|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: ISOLYSER CO INC /GA/, 4, 1999-11-30 |
Next: ASSISTED LIVING CONCEPTS INC, SC 13D, 1999-11-30 |
<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of Earliest Event Reported) - November 15, 1999
_______________
GUIDANT CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 001-13388 35-1931722
(State or other jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
111 Monument Circle, 29/th/ Floor 46204
Indianapolis, Indiana (Zip Code)
(Address of principal executive offices)
(317) 971-2000
(Registrant's telephone number, including area code)
_______________
N/A
(Former name or address, if changed since last report)
================================================================================
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On November 15, 1999, pursuant to an Agreement and Plan of Merger, dated as
of August 30, 1999 (the "Merger Agreement"), by and among Guidant Corporation,
an Indiana corporation (the "Company"), Clydesdale Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of the Company ("Merger Sub"), and
CardioThoracic Systems, Inc., a Delaware corporation ("CTS"), Merger Sub was
merged with and into CTS, which thereby became a wholly-owned subsidiary of the
Company (the "Merger").
CTS stockholders approved the Merger at a special meeting of stockholders
held on November 15, 1999. Under the terms of the Merger Agreement, CTS
stockholders received 0.3611 of a share of the common stock, without par value,
of the Company (the "Company Common Stock") for each share of common stock, par
value $0.001, of CTS (the "CTS Common Stock") held by them. The Company will
issue approximately 5,321,457 shares of Company Common Stock to the stockholders
of CTS in the Merger, representing approximately 1.76% of the Company Common
Stock outstanding prior to consummation of the Merger. The aggregate
consideration for the outstanding shares of CTS Common Stock was determined
based upon arms'-length negotiation between the Company and CTS. The acquisition
will be accounted for as a pooling of interests.
Prior to the Merger, no material relationship existed between CTS and the
Company, or any of its affiliates, any director or officer of the Company or any
associate of any such director or officer, except as set forth in this
paragraph. On May 3, 1999, CTS and the Company entered into an agreement under
which CTS granted to Origin Medsystems, Inc., a wholly-owned subsidiary of the
Company, a non-exclusive, royalty-free, temporary license to certain
intellectual property rights that may be necessary for the manufacture, use and
sale of the VASOVIEW(TM) Saphenous Vein Harvesting System. CTS extended the
license under the Merger Agreement through the date of the Merger, and the
Company agreed to pay royalties to CTS, beginning on September 1, 1999, based on
net sales. The amount of the royalties were equal to CTS' obligations to pay
royalties to the third party from whom CTS has acquired the intellectual
property.
CTS designs, develops, manufactures and markets proprietary, disposable
instruments and systems for performing minimally invasive cardiac surgery. CTS'
current products are designed to enable the majority of cardiothoracic surgeons,
using their existing skills coupled with CTS sponsored training, to perform
minimally invasive cardiac surgery on a beating heart. The Company intends to
continue such business.
Item 5. Other Events.
Attached as Exhibit 99.2 are the Company's quarterly Consolidated
Statements of Income restated for the acquisition of CTS for the three months
ended September 30, 1999 and 1998, June 30, 1999 and 1998, March 31, 1999 and
1998, for the nine months ended September 30, 1999, for the three months ended
December 31, 1998, and for the
2
<PAGE>
year ended December 31, 1998 and consolidated Balance Sheets as of September 30,
1999 and December 31, 1998.
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
2.1 Agreement and Plan of Merger dated as of August 30, 1999 by and
among Guidant Corporation, Clydesdale Acquisition Corp. and
CardioThoracic Systems Inc.*
2.2 Support Agreement dated as of August 30, 1999 among Guidant
Corporation, Richard M. Ferrari and Charles S. Taylor.*
2.3 Stock Option Agreement dated as of August 30, 1999 between
Guidant Corporation and CardioThoracic Systems, Inc.*
99.1 Press Release of Guidant Corporation, dated November 15, 1999.
99.2 Restated Financial Statements.
___________
*Incorporated by reference to the Company's Registration Statement on
Form S-4 dated October 15, 1999 (Registration No. 333-89085).
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Guidant Corporation has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
GUIDANT CORPORATION
By: /s/ Keith E. Brauer
---------------------------
Keith E. Brauer
Vice President, Finance
and Chief Financial Officer
Date: November 30, 1999
4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
2.1 Agreement and Plan of Merger dated as of August 30, 1999 by and
among Guidant Corporation, Clydesdale Acquisition Corp. and
CardioThoracic Systems, Inc.*
2.2 Support Agreement dated as of August 30, 1999 among Guidant
Corporation, Richard M. Ferrari and Charles S. Taylor.*
2.3 Stock Option Agreement dated as of August 30, 1999 between
Guidant Corporation and CardioThoracic Systems, Inc.*
99.1 Press Release of Guidant Corporation, dated November 15, 1999.
99.2 Restated Financial Statements.
___________
*Incorporated by reference to the Company's Registration Statement on Form S-4
dated October 15, 1999 (Registration No. 333-89085).
5
<PAGE>
Monday November 15, 4:36 pm Eastern Time Exhibit 99.1
Company Press Release
Guidant Completes its Acquisition of
CardioThoracic Systems, Inc.
INDIANAPOLIS, Ind. and MENLO PARK, Calif.--(BW Health Wire)-- Nov. 15,
1999--Guidant Corporation (NYSE:GDT - news; PCX:GDT), a world leader in the
treatment of cardiovascular and vascular disease, today announced that it has
completed its purchase of CardioThoracic Systems, Inc. (Nasdaq:CTSI - news), a
pioneer in less invasive cardiac surgery. This acquisition, which was
originally announced August 30 of this year, was completed with today's vote of
approval by CTS shareholders.
CTS is a leading developer of proprietary technologies for use in less-
invasive cardiac surgery. It introduced its first-generation system for less
invasive beating-heart bypass surgery in 1996. Since that time, CTS has shipped
more than 40,000 beating-heart bypass systems. CTS employs approximately 160
people at its Cupertino, CA headquarters.
"The acquisition of CTS provides an outstanding platform for Guidant's
growth in cardiac surgery," said Ronald W. Dollens, Guidant's president and
chief executive officer. "CTS has been a recognized leader in minimally
invasive cardiac surgery. By integrating the talents and resources of CTS into
our Cardiac & Vascular Surgery Group, we will be combining the efforts of two
innovative organizations to offer an unmatched mix of novel products to meet the
needs of an increasing number of patients, physicians and hospitals around the
world."
CTS has developed a broad range of products to advance the field of less
invasive cardiac surgery. It pioneered the coronary artery bypass grafting
(CABG) procedure performed on a beating heart, with the CTS OPCAB and CTS MIDCAB
access platform and stabilizer systems. The procedure enables the CABG
procedure to be completed without the use of cardiopulmonary bypass, potentially
reducing post-operative hospital stay and surgical complications while
preserving the high-quality clinical outcomes associated with conventional CABG.
It also established a leadership position in the rapidly growing beating-
heart segment of the CABG market, with several hundred cardiac centers currently
using CTS products. The company has also recently introduced the VOYAGER Aortic
IntraClusion Device for less invasive valve and arrested-heart CABG procedures.
"This acquisition represents not only a significant growth opportunity for
Guidant, it also provides an immediate opportunity to expand our presence with
the cardiac surgeon, an important new customer to us," said Jay Watkins,
president of Guidant's Cardiac & Vascular Surgery Group. "In addition, it
provides the opportunity and capability to expand our technology development in
several important directions."
<PAGE>
Guidant's purchase of CTS represents another significant milestone in the
company's strategic focus of developing market leadership in the areas of
cardiac and vascular surgery.
"The acquisition of CTS' cardiac surgery technology creates multiple
opportunities for innovation by our Cardiac & Vascular Surgery Group," said
James M. Cornelius, chairman of Guidant's Board of Directors. "The combined
products that the C&VS Group will bring forward in minimally invasive surgery
will create the strategic focus and product pipeline similar to our Vascular
Intervention and Cardiac Rhythm Management business groups."
A global leader in the medical device industry, Guidant provides
innovative, minimally invasive and cost-effective products and services for the
treatment of cardiovascular and vascular disease. For more information about
Guidant's products and services, visit the company's Web site at
http://www.guidant.com.
Contact: Guidant Corporation
Rob Allen, Media Relations, (317) 971-2031
Renaldo Juanso, Media Relations, (408) 845-3185
Todd McKinney, Investor Relations, (317) 971-2094
<PAGE>
EXHIBIT 99.2
GUIDANT CORPORATION
QUARTERLY INCOME STATEMENTS RETROACTIVELY RESTATED FOR
CARDIOTHORACIC SYSTEMS, INC. (CTS)
1999
<TABLE>
<CAPTION>
REPORTED RESULTS
GUIDANT CORPORATION - 1999
--------------------------
Nine Month Third Second First
----- ------ -----
Ended
September 30, 1999
------------------
<S> <C> <C> <C> <C>
Vascular intervention $ 932.0 $ 290.1 $ 317.5 $ 324.4
Cardiac rhythm management 781.7 266.3 269.8 245.6
Cardiac & vascular surgery 40.8 4.5 16.2 20.1
------------------------------------------------------
Total net sales 1,754.5 560.9 603.5 590.1
Cost of products sold 445.0 141.1 157.5 146.4
------------------------------------------------------
Gross profit 1,309.5 419.8 446.0 443.7
Purchased research and development 49.0 - - 49.0
Research and development 235.5 74.0 79.2 82.3
Sales, marketing, and administrative 505.6 164.6 170.0 171.0
Foundation contribution 20.2 20.2 - -
------------------------------------------------------
Total operating expenses 810.3 258.8 249.2 302.3
Other income (expenses), net (100.1) (33.3) (44.4) (22.4)
------------------------------------------------------
Income before income taxes and cumulative effect of accounting change 399.1 127.7 152.4 119.0
Income taxes 151.2 29.0 58.6 63.6
------------------------------------------------------
Income before cumulative effect of accounting change 247.9 98.7 93.8 55.4
Cumulative effect of accounting change (3.3) - - (3.3)
------------------------------------------------------
Net income $ 244.6 $ 98.7 $ 93.8 $ 52.1
======================================================
Earnings per share $ 0.83 $ 0.33 $ 0.32 $ 0.18
Weighted average common shares outstanding 295.24 295.31 295.27 295.14
Earnings per share - assuming dilution $ 0.80 $ 0.32 $ 0.31 $ 0.17
Weighted average common shares outstanding - assuming dilution 305.63 305.54 305.16 306.20
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
REPORTED RESULTS
CTS - 1999
----------
Nine Month Third Second First
Ended ----- ------ -----
September 30, 1999
------------------
<S> <C> <C> <C> <C>
Vascular intervention
Cardiac rhythm management
Cardiac & vascular surgery $21.7 $ 8.1 $ 7.3 $ 6.3
----------------------------------------------------------
Total net sales 21.7 8.1 7.3 6.3
Cost of products sold 7.5 2.6 2.6 2.3
----------------------------------------------------------
Gross profit 14.2 5.5 4.7 4.0
Research and development 7.7 2.5 2.5 2.7
Sales, marketing, and administrative 15.5 5.1 4.8 5.6
----------------------------------------------------------
Total operating expenses 23.2 7.6 7.3 8.3
Other income (expenses), net 1.2 0.3 0.4 0.5
----------------------------------------------------------
Income (loss) before income taxes (7.8) (1.8) (2.2) (3.8)
Income taxes - - - -
----------------------------------------------------------
Net income (loss) ($ 7.8) ($ 1.8) ($ 2.2) ($ 3.8)
==========================================================
Weighted average common shares outstanding 5.20 5.23 5.21 5.17
Weighted average common shares outstanding - assuming dilution 5.59 5.62 5.59 5.56
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
COMBINED - 1999
---------------
Nine Month Ended Third Second First
----- ------ -----
September 30, 1999
------------------
<S> <C> <C> <C> <C>
Vascular intervention $ 932.0 $ 290.1 $ 317.5 $ 324.4
Cardiac rhythm management 781.7 266.3 269.8 245.6
Cardiac & vascular surgery 62.5 12.6 23.5 26.4
----------------------------------------------------------
Total net sales 1,776.2 569.0 610.8 596.4
Cost of products sold 452.5 143.7 160.1 148.7
----------------------------------------------------------
Gross profit 1,323.7 425.3 450.7 447.7
Purchased research and development 49.0 - - 49.0
Research and development 243.2 76.5 81.7 85.0
Sales, marketing, and administrative 521.1 169.7 174.8 176.6
Foundation contribution 20.2 20.2 - -
----------------------------------------------------------
Total operating expenses 833.5 266.4 256.5 310.6
Other income (expenses), net (98.9) (33.0) (44.0) (21.9)
----------------------------------------------------------
Income before income taxes and cumulative effect of accounting
change 391.3 125.9 150.2 115.2
Income taxes 151.2 29.0 58.6 63.6
----------------------------------------------------------
Income before cumulative effect of accounting change 240.1 96.9 91.6 51.6
Cumulative effect of accounting change (3.3) - - (3.3)
----------------------------------------------------------
Net income $ 236.8 $ 96.9 $ 91.6 $ 48.3
==========================================================
Earnings per share $ 0.79 $ 0.32 $ 0.30 $ 0.16
Weighted average common shares outstanding 300.44 300.54 300.48 300.31
Earnings per share - assuming dilution $ 0.76 $ 0.31 $ 0.29 $ 0.15
Weighted average common shares outstanding - assuming dilution 311.22 311.16 310.75 311.76
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SPECIAL ITEMS *
---------------
Nine Month Ended Third Second First
----- ------ -----
September 30, 1999
------------------
<S> <C> <C> <C> <C>
Vascular intervention - - - -
Cardiac rhythm management - - - -
Cardiac & vascular surgery - - - -
----------------------------------------------------
Total net sales - - - -
Cost of products sold ($26.2) ($ 8.3) ($11.0) ($ 6.9)
----------------------------------------------------
Gross profit 26.2 8.3 11.0 6.9
Purchased research and development (49.0) - - (49.0)
Research and development (1.7) (0.7) (0.5) (0.5)
Sales, marketing, and administration (3.2) (0.8) (1.5) (0.9)
Foundation contribution (20.2) (20.2) - -
----------------------------------------------------
Total operating expenses (74.1) (21.7) (2.0) (50.4)
Other income (expenses), net (13.6) 0.8 (14.4)
----------------------------------------------------
Income before income taxes and cumulative effect of accounting
change 86.7 30.8 13.0 42.9
Income taxes 28.1 29.5 2.4 (3.8)
----------------------------------------------------
Income before cumulative effect of accounting change 58.6 1.3 10.6 46.7
Cumulative effect of accounting change 3.3 - - 3.3
----------------------------------------------------
Net income $61.9 $ 1.3 $10.6 $50.0
====================================================
</TABLE>
*Special charges on the cost of products sold, research and development, and
sales, marketing, and administration lines represent the impact of stay-pay and
the purchase accounting write-up of acquired Intermedics inventory sold. Special
items on the other income (expenses) line represent one-time gains on an equity
investment and loss on sale of general surgery product line. Income tax
adjustments reflect the tax impact of the special items, as well as a special
credit in the third quarter of 1999 for a change in the tax code relative to NOL
carryforwards.
4
<PAGE>
<TABLE>
<CAPTION>
1999 COMBINED AS ADJUSTED FOR SPECIAL ITEMS
-------------------------------------------
Nine Month Ended Third Second First
----- ------ -----
September 30, 1999
------------------
<S> <C> <C> <C> <C>
Vascular intervention $ 932.0 $ 290.1 $ 317.5 $ 324.4
Cardiac rhythm management 781.7 266.3 269.8 245.6
Cardiac & vascular surgery 62.5 12.6 23.5 26.4
-----------------------------------------------------------
Total net sales 1,776.2 569.0 610.8 596.4
Cost of products sold 426.3 135.4 149.1 141.8
-----------------------------------------------------------
Gross profit 1,349.9 433.6 461.7 454.6
Research and development 241.5 75.8 81.2 84.5
Sales, marketing, and administrative 517.9 168.9 173.3 175.7
-----------------------------------------------------------
Total operating expenses 759.4 244.7 254.5 260.2
Other income (expenses), net (112.5) (32.2) (44.0) (36.3)
-----------------------------------------------------------
Income before income taxes 478.0 156.7 163.2 158.1
Income taxes 179.3 58.5 61.0 59.8
-----------------------------------------------------------
Net income $ 298.7 $ 98.2 $ 102.2 $ 98.3
===========================================================
Earnings per share $ 0.99 $ 0.33 $ 0.34 $ 0.33
Weighted average common shares outstanding 300.44 300.54 300.48 300.31
Earnings per share - assuming dilution $ 0.96 $ 0.32 $ 0.33 $ 0.32
Weighted average common shares outstanding - assuming dilution 311.22 311.16 310.75 311.76
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
REPORTED RESULTS
----------------
GUIDANT CORPORATION - 1998
--------------------------
Total 1998 Fourth Third Second First
----------- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C>
Vascular intervention $1,002.2 $ 262.8 $ 216.0 $ 256.4 $ 267.0
Cardiac rhythm management 824.6 210.7 213.4 215.1 185.4
Cardiac & vascular surgery 70.2 20.0 16.0 16.3 17.9
--------------------------------------------------------------------
Total net sales 1,897.0 493.5 445.4 487.8 470.3
Cost of sales 422.0 108.9 95.7 110.0 107.4
--------------------------------------------------------------------
Gross profit 1,475.0 384.6 349.7 377.8 362.9
Purchased research and development 118.7 - 90.0 28.7 -
Research and development 276.0 78.2 70.0 65.8 62.0
Sales, marketing, and administrative 558.6 147.2 135.2 141.1 135.1
--------------------------------------------------------------------
Total operating expenses 953.3 225.4 295.2 235.6 197.1
Other income (expenses), net (394.1) (74.3) (219.0) (20.5) (80.3)
--------------------------------------------------------------------
Income (loss) before income taxes 127.6 84.9 (164.5) 121.7 85.5
Income taxes 129.8 44.1 12.5 43.0 30.2
--------------------------------------------------------------------
Net income (loss) ($2.2) $ 40.8 ($177.0) $ 78.7 $ 55.3
====================================================================
Earnings (loss) per share ($0.01) $ 0.14 ($0.60) $ 0.27 $ 0.19
Weighted average common shares outstanding 294.59 294.59 294.66 294.60 294.52
Earnings (loss) per share - assuming dilution ($0.01) $ 0.13 ($0.60) $ 0.26 $ 0.18
Weighted average common shares outstanding -
assuming dilution 294.59 302.96 294.66 301.90 301.88
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
CTS - 1998
----------
Total 1998 Fourth Third Second First
---------- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C>
Vascular intervention
Cardiac rhythm management
Cardiac & vascular surgery $ 16.1 $ 4.9 $ 4.4 $ 3.8 $ 3.0
--------------------------------------------------------------------
Total net sales 16.1 4.9 4.4 3.8 3.0
Cost of products sold 7.2 2.0 1.9 1.7 1.6
--------------------------------------------------------------------
Gross profit 8.9 2.9 2.5 2.1 1.4
Research and development 11.5 3.5 2.7 2.6 2.7
Sales, marketing, and administrative 21.7 5.4 5.3 5.9 5.1
Restructuring charge 0.7 0.7 - - -
--------------------------------------------------------------------
Total operating expenses 33.9 9.6 8.0 8.5 7.8
Other income (expenses), net 2.4 0.5 0.6 0.6 0.7
--------------------------------------------------------------------
Income (loss) before income taxes (22.6) (6.2) (4.9) (5.8) (5.7)
Income taxes - - - - -
--------------------------------------------------------------------
Net income (loss) ($22.6) ($6.2) ($4.9) ($5.8) ($5.7)
====================================================================
Weighted average common shares outstanding 5.05 5.12 5.06 5.02 4.97
Weighted average common shares outstanding -
assuming dilution 5.36 5.48 5.39 5.32 5.26
</TABLE>
<TABLE>
<CAPTION>
1998 - REPORTED COMBINED
------------------------
Total 1998 Fourth Third Second First
---------- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C>
Vascular intervention $1,002.2 $262.8 $216.0 $256.4 $267.0
Cardiac rhythm management 824.6 210.7 213.4 215.1 185.4
Cardiac & vascular surgery 86.3 24.9 20.4 20.1 20.9
-----------------------------------------------------------------
Total net sales 1,913.1 498.4 449.8 491.6 473.3
Cost of products sold 429.2 110.9 97.6 111.7 109.0
-----------------------------------------------------------------
Gross profit 1,483.9 387.5 352.2 379.9 364.3
Purchased research and development 118.7 - 90.0 28.7 -
Research and development 287.5 81.7 72.7 68.4 64.7
Sales, marketing, and administrative 580.3 152.6 140.5 147.0 140.2
Restructuring charge 0.7 0.7 - - -
-----------------------------------------------------------------
Total operating expenses 987.2 235.0 303.2 244.1 204.9
Other income (expenses), net (391.7) (73.8) (218.4) (19.9) (79.6)
-----------------------------------------------------------------
Income (loss) before income taxes 105.0 78.7 (169.4) 115.9 79.8
Income taxes 129.8 44.1 12.5 43.0 30.2
-----------------------------------------------------------------
Net income (loss) $ (24.8) $ 34.6 $(181.9) $ 72.9 $ 49.6
=================================================================
Earnings (loss) per share $ (0.08) $ 0.12 $ (0.61) $ 0.24 $ 0.17
Weighted average common shares outstanding 299.64 299.71 299.72 299.62 299.49
Earnings (loss) per share - assuming dilution $ (0.08) $ 0.11 $ (0.61) $ 0.24 $ 0.16
Weighted average common shares outstanding -
assuming dilution 299.64 308.44 299.72 307.22 307.14
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
SPECIAL CHARGES*
------------------------------------------------------------
Total 1998 Fourth Third Second First
---------- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C>
Vascular intervention - - - - -
Cardiac rhythm management - - - - -
Cardiac & vascular surgery - - - - -
-----------------------------------------------------------
Total net sales - - - - -
Cost of products sold - - - - -
-----------------------------------------------------------
Gross profit - - - - -
Purchased research and development $ (118.7) - $ (90.0) $ (28.7) -
Research and development - - - - -
Sales, marketing, and administrative - - - - -
Restructuring charge (0.7) $ (0.7) - - -
-----------------------------------------------------------
Total operating expenses (119.4) (0.7) (90.0) (28.7) -
Other income (expenses), net 309.2 49.2 200.0 - $ 60.0
-----------------------------------------------------------
Income before income taxes 428.6 49.9 290.0 28.7 60.0
Income taxes 66.3 3.2 31.8 10.1 21.2
-----------------------------------------------------------
Net income $ 362.3 $ 46.7 $ 258.2 $ 18.6 $ 38.8
===========================================================
*Purchased research and development charges relate to acquisitions of InControl, Inc., and NeoCardia, LLC. Other income (expenses)
special charges are (i) a $200 million charge relative to the settlement of litigation with Sulzer Medica, Ltd., (ii) a $60 million
charge that settled lawsuits with C.R. Bard, Inc., (iii) a $9.2 million expense related to patent infringement damages, and (iv) a
$40 million non-cash impairment charge on general surgery goodwill.
</TABLE>
<TABLE>
<CAPTION>
1998 COMBINED AS ADJUSTED FOR SPECIAL
CHARGES
-----------------------------------------------------------------
Total 1998 Fourth Third Second First
----------- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C>
Vascular intervention $1,002.2 $ 262.8 $ 216.0 $ 256.4 $ 267.0
Cardiac rhythm management 824.6 210.7 213.4 215.1 185.4
Cardiac & vascular surgery 86.3 24.9 20.4 20.1 20.9
--------------------------------------------------------------
Total net sales 1,913.1 498.4 449.8 491.6 473.3
Cost of products sold 429.2 110.9 97.6 111.7 109.0
--------------------------------------------------------------
Gross profit 1,483.9 387.5 352.2 379.9 364.3
Research and development 287.5 81.7 72.7 68.4 64.7
Sales, marketing, and administrative 580.3 152.6 140.5 147.0 140.2
--------------------------------------------------------------
Total operating expenses 867.8 234.3 213.2 215.4 204.9
Other income (expenses), net (82.5) (24.6) (18.4) (19.9) (19.6)
--------------------------------------------------------------
Income before income taxes 533.6 128.6 120.6 144.6 139.8
Income taxes 196.1 47.3 44.3 53.1 51.4
--------------------------------------------------------------
Net income $ 337.5 $ 81.3 $ 76.3 $ 91.5 $ 88.4
==============================================================
Earnings per share $ 1.13 $ 0.27 $ 0.25 $ 0.31 $ 0.30
Weighted average common shares outstanding 299.64 299.71 299.72 299.62 299.49
Earnings per share - assuming dilution $ 1.10 $ 0.26 $ 0.25 $ 0.30 $ 0.29
Weighted average common shares outstanding -
assuming dilution 307.63 308.44 308.05 307.22 307.14
</TABLE>
8
<PAGE>
GUIDANT CORPORATION and Subsidaries
Consolidated Balance Sheet
September 30, 1999
(Dollars in millions)
<TABLE>
<CAPTION>
As Previously
Reported
-------------
Assets Guidant CTS Combined
------------- ------ ----------
<S> <C> <C> <C>
Current Assets
Cash and cash equivalents $ 25.5 $ 6.4 $ 31.9
Short-term investments - 19.9 19.9
Accounts receivable, net of allowances of $15.9 (GDT), and $0.5 (CTS) 449.2 5.6 454.8
Other reveivables 22.1 0.4 22.5
Inventories 242.3 2.6 244.9
Deferred income tax 82.0 - 82.0
Prepaid expenses 52.3 2.3 54.6
-----------------------------------
Total Current Assets 873.4 37.2 910.6
Other Assets
Goodwill, net of allowances of $101.9 (GDT) 567.7 - 567.7
Other intangible assets, net of allowances of $24.2 (GDT) 107.5 - 107.5
Deferred income taxes 78.7 - 78.7
Investments 46.2 1.5 47.7
Sundry 33.9 1.1 35.0
-----------------------------------
834.0 2.6 836.6
Property and equipment, net of accumulated depreciation of $306.3 (GDT)
and $4.9 (CTS) 484.4 2.9 487.3
-----------------------------------
$2,191.8 $ 42.7 $2,234.5
===================================
</TABLE>
9
<PAGE>
GUIDANT CORPORATION and Subsidaries
Consolidated Balance Sheet
September 30, 1999
(Dollars in millions)
<TABLE>
<CAPTION>
Guidant CTS Combined
------- ------- --------
<S> <C> <C> <C>
Liabilities and Shareholders' Equity
Current Liabitilites
Accounts payable $ 52.9 $ 1.9 $ 54.8
Employee compensation 100.9 2.3 103.2
Other liabilities 196.8 2.9 199.7
Current portion of long-term debt 430.0 0.5 430.5
------------------------------------
Total Current Liabilities 780.6 7.6 788.2
Noncurrent Liabilities
Long-term debt 569.5 1.0 570.5
Other 116.0 - 116.0
Commitments and contingencies - - -
Shareholders' Equity
Common stock-no par value 192.9 - 192.9
Additional paid-in captial 149.7 103.9 253.6
Retained earnings 497.6 (69.8) 427.8
Deferred cost, ESOP (39.2) - (39.2)
Treasury stock, at cost:
Shares: 676,710 (37.3) - (37.3)
Accumulated other comprehensive income (38.0) - (38.0)
------------------------------------
725.7 34.1 759.8
------------------------------------
$2,191.8 $ 42.7 $2,234.5
====================================
</TABLE>
10
<PAGE>
GUIDANT CORPORATION and Subsidaries
Consolidated Balance Sheet
December 31, 1998
(Dollars in millions)
<TABLE>
<CAPTION>
As Previously Reported
----------------------
Assets Guidant CTS Combined
------------ --- --------
<S> <C> <C> <C>
Current Assets
Cash and cash equivalents $ 15.6 $ 1.7 $ 17.3
Short-term investments - 27.5 27.5
Accounts receivable, net of allowances of $19.5 (GDT) and $0.4 (CTS) 435.4 2.9 438.3
Other receivables 8.3 0.7 9.0
Inventories 193.4 0.9 194.3
Deferred income taxes 83.3 - 83.3
Prepaid expenses 27.5 0.4 27.9
------------------------------------
Total Current Assets 763.5 34.1 797.6
Other Assets
Goodwill, net of allowances of $78.9 (GDT) 202.6 - 202.6
Other intangable assets, net of allowances of $16.6 (GDT) 44.3 - 44.3
Deferred income taxes 73.8 - 73.8
Investments 62.5 11.1 73.6
Sundry 33.6 1.2 34.8
------------------------------------
416.8 12.3 429.1
Property and equipment, net of accumulated depreciation of
$262.3 (GDT) and $0.4 (CTS) 389.2 3.4 392.6
------------------------------------
$1,569.5 $49.8 $1,619.3
====================================
</TABLE>
11
<PAGE>
GUIDANT CORPORATION and Subsidaries
Consolidated Balance Sheet
December 31, 1998
(Dollars in millions)
<TABLE>
<CAPTION>
Guidant CTS Combined
------- --- --------
<S> <C> <C> <C>
Liabilities and Shareholders' Equity
Current Liabitilites
Accounts payable $ 65.3 $ 1.9 $ 67.2
Employee compensation 129.5 1.7 131.2
Other liabilities 137.9 4.3 142.2
Current portion of long-term debt 54.5 0.5 55.0
Payable to Sulzer Medica 200.0 - 200.0
------------------------------------
Total Current Liabilities 587.2 8.4 595.6
Noncurrent Liabilities
Long-term debt 390.0 1.4 391.4
Other 38.4 - 38.4
Commitments and contingencies - - -
Shareholders' Equity
Common stock-no par value 192.5 - 192.5
Additional paid-in captial 197.0 101.9 298.9
Retained earnings 253.0 (62.0) 191.0
Deferred cost, ESOP (41.3) - (41.3)
Treasury stock, at cost:
Shares: 671,618 (27.0) - (27.0)
Accumulated other comprehensive income (20.3) 0.1 (20.2)
------------------------------------
553.9 40.0 593.9
------------------------------------
$1,569.5 $ 49.8 $1,619.3
====================================
</TABLE>
12
|
|