SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1994
Commission File Number 1-6926
C. R. BARD, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1454160
(State of incorporation) (I.R.S. Employer Identification No.)
730 Central Avenue, Murray Hill, New Jersey 07974
(Address of principal executive offices)
Registrant's telephone number,
including area code: (908) 277-8000
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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at October 28, 1994
Common Stock - $.25 par value 52,030,064
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets -
September 30, 1994 and December 31, 1993 1
Statements of Consolidated Income and Retained
Earnings For The Quarter and Nine Months Ended
September 30, 1994 and 1993 2
Condensed Consolidated Statements of Cash Flows
For The Nine Months Ended September 30, 1994
and 1993 3
Notes to Consolidated Financial Statements 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II - OTHER INFORMATION 7
<PAGE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
<CAPTION>
September 30, December 31,
1994 1993
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments $110,200 $ 75,000
Accounts receivable, net 177,800 167,300
Inventories 200,700 173,500
Other current assets 9,200 5,700
Total current assets 497,900 421,500
Long-term investments 17,900 17,700
Property, plant and equipment 290,200 260,900
Less: accumulated depreciation 110,800 92,000
179,400 168,900
Intangible assets, net of amortization 143,900 149,100
Other assets 53,100 41,400
$892,200 $798,600
</TABLE>
<TABLE>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C>
Current Liabilities:
Short-term borrowings and current
maturities of long-term debt $163,900 $ 84,500
Accounts payable 35,800 39,300
Accrued expenses 107,000 124,500
Federal and foreign income taxes 13,300 16,000
Total current liabilities 320,000 264,300
Long-term debt 68,500 68,500
Other long-term liabilities 64,000 82,700
Shareholders' Investment
Preferred stock, $1 par value,
authorized 5,000,000 shares;
none issued --- ---
Common stock, $.25 par value,
authorized 300,000,000 shares;
issued and outstanding 51,986,195
shares and 52,098,124 shares 13,000 13,000
Capital in excess of par value 19,200 15,200
Retained earnings 405,100 367,400
Other 2,400 (12,500)
439,700 383,100
$892,200 $798,600
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these balance sheets.
-1-
<PAGE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME AND RETAINED EARNINGS
(thousands except per share amounts)
(Unaudited)
<CAPTION>
For The Quarter Ended For Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $251,900 $243,500 $755,600 $723,800
Costs and expenses:
Cost of goods sold 123,000 119,100 368,800 354,600
Marketing, selling &
administrative 75,000 73,000 221,700 220,800
Research & development 16,900 17,600 53,300 52,000
214,900 209,700 643,800 627,400
Operating income 37,000 33,800 111,800 96,400
Interest expense 3,800 2,700 9,600 8,200
Other income(expense),
net (600) (63,200) (2,800) (51,800)
Income(loss) before taxes
& effect of accounting
change 32,600 (32,100) 99,400 36,400
Provision for income
taxes 9,800 (6,900) 30,500 14,400
Income(loss) before effect
of accounting change 22,800 (25,200) 68,900 22,000
Effect of change in
accounting principle,
net of taxes --- --- --- (6,100)
Net income(loss) 22,800 (25,200) 68,900 15,900
Retained earnings,
beginning of period 391,200 367,600 367,400 363,800
Treasury stock retired (1,200) --- (8,900) (23,700)
Cash dividends (7,700) (7,300) (22,300) (20,900)
Retained earnings, end
of period $405,100 $335,100 $405,100 $335,100
Weighted average shares
outstanding 51,999 52,370
Income(loss) per share
before effect of
accounting change $ .44 $ (.48) $ 1.33 $ .42
Net income(loss) per
share $ .44 $ (.48) $ 1.33 $ .30
Cash dividends per share $ .15 $ .14 $ .43 $ .40
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
-2-
<PAGE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
(Unaudited)
<CAPTION>
For The Nine Months Ended
September 30,
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 68,900 $ 15,900
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 27,400 24,400
Other noncash items 2,000 5,000
Changes in assets and liabilities:
Current assets (41,200) 7,200
Current liabilities (23,700) 13,900
Other long-term liabilities (18,700) 36,300
14,700 102,700
Cash flows from investing activities:
Capital expenditures (28,500) (22,800)
Other long-term investments, net (1,400) (58,000)
(29,900) (80,800)
Cash flows from financing activities:
Purchase of common stock (9,000) (23,900)
Dividends paid (22,300) (20,900)
Short-term borrowings and other 81,700 47,900
50,400 3,100
Increase in cash and short-term
investments 35,200 25,000
Cash and short-term investments-
beginning of year 75,000 49,800
Cash and short-term investments-
end of period $110,200 $ 74,800
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
-3-
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company believes that it has included all adjustments,
consisting only of normal recurring adjustments, which are
necessary to present fairly the results of operations for these
periods. The results of operations for the interim periods are not
necessarily indicative of results of operations for a full year.
These financial statements should be read in conjunction with the
Consolidated Financial Statements and Notes to Consolidated
Financial Statements, as filed by the Company in the 1993 Annual
Report on Form 10-K.
The Company provides postretirement health care benefits and life
insurance coverage to a limited number of employees at a
subsidiary. Effective January 1, 1993, the Company adopted the
provisions of a new accounting standard related to postretirement
health care benefits resulting in the Company recording an after
tax charge of $6,100,000.
On April 5, 1994 the U.S. District Court in Boston approved the
plea agreement signed by the Company and the federal government on
October 14, 1993. The agreement is in connection with charges
stemming from violations, primarily during the 1980's by the
Company's USCI division, of the Federal Food, Drug and Cosmetic Act
and other statutes. Under the agreement, the Company agreed to pay
a fine and civil damages totaling $61,000,000 which had been
charged against the 1993 third quarter's earnings. In May 1994,
the Company paid $30,500,000 to the government in accordance with
this agreement.
In early October 1994, the Company acquired Angiomed, a German
medical device manufacturer, with 1993 revenue of approximately
$40,000,000. This business will contribute to sales in each of
Bard's three product groups. Among Angiomed's many products are
metal stents, which are currently marketed for urology, radiology,
vascular surgery and gastroenterology applications in many
countries outside the United States. Potential coronary
applications are under development. This acquisition will also
strengthen Bard's position in Germany, the third largest medical
market in the world, and provide greater market penetration for all
of Bard's products within emerging Eastern European markets. The
funds used for this acquisition are included in cash and short-term
investments and were financed by a combination of European cash and
some additional short-term borrowings which were obtained prior to
September 30, 1994 and are reflected in the balance sheet as of
that date. Some modest dilution in earnings per share is anticipated
for the fourth quarter of 1994 as a result of the acquisition, with
no earnings dilution anticipated in 1995 and beyond. Since the beginning
of 1994, including the Angiomed acquisition, the Company has invested
over $83,000,000 in acquiring new businesses or product lines.
- 4 -
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Consolidated net sales for the third quarter of $251,900,000
increased 3% against the third quarter 1993 level of $243,500,000.
Sales for the nine months of 1994 of $755,600,000 increased 4%
against the same period last year. Sales in the U.S. for the third
quarter were $176,900,000, a 2% increase from 1993. Sales outside
the U.S. increased 7% in the quarter to $75,000,000. The currency
translation effect increased international sales in this quarter by
3%. For the nine months ended September 30, 1994, sales in the
U.S. were $536,400,000, up 5%, while international sales totaled
$219,200,000, a 3% increase. For the nine month period ended
September 30, 1994, the total sales increase is primarily due
to an increase in volume, currency translation had essentially no
effect, and the sale of Bard MedSystems division, reported in
February 1993 had the effect of lowering sales by 1%.
PRODUCT GROUP SUMMARY OF NET SALES
(in thousands)
Quarter Ended Nine Months Ended
September 30, September 30,
% %
1994 1993 Change 1994 1993 Change
Cardiovascular $ 90,500 $ 94,700 (4) $280,400 $288,900 (3)
Urological 72,300 64,200 13 214,900 185,800 16
Surgical 89,100 84,600 5 260,300 249,100 4
Net sales $251,900 $243,500 3 $755,600 $723,800 4
In the third quarter of 1994 the urological and surgical products
groups continued to lead the Company's revenue and earning growth.
The new Contigen Bard collagen implant for the treatment of
incontinence was the Company's most important contributor with nine
month 1994 sales in excess of $25,000,000. Cardiovascular sales
remain soft, primarily due to a lack of new product approvals in
the United States at the USCI division as well as price declines in
balloon angioplasty catheters in both the U.S. and Europe. The Company
continues to develop and launch new balloon angioplasty products in
international markets.
The gross profit margins have held steady at 51% for both the
quarter and the nine month periods ended September 30, 1994 and
1993.
Other income(expense), net, totaled to a net expense of $2,800,000
for the nine months ended September 30, 1994 as compared with a net
expense of $51,800,000 for the same period in 1993. Included in
the 1993 amount is a charge to cover the $61,000,000 settlement
reached with the Justice Department. Also, this amount includes a gain of
approximately $15,900,000 from the sale of the MedSystems division to
Baxter International and several nonrecurring charges
of over $5,000,000 during the first quarter of 1993.
- 5 -
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Effective January 1, 1993 the Company adopted Statements of
Financial Accounting Standards No. 106, "Accounting for Post
Retirement Benefits Other Than Pensions" and No. 109, "Accounting
for Income Taxes". The adoption of Statement No. 106 is further
discussed in the accompanying footnotes.
The Company results for the quarter ended September 30, 1994 was
net income of $22,800,000 or $.44 per share as compared with a net
loss of $25,200,000 or $(.48) per share for the same quarter in
1993. The effect of the Justice Department settlement during the
third quarter of 1993 was to reduce earnings by $45,400,000 or $.87
per share. Without the settlement provision, the Company would
have reported net income of $20,200,000 or $.39 per share.
Cash and short-term investments have increased during the nine
month period ended September 30, 1994 to accumulate sufficient
funds for the preparation of acquiring Angiomed in October 1994
(see footnotes for further discussion).
Short-term borrowings have increased during the first nine months
of 1994 by approximately $79,400,000. These additional borrowings
were used for general working capital, a portion was used for the
payment of the Department of Justice settlement (see footnotes for
further discussion) and some foreign currency borrowings were made
in anticipation of acquiring Angiomed in October 1994.
Accrued expenses declined by $20,200,000 and other long-term
liabilities declined by $18,700,000 between December 31, 1993 and
September 30, 1994. These reductions were mainly a result of the
Company paying $30,500,000 to the federal government and the
reclassification of $15,300,000 from long-term to short-term for
its obligations under the Department of Justice settlement
agreement.
Other shareholders' investment has increased by $14,900,000 in the
first nine months of 1994 primarily as a result of foreign currency
translation adjustment.
During the first nine months of 1993 the Company invested over
$55,000,000 acquiring several companies or product lines. In March
1993, the Company acquired the assets of Solco Hospital Products
Group, Inc., whose principal products are autotransfusion devices.
This acquisition has strengthened the Company's overall presence in
blood salvaging products. In September 1993, the Company acquired
Pilot Cardiovascular Systems, Inc., a manufacturer of a patented
deflectable-tipped angioplasty guidewire. The Pilot guidewire will
provide the Company with a new technology to enhance its market
position in the radiopaque guidewire segment of its cardiology
business.
- 6 -
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
During the first nine months of 1994 and 1993, the Company acquired
350,000 and 978,600 respectively, of its common shares which were
retired.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) There were no reports on Form 8-K filed by the Company
during the quarter ended September 30, 1994.
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.
C. R. BARD, INC.
(Registrant)
William C. Bopp /s/
William C. Bopp
Senior Vice President and
Chief Financial Officer
Charles P. Grom /s/
Charles P. Grom
Controller
DATE: November 14, 1994
- 7 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 110,200
<SECURITIES> 0
<RECEIVABLES> 177,800
<ALLOWANCES> 0
<INVENTORY> 200,700
<CURRENT-ASSETS> 497,900
<PP&E> 290,200
<DEPRECIATION> 110,800
<TOTAL-ASSETS> 892,200
<CURRENT-LIABILITIES> 320,000
<BONDS> 68,500
<COMMON> 13,000
0
0
<OTHER-SE> 426,700
<TOTAL-LIABILITY-AND-EQUITY> 892,200
<SALES> 755,600
<TOTAL-REVENUES> 755,600
<CGS> 368,800
<TOTAL-COSTS> 643,800
<OTHER-EXPENSES> 2,800
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,600
<INCOME-PRETAX> 99,400
<INCOME-TAX> 30,500
<INCOME-CONTINUING> 68,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,900
<EPS-PRIMARY> 1.33
<EPS-DILUTED> 1.33
</TABLE>
