SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 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 April 29, 1994
Common Stock - $.25 par value 51,869,670
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C. R. BARD, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets -
March 31, 1994 and December 31, 1993 1
Condensed Statements of Consolidated Income and
Retained Earnings For The Three Months Ended
March 31, 1994 and 1993 2
Condensed Consolidated Statements of Cash Flows
For The Three Months Ended March 31, 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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<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
<CAPTION>
March 31, December 31,
1994 1993
<S> <C> <C>
ASSETS (Unaudited)
Current Assets:
Cash and short-term investments $ 86,800 $ 75,000
Accounts receivable, net 169,300 167,300
Inventories 179,000 173,500
Other current assets 5,700 5,700
Total current assets 440,800 421,500
Long-term investments 17,800 17,700
Property, plant and equipment, net 171,400 168,900
Intangible assets, net of amortization 147,000 149,100
Other assets 43,200 41,400
$820,200 $798,600
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C>
Current Liabilities:
Short-term borrowings and current
maturities of long-term debt $103,300 $ 84,500
Accounts payable 37,100 39,300
Accrued expenses 119,300 124,500
Federal and foreign income taxes 14,700 16,000
Total current liabilities 274,400 264,300
Long-term debt 68,500 68,500
Other long-term liabilities 80,300 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 51,979,445
shares and 52,098,124 shares 13,000 13,000
Capital in excess of par value 16,500 15,200
Retained earnings 377,900 367,400
Other (10,400) (12,500)
397,000 383,100
$820,200 $798,600
<FN>
The accompanying notes to consolidated financial statements are an
integral part of these balance sheets.
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</TABLE>
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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 The Three Months Ended
March 31,
1994 1993
<S> <C> <C>
Net sales $247,400 $236,400
Costs and expenses:
Cost of goods sold 121,300 116,500
Marketing, selling and administrative 71,800 72,900
Research and development expense 17,700 17,100
210,800 206,500
Operating income 36,600 29,900
Interest expense 2,600 2,700
Other income(expense), net (1,000) 12,300
Income before taxes and effect
of accounting change 33,000 39,500
Provision for income taxes 10,200 12,600
Income before effect
of accounting change 22,800 26,900
Effect of change in accounting principle,
net of taxes --- (6,100)
Net income 22,800 20,800
Retained earnings, beginning of period 367,400 363,800
Treasury stock retired (5,000) (14,000)
Cash dividends (7,300) (6,900)
Retained earnings, end of period $377,900 $363,700
Weighted average shares outstanding 52,027 52,826
Income per share before effect
of accounting change $ .44 $ .51
Net income per share $ .44 $ .39
Cash dividends per share $ .14 $ .13
<FN>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
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</TABLE>
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<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
(Unaudited)
<CAPTION>
For The Three Months Ended
March 31,
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 22,800 $ 20,800
Noncash items and other (8,500) 10,600
14,300 31,400
Cash flows from investing activities:
Capital expenditures (9,300) (5,000)
Other long-term investments, net (900) (14,900)
(10,200) (19,900)
Cash flows from financing activities:
Purchase of common stock (5,100) (14,100)
Dividends paid (7,300) (6,900)
Other financing activities 20,100 300
7,700 (20,700)
Increase(decrease) in cash and short-
term investments $ 11,800 $ (9,200)
<FN>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
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</TABLE>
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C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED 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 first quarter of 1994 of
$247,400,000 was an increase of 5 percent over the first quarter
1993 sales of $236,400,000. U.S. sales were $179,400,000 and
international sales were $68,000,000 for the first quarter of 1994.
These were increases of 5 and 3 percent respectively, over first
quarter 1993 results. The currency translation effect reduced
international sales by 2 percent and the sale last year of
MedSystems division reduced U.S. sales by 3 percent.
PRODUCT GROUP SUMMARY OF NET SALES
(in thousands)
For the Three Months Ended March 31,
Percent
1994 1993 Change
Cardiovascular $ 92,400 $ 93,500 (1)
Urological 71,000 60,200 18
Surgical 84,000 82,700 2
Net sales $247,400 $236,400 5
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C. R. BARD, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (cont'd)
The gross profit margins have increased slightly, from 50.7% to
51.0% for the three months ended March 31, 1993 and 1994,
respectively. This is a result of cost controls put in place,
manufacturing improvements and product mix improvements.
Other income (expense), net, totaled $1,000,000 expense for the
three months ended March 31, 1994 compared with income of
$12,300,000 for the same period in 1993. 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.
Net income of $22,800,000 and earnings per share of 44 cents for
the quarter ended March 31, 1994 were increases of 10% and 13%,
respectively, compared with the first quarter of 1993.
During the first quarter of 1993 the Company invested over
$19,000,000 acquiring the assets of several companies or product
lines. The largest of these acquisitions were the assets of Solco
Hospital Products Group, Inc., whose principal products are
autotransfusion devices. This acquisition strengthened the
Company's overall presence in the blood salvaging products
business.
During the first three months of 1994 and 1993, the Company
acquired 186,400 and 541,700, 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 will pay a
fine and civil damages totaling $61 million which had been charged
against the 1993 third quarter's earnings. By May 5, 1994 the
Company will pay $30.5 million to the government in accordance with
this agreement. This amount has been reflected as a short-term
obligation in accrued expenses and the balance of the settlement
has been reflected in other long-term liabilities.
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<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (cont'd)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On April 5, 1994 the U.S. District Court in Boston approved the
Plea Agreement signed by the Company with the Department of Justice
on October 14, 1993 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.
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The registrant held its Annual Meeting of Shareholders on
April 20, 1994.
(b) Proxies for the meeting were solicited pursuant to
Regulation 14; there was no solicitation in opposition to
management's nominees for directors as listed in the Proxy
Statement and all such nominees were elected. The results
of voting for the three Class I directors elected for a
term of three years to serve until the 1997 Annual Meeting
were as follow: William T. Butler, M.D., For - 45,002,368
Authority Withheld - 361,800; Raymond B. Carey, Jr., For -
44,995,377 Authority Withheld - 368,791; and Daniel A.
Cronin, Jr., For - 44,993,621 Authority Withheld - 370,547.
(c) Briefly described below is each other matter voted upon at
the Annual Meeting and the number of affirmative votes and
negative votes with respect to each matter.
(i) Approval of the 1994 Executive Bonus Plan.
For 38,353,885
Against 6,439,079
Abstain 571,204
(ii) Ratification of the appointment of Arthur
Andersen & Co. as independent public accountants
for the year 1994.
For 45,061,026
Against 172,590
Abstain 130,552
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<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (cont'd)
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10 - Material Contracts
1994 Executive Bonus Plan of C. R. Bard, Inc.
(b) Registrant filed a Current Report on Form 8-K dated
January 19, 1994 with respect to the Food and Drug
Administration applying the provisions of the Applications
Integrity Policy to the Company's USCI division.
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 and
Chief Accounting Officer
DATE: May 4, 1994
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EXHIBIT 10
C. R. BARD, INC.
1994 Executive Bonus Plan
This is the C. R. Bard, Inc. 1994 Executive Bonus Plan (the
"Plan"), as authorized by the Board of Directors (the "Board") of
C. R. Bard, Inc. (the "Company"), for the payment of incentive
compensation to designated employees.
1. Definitions
As used in the Plan, the following terms have the following
meanings:
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the Compensation and Stock Option
Committee of the Board.
"Earnings Per Share" shall mean net income per share as
reported in the audited annual consolidated financial statements of
the Company and its subsidiaries, as adjusted for any items of an
unusual and/or nonrecurring nature which are specified in writing
by the Committee prior to the beginning of the plan year and are
confirmed as such by the Company's independent auditors.
"Group Financial Goal" as to any person shall mean the sum of
the amounts reported as net income on the respective financial
statements of the divisions or operating units which report to such
person, as adjusted for any items of an unusual and/or nonrecurring
nature which are specified in writing by the Committee prior to the
beginning of the plan year and are confirmed as such by the
Company's independent auditors.
"Outside Directors" shall have the meaning ascribed to it in
Section 162(m) of the Code and the regulations proposed or adopted
thereunder.
2. Objectives
The objectives of the Plan are to:
* Help attract, retain and motivate the executives required
to manage the Company; and
* Promote the achievement of rigorous but realistic
financial goals and encourage intensive fact-based
business planning.
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3. Administration
The Plan will be administered by the Committee. The Committee
shall contain at least two Outside Directors. Subject to the
provisions of the Plan, the Committee will have full authority to
interpret the Plan, to establish and amend rules and regulations
relating to it, to determine the terms and provisions for making
awards and to make all other determinations necessary or advisable
for the administration of the Plan.
4. Participation
Participation in the Plan in any fiscal year will be limited
to individuals who on the first day of the Company's fiscal year
occupy the office of Chairman, Chief Executive Officer, President,
Vice Chairman, Chief Operating Officer, Executive Vice President,
Chief Financial Officer or Group Vice President.
5. Performance Goals
Bonuses hereunder for all participants except Group Vice
Presidents will be determined by reference to Earnings Per Share
for each fiscal year, and bonuses hereunder for Group Vice
Presidents will be determined 50 percent by reference to each of
(i) Earnings Per Share for each fiscal year and (ii) the Group
Financial Goal for each fiscal year. Before the commencement of
each fiscal year, the Committee shall establish the Earnings Per
Share and Group Financial Goal targets and the amount of bonus
(expressed as a percentage of base salary in effect on the first
day of the fiscal year) payable to each participant to the extent
that Earnings Per Share and, as applicable, the Group Financial
Goal equal, or fall within a range above or below the applicable
target; provided however that with respect to the 1994 fiscal year,
the Committee shall set such targets and percentages no later than
April 1, 1994. In the event of any change in the outstanding shares
of Common Stock by reason of any stock dividend or split,
recapitalization, or other similar corporate change, the Earnings
Per Share target shall be appropriately adjusted by the Committee.
6. Maximum
No bonus payable to an individual under this Plan for a given
fiscal year shall exceed $1,400,000.
7. Time and Form of Payment
(a) Payment. Except as provided in paragraph (b), of
this Section 7, awards will be paid in cash as soon as practicable
following the public announcement by the Company of its financial
results for the fiscal year and written certification from the
Committee that the goals described in Section 5 hereof have been
attained
A-2
(b) Deferral. A participant in the Plan may, prior to
the commencement of a fiscal year, elect to defer payment of all or
any portion of a bonus award. Amounts so deferred will be credited
by the Company to an account for the participant and will be
credited with interest on a quarterly basis at (i) the average
interest rate received by the Company on its United States
short-term investments for the fiscal quarter for which interest is
credited or (ii) if no such short-term investments were held, the
prime rate in effect on the last business day of the fiscal quarter
announced by J. P. Morgan or, if no such rate is published, the
prime rate published in The Wall Street Journal on such date.
Amounts deferred pursuant to this paragraph 7(b) shall be paid in
a lump sum upon termination of employment by reason of retirement,
death, disability or otherwise or in installments as requested by
the participant and agreed to by the Committee.
8. Death or Disability
A participant in the Plan (or a participant's beneficiary)
whose employment terminates during a fiscal year due to death or
disability shall receive, after the end of the fiscal year, an
amount equal to the bonus which would have been payable to such
participant, pro-rated for that portion of the fiscal year during
which the participant was employed.
9. Miscellaneous
(a) Amendment and Termination of the Plan. The Committee with
the approval of the Board may amend, modify or terminate this Plan
at any time and from time to time. Notwithstanding the foregoing,
no such amendment, modification or termination shall affect payment
of a bonus for a fiscal year already ended.
(b) No Assignment. Except as otherwise required by applicable
law, no interest, benefit, payment, claim or right of any
participant under the Plan shall be subject in any manner to any
claims of any creditor of any participant or beneficiary, nor to
alienation by anticipation, sale, transfer, assignment, bankruptcy,
pledge, attachment, charge or encumbrance of any kind, and any
attempt to take any such action shall be null and void.
(c) No Rights to Employment. Nothing contained in the Plan
shall give any person the right to be retained in the employment of
the Company or any of its affiliates or associated corporations or
affect the right of any such employer to dismiss any employee.
(d) Beneficiary Designation. The Committee shall establish
such procedures as it deems necessary for a participant to
designate a beneficiary to whom any amounts would be payable in the
event of the participant's death.
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(e) Communications.
(i) All notices and communications to the Committee in
connection with the Plan shall be in writing, shall be delivered by
first class mail, by courier or by hand, shall be addressed to the
Committee and shall be deemed to have been given and delivered only
upon actual receipt thereof by the Committee. All notices and
communications from the Committee to participants or beneficiaries
which the Committee deems necessary in connection with the Plan
shall be in writing and shall be delivered to the participant or
beneficiary or other person at the person's address last appearing
on the records of the Company.
(ii) Each participant shall file with the Committee such
pertinent information concerning the participant or the
participant's beneficiary as is required by the Committee.
(f) Plan Unfunded. The entire cost of this Plan shall be paid
from the general assets of the Company. The rights of any person to
receive benefits under the Plan shall be only those of a general
unsecured creditor, and neither the Company, the Board nor the
Committee shall be responsible for the adequacy of the general
assets of the Company to meet and discharge Plan liabilities nor
shall the Company be required to reserve or otherwise set aside
funds for the payment of its obligations hereunder.
(g) Applicable Law. The Plan and all rights thereunder shall
be governed by and construed in accordance with the laws of the
State of New Jersey.
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