Board or his designee will adjust
financial measurements and/or calculations as appropriate for
mergers, acquisitions, divestitures and/or other one-time or
special qualifying events identified as an exception.
3. To be eligible for an AIP award, a participant must be in
active pay status continuously through the last company-scheduled
workday of the year. Partial payments may be considered, at the
full discretion of the Committee or its designee, for retirees as
defined by the company's retirement plan, who leave before the end
of the plan year.
4. The Committee or its designee may determine in its sole and
absolute discretion, the status and incentive award level for any
participant whose responsibilities are changed, and of any key
employee who becomes eligible to participate in the plan after the
beginning of the performance period.
5. The Committee at any time and from time to time may terminate,
suspend, modify or amend the plan. Nothing in this plan or any
award granted shall confer on a participant any right to continue
in the employ of the company or interfere in any way with the right
of the company to terminate any employment.
Exhibit 15
KPMG LLP
Center Tower
650 Town Center Drive
Costa Mesa, CA 92626
Independent Accountants' Review Report
The Stockholders and Board of Directors
Beckman Coulter, Inc.:
We have reviewed the condensed consolidated balance sheet of
Beckman Coulter, Inc. and subsidiaries as of March 31, 2000, and
the related condensed consolidated statements of operations and
cash flows for the three-month periods ended March 31, 2000 and
1999. 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
Coulter, Inc. and subsidiaries as of December 31, 1999, and the
related consolidated statements of operations, stockholders'
equity and cash flows for the year then ended (not presented
herein); and in our report dated January 27, 2000, 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, 1999, is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
(KPMG LLP)
Orange County, California
April 27, 2000
<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>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 9
<SECURITIES> 0
<RECEIVABLES> 543
<ALLOWANCES> 26
<INVENTORY> 347
<CURRENT-ASSETS> 927
<PP&E> 799
<DEPRECIATION> 503
<TOTAL-ASSETS> 2029
<CURRENT-LIABILITIES> 505
<BONDS> 1006
0
0
<COMMON> 3
<OTHER-SE> 242
<TOTAL-LIABILITY-AND-EQUITY> 2029
<SALES> 434
<TOTAL-REVENUES> 434
<CGS> 232
<TOTAL-COSTS> 232
<OTHER-EXPENSES> 156
<LOSS-PROVISION> 1
<INTEREST-EXPENSE> 19
<INCOME-PRETAX> 30
<INCOME-TAX> 9
<INCOME-CONTINUING> 21
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21
<EPS-BASIC> 0.72
<EPS-DILUTED> 0.70
</TABLE>
