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 June 30, 1994
Commission File Number 1-6926
C. R. BARD, INC.
(Exact name of registrant as specified in its charter)
New Jersey
(State of incorporation)
22-1454160
(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 July 31, 1994
Common Stock - $.25 par value 51,893,628
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C. R. BARD, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets -
June 30, 1994 and December 31, 1993 1
Condensed Statements of Consolidated Income
and Retained Earnings For The Quarter and
Six Months Ended June 30, 1994 and 1993 2
Condensed Consolidated Statements of Cash Flows
For The Six Months Ended June 30, 1994 and 1993 3
Notes to Consolidated Financial Statements 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations 4
PART II - OTHER INFORMATION 6
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C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
<CAPTION>
June 30, December 31,
1994 1993
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments $ 72,400 $ 75,000
Accounts receivable, net 175,400 167,300
Inventories 186,600 173,500
Other current assets 7,300 5,700
Total current assets 441,700 421,500
Long-term investments 17,800 17,700
Property, plant and equipment, net 177,100 168,900
Intangible assets, net of amortization 144,400 149,100
Other assets 45,300 41,400
$826,300 $798,600
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C>
Current Liabilities:
Short-term borrowings and current
maturities of long-term debt $124,300 $ 84,500
Accounts payable 35,400 39,300
Accrued expenses 98,000 124,500
Federal and foreign income taxes 13,600 16,000
Total current liabilities 271,300 264,300
Long-term debt 68,500 68,500
Other long-term liabilities 67,400 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 51,893,628
shares and 52,098,124 shares 13,000 13,000
Capital in excess of par value 16,600 15,200
Retained earnings 391,200 367,400
Other (1,700) (12,500)
419,100 383,100
$826,300 $798,600
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these balance sheets.
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<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED INCOME AND RETAINED EARNINGS
(thousands except per share amounts)
(Unaudited)
<CAPTION>
For Quarter Ended For Six Months Ended
June 30, June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $256,300 $243,900 $503,700 $480,300
Costs and expenses:
Cost of goods sold 124,500 119,000 245,800 235,500
Marketing, selling and
administrative 74,900 74,900 146,700 147,800
Research and development 18,700 17,300 36,400 34,400
218,100 211,200 428,900 417,700
Operating income 38,200 32,700 74,800 62,600
Interest expense 3,200 2,800 5,800 5,500
Other income(expense),
net (1,200) (900) (2,200) 11,400
Income before taxes and
effect of accounting
change 33,800 29,000 66,800 68,500
Provision for income
taxes 10,500 8,700 20,700 21,300
Income before effect of
accounting change 23,300 20,300 46,100 47,200
Effect of change in
accounting principle,
net of taxes --- --- --- (6,100)
Net income 23,300 20,300 46,100 41,100
Retained earnings,
beginning of period 377,900 363,700 367,400 363,800
Treasury stock retired (2,700) (9,700) (7,700) (23,700)
Cash dividends (7,300) (6,700) (14,600) (13,600)
Retained earnings, end of
period $391,200 $367,600 $391,200 $367,600
Weighted average shares
outstanding 51,992 52,579
Income per share before
effect of accounting
change $ .45 $ .39 $ .89 $ .90
Net income per share $ .45 $ .39 $ .89 $ .78
Cash dividends per share $ .14 $ .13 $ .28 $ .26
<FN>
</TABLE>
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
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C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
(Unaudited)
<CAPTION>
For The Six Months Ended
June 30,
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 46,100 $ 41,100
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 17,100 14,700
Other non-cash items 1,900 1,300
Changes in assets and liabilities:
Current assets (22,800) (4,000)
Current liabilities (32,800) (100)
Other long-term liabilities (15,300) 6,400
(5,800) 59,400
Cash flows from investing activities:
Capital expenditures (18,900) (11,000)
Other long-term investments, net 3,000 (18,600)
(15,900) (29,600)
Cash flows from financing activities:
Purchase of common stock (7,700) (23,900)
Dividends paid (14,600) (13,600)
Short-term borrowings and other 41,400 16,500
19,100 (21,000)
Increase(decrease) in cash and
short-term investments (2,600) 8,800
Cash and short-term investments-
beginning of year 75,000 49,800
Cash and short-term investments-
end of period $ 72,400 $ 58,600
<FN>
</TABLE>
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
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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.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Consolidated net sales for the second quarter of $256,300,000
increased 5 percent over the second quarter 1993 net sales of
$243,900,000. Sales for the first six months of 1994 of
$503,700,000 increased 5 percent over the $480,300,000 for the same
period last year. Sales in the U.S. for the second quarter of 1994
were $180,100,000, up 7 percent from 1993, while international
sales of $76,200,000 were level with last year. The currency
translation effect reduced sales outside the U.S. in the second
quarter of 1994 by 2 percent. For the first six months of 1994,
U.S. sales totaled $359,500,000, up 6 percent, while international
sales increased 1 percent to $144,200,000. Currency translation
for the first half of 1994 lowered worldwide sales by approximately
1 percent, and the sale of Bard MedSystems division, reported in
February 1993, had the impact of lowering sales an additional 1
percent.
PRODUCT GROUP SUMMARY OF NET SALES
(in thousands)
Quarter Ended June 30, Six Months Ended June 30,
Percent Percent
1994 1993 Change 1994 1993 Change
Cardiovascular $ 97,500 $100,700 (3) $189,900 $194,200 (2)
Urological 71,600 61,400 17 142,600 121,600 17
Surgical 87,200 81,800 7 171,200 164,500 4
Net Sales $256,300 $243,900 5 $503,700 $480,300 5
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C. R. BARD, INC. AND SUBSIDIARIES
In the second quarter of 1994 the urological and surgical product
groups continued to lead the Company's revenue and earnings growth.
Contigen, the new stress urinary incontinence product was the
Company's most important contributor with first-half revenue in
excess of $15 million. Cardiovascular sales remain soft, primarily
due to a lack of new product approvals in the United States at the
USCI division. The Company continues to develop and launch new
balloon angioplasty products in international markets.
The gross profit margins of 51 percent remain the same for the six
months ended June 30, 1994 and 1993.
Other income(expense), net, totaled $2,200,000 in expenses for the
first half of 1994 and $11,400,000 in revenues for the same period
last year. Included in the 1993 amount is approximately
$15,900,000 gain from the sale of the MedSystems division to Baxter
International and several nonrecurring charges of over $5,000,000.
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.
Second quarter consolidated net income of $23,300,000 increased 15%
from the $20,300,000 second quarter results of last year. Net
income for the six months of 1994 of $46,100,000 reflects an
increase of 12% from $41,100,000 for the same period last year.
For the first six months of 1994, the Company has increased
its short-term borrowings by approximately $40,000,000. These
additional borrowings were used for general working capital and a
portion was used for the payment of the Department of Justice
settlement.
Accrued expenses declined by $26,500,000 and other long-term
liabilities declined by $15,300,000. 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 $10,800,000 in the
first six months of 1994 mainly as a result of translation
adjustments.
During the first six months of 1993 the Company invested over
$19,000,000 acquiring the assets of several companies or product
lines. The largest of these companies acquired were the assets of
Solco Hospital Products Group, Inc., whose principal products are
autotransfusion devices.
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C. R. BARD, INC. AND SUBSIDIARIES
During the first six months of 1994 and 1993, the Company acquired
300,000 and 978,600 respectively, of its common shares which were
retired.
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 million which had been
charged against the 1993 third quarter's earnings. In May 1994,
the Company paid $30.5 million to the government in accordance with
this agreement.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
By letter dated May 20, 1993, EPA notified Bard Urological
Division's Glens Falls facility that it may be a Potentially
Responsible Party ("PRP") relative to clean-up of the Frontier
Chemical site, which is located in Niagara Falls, New York. In
September 1993, the Company entered into a consent order
concerning the first phase of the cleanup, which was a drum removal
action. The Company's liability for the first phase is currently
estimated at $119,000.
As previously disclosed, the Appellate Division of New Jersey
Superior Court dismissed the appeal of a single shareholder seeking
to challenge as inadequate the 1991 settlements of all shareholder
litigation arising out of the withdrawal of certain angioplasty
catheters from the United States market. On June 7, 1994, the New
Jersey Supreme Court denied that shareholder's petition to appeal
the dismissal.
Item 6. Exhibits and Reports on Form 8-K
(b) Registrant filed a Current Report on Form 8-K dated
May 9, 1994 with respect to updating the status of FDA
product submission audits.
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C. R. BARD, INC. AND SUBSIDIARIES
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/
Controller and
Chief Accounting Officer
August 12, 1994
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