<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 10-Q
________________
(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 No. 333-13523
DADE BEHRING INC.
(Formerly Dade International Inc.)
(Exact name of Registrant as specified in its charter)
Delaware 36-3949533
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1717 Deerfield Road, Deerfield, Illinois 60015-0778
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 267-5300
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 [ ]
The number of shares of the Registrant's Common Stock, $.01 par value per
share, outstanding as of May 15, 2000, the latest practicable date, was 1,000
shares.
<PAGE>
DADE BEHRING INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE NO.
- -------------------------------------------------------------------------------------------------
Item 1. Financial Statements (unaudited)
<S> <C> <C>
Condensed Consolidated Balance Sheet as of December 31, 1999 and 2
March 31, 2000 (unaudited)
Condensed Consolidated Statement of Operations and Comprehensive 3
Income (Loss) (unaudited) for the three months ended March 31, 1999
and March 31, 2000
Condensed Consolidated Statement of Cash Flows (unaudited) for the 4
three months ended March 31, 1999 and March 31, 2000
Condensed Consolidated Statement of Changes in Stockholder's Equity 5
(Deficit) for the years ended December 31, 1998 and 1999 and for the
three months ended March 31, 2000 (unaudited)
Notes to Condensed Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition and 9
Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
PART II OTHER INFORMATION
- -------------------------------------------------------------------------------------------------
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Signature 13
</TABLE>
1
<PAGE>
DADE BEHRING INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in millions, except share-related data)
<TABLE>
<CAPTION>
ASSETS December 31, March 31,
------ 1999 2000
---- ----
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents......................................... $ 49.8 $ 28.0
Restricted cash................................................... 11.4 -
Accounts receivable, net.......................................... 330.9 314.0
Inventories....................................................... 256.2 268.1
Prepaid expenses and other current assets......................... 28.7 16.2
Deferred income taxes............................................. 78.2 81.5
-------- --------
Total current assets........................................... 755.2 707.8
-------- --------
Property, plant and equipment, net.................................... 341.0 337.6
Debt issuance costs, net.............................................. 43.3 41.9
Goodwill, net......................................................... 125.8 125.3
Deferred income taxes................................................. 286.7 291.0
Other assets.......................................................... 113.8 130.3
-------- --------
Total assets................................................... $1,665.8 $1,633.9
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
----------------------------------------------
Current liabilities:
Current portion of long-term debt................................. $ 6.0 $ 12.9
Short-term debt................................................... 74.9 88.2
Accounts payable.................................................. 125.9 98.8
Accrued liabilities and other..................................... 241.9 196.0
-------- --------
Total current liabilities...................................... 448.7 395.9
-------- --------
Long-term debt, less current portion.................................. 902.4 939.5
Senior subordinated notes............................................. 350.0 350.0
Other liabilities..................................................... 107.5 98.4
-------- --------
Total liabilities.............................................. 1,808.6 1,783.8
-------- --------
Commitments and contingencies......................................... - -
Stockholder's equity (deficit):
Common stock, $.01 par value, 1,000 shares authorized, issued
and outstanding................................................. - -
Additional paid-in capital........................................ 184.1 184.1
Unearned stock-based compensation................................. (8.1) (7.1)
Accumulated deficit............................................... (247.9) (256.4)
Accumulated other comprehensive loss.............................. (70.9) (70.5)
-------- --------
Total stockholder's equity (deficit)........................... (142.8) (149.9)
-------- --------
Total liabilities and stockholder's equity (deficit)........... $1,665.8 $1,633.9
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
DADE BEHRING INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1999 2000
---- ----
<S> <C> <C>
Net sales.................................................. $319.0 $288.6
Operating costs and expenses:
Cost of goods sold....................................... 128.2 125.2
Marketing and administrative expenses.................... 125.3 118.2
Research and development expenses........................ 21.0 23.6
Goodwill amortization expense............................ 1.5 1.2
------ ------
Income from operations..................................... 43.0 20.4
------ ------
Other income (expense):
Interest expense, net.................................... (20.5) (33.6)
Other.................................................... 2.0 (1.0)
------ ------
Income (loss) before taxes................................. 24.5 (14.2)
Income tax expense (benefit)............................... 9.8 (5.7)
------ ------
Net Income (loss).......................................... 14.7 (8.5)
------ ------
Other comprehensive (loss) income, before tax:
Foreign currency translation adjustments.................. (12.7) 0.4
Unrealized gain on marketable securities.................. 0.2 -
------ ------
Other comprehensive (loss) income.......................... (12.5) 0.4
Income tax expense (benefit) related to items of
comprehensive loss (income)............................... - -
------ ------
Other comprehensive loss (income), net of tax.............. (12.5) 0.4
------ ------
Comprehensive income (loss)................................ $ 2.2 $ (8.1)
====== ======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
DADE BEHRING INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1999 2000
---- ----
<S> <C> <C>
Operating Activities:
Net income (loss)..................................................... $ 14.7 $ (8.5)
Adjustments to reconcile net income (loss)
to net cash utilized by operating activities:
Depreciation and amortization expense............................... 14.6 17.9
Stock-based compensation expense.................................... 1.5 1.0
Deferred income taxes............................................... 9.9 (7.6)
Changes in balance sheet items:
Accounts receivable, net.......................................... 3.3 10.4
Inventories....................................................... (6.0) (12.6)
Prepaid expenses.................................................. (1.3) (5.0)
Accounts payable.................................................. (10.3) (25.1)
Accrued liabilities............................................... (14.1) (43.5)
Other, net........................................................ (16.6) (2.5)
------ ------
Net cash flow utilized by operating activities................. (4.3) (75.5)
------ ------
Investing Activities:
Acquisitions and purchase price adjustments, net of acquired cash..... (3.8) (1.0)
Capital expenditures.................................................. (34.0) (20.7)
------ ------
Net cash flow utilized by investing activities................. (37.8) (21.7)
------ ------
Financing Activities:
Decrease in restricted cash........................................... -- 11.4
Net proceeds/repayments related to short-term debt.................... 1.3 16.0
Proceeds from borrowings under revolving credit facility.............. 105.0 131.0
Repayment of borrowings under revolving credit facility............... (76.0) (81.5)
Repayment of borrowings under long-term loans......................... (0.8) (1.5)
------ ------
Net cash flow provided by financing activities................. 29.5 75.4
------ ------
Effect of foreign exchange rates on cash................................ 0.1 --
------ ------
Net decrease in cash and cash equivalents...................... (12.5) (21.8)
Cash and Cash Equivalents:
Beginning of period................................................... 25.8 49.8
------ ------
End of period......................................................... $ 13.3 $ 28.0
====== ======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
DADE BEHRING INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)
(Dollars in millions)
<TABLE>
<CAPTION>
Notes Accumulated Total
Common Stock Additional Receivable Unearned Other Stockholder's
-------------- Paid-in on Capital Stock-Based Accumulated Comprehensive Equity
Shares Amount Capital Contribution Compensation Deficit Loss (Deficit)
------ ------ ---------- ------------ ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 .... 1,000 -- 490.2 (0.7) (21.8) (252.9) (10.7) 204.1
----- ---- ------- ----- ------ ------- ------ -------
Net income ...................... 43.5 43.5
Payments on notes receivable .... 0.5 0.5
Issuance of unearned stock-based
compensation .................. 3.6 (3.6) --
Adjustment of unearned stock-
based compensation ............ (0.8) 0.8 --
Amortization of unearned stock-
based compensation ............ 13.1 13.1
Unrealized loss on marketable
securities .................... (0.3) (0.3)
Cumulative translation
adjustment .................... (11.6) (11.6)
----- ---- ------- ----- ------ ------- ------ -------
Balance at December 31, 1998 .... 1,000 -- 493.0 (0.2) (11.5) (209.4) (22.6) 249.3
----- ---- ------- ----- ------ ------- ------ -------
Net loss ........................ (38.5) (38.5)
Capital contribution from
parent ........................ 80.0 80.0
Cash dividend to parent on
recapitalization .............. (420.1) (420.1)
Payments on notes receivable .... 0.2 0.2
Issuance of unearned stock-based
compensation .................. 8.8 (8.8) --
Cancellation of stock options ... (1.2) 1.2 --
Amortization of unearned stock-
based compensation ............ 11.0 11.0
Issuance of stock-based
compensation .................. 1.3 1.3
Adjustment of stock-based
compensation .................. (1.0) (1.0)
Compensation expense related to
recapitalization .............. 22.7 22.7
Unrealized gain on marketable
securities .................... 0.4 0.4
Tax benefit of option exercises . 0.6 0.6
Minimum pension liability
adjustment .................... (1.8) (1.8)
Cumulative translation
adjustment .................... (46.9) (46.9)
----- ---- ------- ----- ------ ------- ------ -------
Balance at December 31, 1999 .... 1,000 $ -- $ 184.1 $ -- $ (8.1) $(247.9) $(70.9) $(142.8)
===== ==== ======= ===== ====== ======= ====== =======
(Unaudited)
Net loss ........................ (8.5) (8.5)
Amortization of unearned stock
based compensation ............ 1.0 1.0
Cumulative translation
adjustment .................... 0.4 0.4
----- ---- ------- ----- ------ ------- ------ -------
Balance at March 31, 2000 ....... 1,000 $ -- $ 184.1 $ -- $ (7.1) $(256.4) $(70.5) $(149.9)
===== ==== ======= ===== ====== ======= ====== =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
DADE BEHRING INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Business
Dade Behring Inc. (the "Company"), formerly Dade International Inc., was
incorporated in Delaware in 1994 and is a wholly-owned subsidiary of Dade
Behring Holdings, Inc. ("Holdings"), formerly Diagnostics Holding Inc., Bain
Capital, Inc., GS Capital Partners, L.P. (an affiliate of Goldman Sachs Group,
L.P.), their respective related investors ("Bain" and "Goldman Sachs"), Aventis
S.A., formerly Hoechst A.G., and certain of its affiliates ("Aventis S.A.")
and the management of the Company own substantially all of the capital stock of
Holdings. The Company develops, manufactures and markets in vitro diagnostic
equipment, reagents, consumable supplies and services worldwide.
Effective December 16, 1994, the Company acquired (the "Dade Acquisition")
the worldwide in vitro diagnostics products manufacturing and services
businesses and net assets of Baxter Diagnostics Inc. and certain of its
affiliates, from Baxter International Inc. and its affiliates ("Baxter"). The
Dade Acquisition was accounted for as a purchase.
Effective May 1, 1996, the Company acquired (the "Chemistry Acquisition")
the worldwide in vitro diagnostics business ("Dade Chemistry") of E.I. du Pont
de Nemours and Company. The operating results and acquired assets and assumed
liabilities of the Chemistry Acquisition, which was accounted for as a purchase,
have been reflected in the Company's consolidated financial statements since May
1, 1996.
Effective October 1, 1997, Holdings acquired (the "Behring Combination") the
stock and beneficial interest of various subsidiaries of Aventis S.A. that
operated its worldwide human in vitro diagnostic business ("Behring"). The
stock and beneficial interest was contributed to the Company effective October
1, 1997. The operating results and acquired assets and assumed liabilities of
the Behring Combination, which was accounted for as a purchase, have been
reflected in the Company's consolidated financial statements since October 1,
1997.
2. Basis of Presentation
The condensed consolidated financial statements have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
regulations. The Company believes the disclosures included in the unaudited
condensed consolidated financial statements, when read in conjunction with the
consolidated financial statements of the Company included in the Company's 1999
Annual Report on Form 10-K and notes thereto, are adequate to make the
information presented not misleading. Certain reclassifications have been made
to prior period balances to conform to the current year presentation. In
management's opinion, the condensed consolidated financial statements reflect
all adjustments necessary to summarize fairly the consolidated financial
position, results of operations, and cash flows for such periods. The results
of operations for the three months ended March 31, 2000 are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 2000.
6
<PAGE>
DADE BEHRING INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
3. Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or
market. Cost includes materials, labor and manufacturing overhead costs. Market
for raw materials is based on replacement costs and, for other inventory
classifications, on net realizable value. Appropriate consideration is given to
deterioration, obsolescence and other factors in evaluating net realizable
value. Inventories consist of the following (in millions):
<TABLE>
December 31, March 31,
1999 2000
---- ----
<S> <C> <C>
Raw materials................... $ 45.9 $ 45.8
Work-in-process................. 43.1 39.9
Finished products............... 167.2 182.4
------ ------
Total inventories......... $256.2 $268.1
====== ======
</TABLE>
4. Restructuring
During the quarter ended March 31, 2000, the Company incurred costs of $1.1
million and severed three employees related to the Behring Combination reserve,
and incurred $1.4 million and severed eight employees related to the June 1999
reserve.
5. Business Segment and Geographic Information
The business of the Company is in vitro diagnostic ("IVD") products. The
operating segments derive substantially all their revenues from the
manufacturing and marketing of IVD products and services. The Company's
operating structure includes the following operating segments: United States,
Germany, Other Europe, Asia-Pacific, and All Other.
EBITDA as defined by the Company and its lenders, represents the sum of net
income (loss), interest, taxes, depreciation and amortization, non-recurring
charges, including non-cash stock based compensation expenses, Y2K remediation
costs, integration costs, restructuring charges and certain non-cash and/or non-
recurring charges, such as personnel retention and severance, moving and start-
up costs associated with the transfer of manufacturing capacity from Miami,
Florida to Marburg, Germany, consulting and costs related to the consolidation
of information technology. EBITDA is in management's opinion a financial
indicator of the Company's ability to service or incur indebtedness. While the
Company does not advocate EBITDA to be considered as a substitute for net income
or cash flows, it is the primary financial metric used by management.
7
<PAGE>
DADE BEHRING INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
Financial information by segment for the three months ended March 31, 1999
and 2000 is summarized as follows (in millions):
<TABLE>
<CAPTION>
United Other Asia- All
States Germany Europe Pacific Other(1) Total
------ ------- ------ ------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Three Months ended March 31, 1999
Revenue from external customers........ $157.3 $42.5 $84.1 $25.4 $9.7 $319.0
Intersegment revenues.................. 36.2 37.6 9.1 --- --- 82.9
Segment EBITDA......................... 28.7 (2.6) 37.2 3.7 0.5 67.5
Three Months ended March 31, 2000
Revenue from external customers........ $147.9 $29.6 $75.4 $25.9 $9.8 $288.6
Intersegment revenues.................. 36.4 46.0 5.1 --- --- 87.5
Segment EBITDA......................... 15.9 (7.7) 30.1 4.8 2.5 45.6
</TABLE>
- --------
(1) Includes the effects of purchase accounting which have not been reflected
in segment accounting records. Consequently, the impact of asset write-
downs resulting from bargain purchases are reflected in the All Other
column. Segment EBITDA includes unallocated intercompany profit.
A reconciliation of segment EBITDA to income (loss) before income taxes for
the three months ended March 31, 1999 and 2000 is summarized as follows (in
millions):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1999 2000
---- ----
<S> <C> <C>
Segment EBITDA............................................ $ 67.0 $ 43.1
Other EBITDA.............................................. .5 2.5
------ ------
Total EBITDA............................................. 67.5 45.6
Less: Depreciation and amortization..................... (14.6) (17.9)
Interest expense, net (1).......................... (19.1) (31.8)
Year 2000 remediation costs........................ (3.8) ---
Stock-based compensation........................... (1.5) (1.0)
Integration costs.................................. (3.5) --
Non-recurring and/or non-cash charges and other.... (.5) (9.1)
------ ------
Income (loss) before income taxes......................... $ 24.5 $(14.2)
====== ======
</TABLE>
- --------
(1) Differs from the income statement by the amount of amortization of deferred
financing fees, which is included within depreciation and amortization
above.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Company's 1999 Annual Report on Form 10-K contains management's
discussion and analysis of the Company's financial condition and results of
operations as of and for the year ended December 31, 1999. The following
management's discussion and analysis focuses on material changes since that time
and should be read in conjunction with the 1999 Annual Report on Form 10-K.
Relevant trends that are reasonably likely to be of a material nature are
discussed to the extent known.
Certain statements included in this discussion are forward-looking, such as
statements relating to estimates of operating and capital expenditure
requirements, future revenue and operating income levels, cash flow and
liquidity. Such forward-looking statements are based on management's current
expectations and are subject to a number of risks and uncertainties that could
cause actual results in the future to differ significantly from results
expressed or implied in any forward-looking statements made by, or on behalf of,
the Company. These risks and uncertainties include, but are not limited to,
uncertainties relating to global economic and business conditions, governmental
and regulatory policies, and the competitive environment in which the Company
operates. These and other risks are discussed in some detail below as well as
in other documents filed by the Company with the Securities and Exchange
Commission.
Results of Operations
Net Sales. Net sales for the three months ended March 31, 2000 totaled
$288.6 million as compared to $319.0 million in the comparable year-ago quarter.
The $30.4 million or 9.5% decrease in net sales for the quarter is
attributable primarily to fluctuations in foreign exchange rates, sold
businesses and accelerated purchases into the fourth quarter of 1999 by
customers in anticipation of Year 2000. The quarter was impacted by planned
declines in non-core Paramax(R), Stratus(R), aca(R) and other product lines,
offset by strong sales growth from Dimension(R), Stratus CS(R), Hemostasis and
other core products. Restated for sold businesses and foreign exchange rates as
compared to the year-ago quarter, the Company experienced a $14.4 million, or 5%
decrease in net sales.
Gross Profit. Gross profit for the three months ended March 31, 2000
decreased $27.4 million or 14.4% to $163.4 million as compared to $190.8
million in the comparable year-ago quarter. Gross margins for the three months
ended March 31, 2000 were 56.6% compared to 59.8% in the comparable year-ago
quarter.
The decrease in gross profit for the quarter ended March 31, 2000 is
attributable primarily to product mix offset by decreased non-recurring costs
related to the Behring integration and Year 2000 remediation expenses.
Management expects the continued growth in its service and third-party product
distribution businesses which, while increasing sales and gross profit, will
continue to decrease year-over-year gross margin percentage.
Marketing and Administrative Expense. Marketing and administrative expense
for the three months ended March 31, 2000 decreased $7.1 million or 5.7% to
$118.2 million as compared to $125.3 million in the comparable year-ago
quarter.
The decrease in marketing and administrative expense for the quarter ended
March 31, 2000 is attributable primarily to decreased non-recurring Year 2000
remediation expenses and Behring integration costs.
9
<PAGE>
Research and Development Expense. Research and development expense for the
three months ended March 31, 2000 totaled $23.6 million as compared to $21.0
million in the comparable year-ago quarter.
The $2.6 million or 12.4% increase in research and development expense for
the three month period is attributable to increased investment in new products.
Research and development expenditures are primarily focused on the
development of new instrument platforms, expansion of test menus and investment
in advanced diagnostics and point of care technologies.
Income from Operations. Income from operations for the quarter decreased
$22.6 million to $20.4 million as compared to $43.0 million in the comparable
year-ago quarter.
The decrease in income from operations for the quarter ended March 31, 2000
is due primarily to lower gross profit offset by decreased marketing and
administrative expense. Excluding non-recurring charges, income from operations
for the quarter ended March 31, 2000 would have been $27.8 million.
Net Interest Expense. Net interest expense for the three months ended March
31, 2000 totaled $33.6 million, a $13.1 million increase over the same period in
1999. The increase in net interest expense for the quarter ended March 31, 2000
is attributable to higher borrowing levels as a result of the June 1999
recapitalization.
Other Income/Expense. Other expense for the quarter ended March 31, 2000
totaled $1.0 million, as compared to $2.0 million of income in the year-ago
comparable quarter. This decrease in income is due to the settlement of a
patent infringement matter included in the 1999 results.
Income Taxes. The effective income tax rate for the quarter ended March 31,
2000 was approximately 40%, which is consistent with the rate recorded for the
quarter ended March 31, 1999 to reflect the estimated full year effective tax
rate for 2000.
Net Income (Loss). Net loss for the three months ended March 31, 2000
totaled $8.5 million, a $23.2 million decrease from net income as compared to
the same period in 1999. The decrease in net income for the quarter ended March
31, 2000 is attributable primarily to lower income from operations.
Liquidity and Capital Resources
The Company's primary liquidity requirements are for working capital, capital
expenditures, restructuring expenditures and debt service. Historically, the
Company has funded its liquidity needs with a combination of cash flows from
operations, borrowings under its revolving credit facility and other short-term
borrowing arrangements. Management believes cash flows from operating
activities, together with available short-term and revolving credit facilities
under the Company's existing credit agreements, will be sufficient to permit the
Company to meet its foreseeable financial obligations and to fund its operations
and planned investments.
As of March 31, 2000 as compared to December 31, 1999, working capital
increased $55.5 million to $303.5 million. The 22.4% increase is attributable
primarily to declines in accounts payable and accrued liabilities.
10
<PAGE>
Capital expenditures, including instrument placements in customer locations,
totaled $20.7 million for the three months ended March 31, 2000, a $13.3 million
or 39% decrease as compared to the same period in 1999. The decrease in capital
expenditures for the quarter is attributable primarily to decreased Behring
integration spending.
Pursuant to the $1.25 billion Senior Bank Credit Facility Agreement, the
Euro-denominated credit facility commitment was permanently reduced to an amount
equal to the sum of all commitments to provide lines of credit to the German
subsidairy. As a result, the borrowing capacity under the Euro-denominated
credit facility was reduced by approximately $50 million.
Inflation affects the cost of goods and services used by the Company.
Inflation has been modest in recent years. Overall product prices have been
relatively stable during the past three years, and the Company continues to
mitigate the adverse effects of inflation primarily through new product
offerings, improved productivity and cost containment and improvement programs.
Outlook
The Company is exploring ways to redesign, combine and streamline its global
operations to make them more efficient, while at the same time remaining
customer focused. In connection with the plan for reducing the Company's overall
cost structure, the Company expects to record a restructuring charge in the
second quarter of 2000.
The amount of the charge is unknown at this time since it is dependent upon
several factors, including the number of individuals who are intended to be
terminated and the amount of termination benefits to be paid under various
proposed severance programs.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Company's 1999 Annual Report on Form 10-K contains quantitative and
qualitative disclosures about market risk as of and for the year ended December
31, 1999. No material changes in the Company's market risk have occurred since
December 31, 1999.
11
<PAGE>
PART II
Item 1. Legal Proceedings.
The Company is involved in a number of legal proceedings arising in the
ordinary course of its business, none of which is expected to have a material
adverse effect on the Company's business or financial condition.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
The following exhibits are included herein:
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
None.
12
<PAGE>
SIGNATURE
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.
DADE BEHRING INC.
-----------------
(Registrant)
Date: May 15, 2000 By: /s/ John M. Duffey
------------------
John M. Duffey
Corporate Vice President and Controller
(Duly authorized Officer of Registrant)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 28,000
<SECURITIES> 0
<RECEIVABLES> 314,000
<ALLOWANCES> 0
<INVENTORY> 268,100
<CURRENT-ASSETS> 707,800
<PP&E> 337,600
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,633,900
<CURRENT-LIABILITIES> 395,900
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (149,900)
<TOTAL-LIABILITY-AND-EQUITY> 1,633,900
<SALES> 288,600
<TOTAL-REVENUES> 288,600
<CGS> 125,200
<TOTAL-COSTS> 268,200
<OTHER-EXPENSES> 1,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,600
<INCOME-PRETAX> (14,200)
<INCOME-TAX> (5,700)
<INCOME-CONTINUING> (8,500)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,500)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
