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, 1995
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 31, 1995
Common Stock - $.25 par value 56,898,875
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C. R. BARD, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994 1
Statements of Consolidated Income and Retained
Earnings For The Quarter and Nine Months Ended
September 30, 1995 and 1994 2
Condensed Consolidated Statements of Cash Flows
For The Nine Months Ended September 30, 1995
and 1994 3
Notes to Consolidated Financial Statements 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II - OTHER INFORMATION 8
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<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments $ 35,800 $ 34,300
Accounts receivable, net 201,700 191,300
Inventories 228,100 209,300
Other current assets 14,500 9,100
Total current assets 480,100 444,000
Long-term investments 11,700 13,300
Property, plant and equipment 349,800 324,800
Less: accumulated depreciation 136,800 115,700
213,000 209,100
Intangible assets, net of
amortization 327,300 316,900
Other assets 52,200 52,300
$1,084,300 $1,035,600
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C>
Current Liabilities:
Short-term borrowings and current
maturities of long-term debt $ 101,200 $ 198,900
Accounts payable 33,600 41,800
Accrued expenses 147,800 125,600
Federal and foreign income
taxes 5,500 8,000
Total current liabilities 288,100 374,300
Long-term debt 198,300 93,400
Other long-term liabilities 54,100 76,300
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 55,499,634
shares and 55,239,869 shares 13,900 13,800
Capital in excess of par value 56,500 48,800
Retained earnings 463,600 426,000
Other 9,800 3,000
543,800 491,600
$1,084,300 $1,035,600
<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
STATEMENTS OF CONSOLIDATED INCOME AND RETAINED EARNINGS
(thousands except per share amounts)
<CAPTION>
For The Qtr. Ended For Nine Mos. Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $273,500 $259,200 $834,000 $777,700
Costs and expenses:
Cost of goods sold 132,900 125,300 405,000 376,100
Marketing, selling &
administrative 85,300 79,100 254,900 232,900
Research and
development 18,000 17,100 56,700 54,000
Costs to combine
operations 12,500 --- 12,500 ---
248,700 221,500 729,100 663,000
Operating income 24,800 37,700 104,900 114,700
Interest expense 6,200 4,100 18,600 10,400
Other income(expense),
net 2,700 (600) 5,800 (2,800)
Income before taxes 21,300 33,000 92,100 101,500
Provision for income
taxes 7,200 9,900 28,500 31,100
Net Income 14,100 23,100 63,600 70,400
Retained earnings,
beginning of period 457,800 414,000 426,000 389,000
Treasury stock
retired --- (1,200) (2,000) (8,900)
Cash dividends (8,300) (7,700) (24,000) (22,300)
Retained earnings,
end of period $463,600 $428,200 $463,600 $428,200
Weighted average shares
outstanding 55,283 55,110
Net income per share $ .25 $ .42 $ 1.15 $ 1.28
Cash dividends per
share $ .16 $ .15 $ .46 $ .43
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these statements
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<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
<CAPTION>
For The Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 63,600 $ 70,400
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 35,600 30,100
Other noncash items (1,400) 700
Changes in assets and liabilities:
Current assets (34,600) (43,500)
Current liabilities 11,500 (22,300)
Other long-term liabilities (22,200) (18,500)
52,500 16,900
Cash flows from investing activities:
Capital expenditures (22,900) (30,000)
Other long-term investments, net (17,100) (6,300)
(40,000) (36,300)
Cash flows from financing activities:
Purchase of common stock (2,000) (9,000)
Dividends paid (24,000) (22,300)
Short-term borrowings and other (89,900) 83,400
Long-term borrowings 104,900 1,500
(11,000) 53,600
Increase in cash and short-term
investments 1,500 34,200
Cash and short-term investments-
beginning of year 34,300 75,800
Cash and short-term investments-
end of period $ 35,800 $110,000
<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 financial statements contained in this filing have been
prepared in accordance with the rules and regulations of the
Securities and Exchange Commission and have not been audited,
however, 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 1994 Annual Report on Form 10-K and the Company's 1995 first
and second quarters filed on Form 10-Q.
Acquisitions
On September 28, 1995 the Company completed the stock-for-stock
merger with MedChem Products, Inc. where MedChem has become a
wholly-owned subsidiary of Bard. The merger has been accounted for
as a pooling of interests. All financial information contained in
this filing reflects the merger with MedChem and accordingly prior
periods have been restated. Under the terms of the merger
agreement Bard issued 3,192,345 common shares to MedChem
shareholders. The unaudited results of operations of MedChem before
the combination with Bard were: net sales of $7,300,000 and net
income of $300,000 for the quarter ended September 30, 1994; and
net sales of $22,100,000 and net income of $1,500,000 for the nine
months ended September 30, 1994; net sales of $9,100,000 and net
income of $500,000 for the quarter ended September 30, 1995; and
net sales of $28,300,000 and net income of $1,800,000 for the nine
months ended September 30, 1995. These MedChem 1995 results do not
include one-time charges related to the merger amounting to
$9,900,000 or $.18 per share after-tax reflected in the third
quarter ended September 30, 1995.
On October 20, 1995 the Company acquired American Hydro-Surgical
Instruments, Inc. in a stock-for-stock merger which will be
accounted for as a pooling of interests. Bard issued 1,338,446
common shares to American Hydro-Surgical Instruments shareholders.
American Hydro-Surgical Instruments was a privately held company
which develops, manufactures and markets a line of high-quality
irrigation instruments used by surgeons during laparoscopic
procedures.
Combining MedChem Products, Inc. and American Hydro-Surgical
Instruments, Inc. with Bard the results of operations are: net
sales $941,500,000, net income $68,300,000 and earnings per share
$1.21 for the ten months ended October 31, 1995 and net sales
$873,900,000, net income $76,400,000 and earnings per share $1.35
for the ten months ended October 31, 1994. The net income for the
ten month period ended October 31, 1995 includes an after-tax
charge of $13,500,000 or $.24 per share for one-time charges
related to the acquisition of these companies.
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C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Acquisitions (continued)
In October 1994, the Company acquired Angiomed AG, a German medical
device manufacturer which was accounted for as a purchase. The
funds used for this acquisition were included in cash and short-
term investments and were financed by a combination of European
cash deposits and some additional short-term borrowings which were
obtained prior to September 30, 1994 and were reflected in the
balance sheet as of that date. During the first 10 months of 1994,
including the Angiomed acquisition, the Company invested over
$83,000,000 in acquiring new businesses or product lines.
Short-Term Borrowings and Long-Term Debt
In June 1995, the Company completed the arrangement of a
$350,000,000 five-year syndicated credit facility. This loan
commitment by a group of 15 banks will allow Bard to borrow at
interest rates slightly over LIBOR while securing a well-balanced
debt structure. As a result of this loan facility, the Company has
classified $120,000,000 as long-term debt at September 30, 1995.
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<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 $273,500,000
increased 6% against the third quarter 1994 level of $259,200,000.
Sales for the nine months of 1995 of $834,000,000 increased 7%
against the same period last year. Sales in the U.S. for the third
quarter were $178,100,000, a 3% decrease from 1994. Sales outside
the U.S. increased 25% in the quarter to $95,400,000. The currency
translation effect increased international sales in this quarter by
8%. For the nine months ended September 30, 1995, sales in the
U.S. were $547,600,000, while international sales totaled
$286,400,000.
PRODUCT GROUP SUMMARY OF NET SALES
(in thousands)
Quarter Ended Nine Months Ended
September 30, September 30,
% %
1995 1994 Change 1995 1994 Change
Cardiovascular $ 89,700 $ 90,500 (1) $278,700 $280,400 (1)
Urological 79,800 72,300 10 238,100 214,900 11
Surgical 104,000 96,400 8 317,200 282,400 12
Net sales $273,500 $259,200 6 $834,000 $777,700 7
In the third quarter of 1995 the urological and surgical products
groups continued to lead the Company's revenue growth.
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. The
Company continues to develop and launch new balloon angioplasty
products in international markets.
Marketing, selling and administrative expenses in 1995 have
increased faster than sales mainly as a result of the additional
selling expenses and amortization of goodwill resulting from the
acquisitions made in late 1994. The third quarter of 1995 includes
a pretax charge of $12,500,000 related to one-time costs associated
with the acquisition of MedChem in a transaction accounted for as
a pooling of interests.
Interest expense for the third quarter and nine month period of
1995 have increased due to increase in borrowings used for
acquisitions.
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<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Other income(expense), net, amounted to income of $5,800,000 for
the nine months ended September 30, 1995 as compared with an
expense of $2,800,000 for the same period in 1994. The 1995 other
income is mainly a result of favorable foreign exchange
transactions.
The Company results for the quarter ended September 30, 1995 was
net income of $14,100,000 or $.25 per share compared with
$23,100,000 or $.42 per share for the same quarter in 1994. Third
quarter 1995 net income includes a one-time after-tax charge of
$9,900,000 or $.18 per share for costs associated with the
acquisition of MedChem. In addition, the dilution effect of the
merger reduced third quarter results by another $.02 per share.
Cash and short-term investments increased during the nine month
period ended September 30, 1994 to accumulate sufficient funds to
acquire Angiomed in October 1994 (see Acquisition footnote for
further discussion).
Since June 1995, when the Company entered into a new credit
facility, it reduced its short-term borrowings and increased its
long-term debt. The Company believes it could borrow adequate
funds at competitive terms and rates should the need arise.
Short-term borrowings increased during the first nine months of
1994 by approximately $79,400,000. These borrowings which included
foreign currency borrowings were used for general working capital
and in anticipation of acquiring Angiomed in October 1994.
Other long-term liabilities decreased by $22,200,000 during the
nine month period ended September 30, 1995. This reduction was
mainly a result of the Company reclassifying $15,300,000 from long-
term liabilities to accrued expenses for its obligations under the
Department of Justice settlement agreement.
Other shareholders' investment has increased by $6,800,000 in the
first nine months of 1995 primarily as a result of foreign currency
translation adjustments.
During the first nine months of 1995 and 1994, the Company acquired
and retired 75,000 and 350,000 shares respectively, of its common
stock.
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C. R. BARD, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On October 18, 1995 the Board of Patent Appeals and Interferences
of the United States Patent and Trademark Office issued a final
decision in an inventorship contest between C. R. Bard, Inc.
and W. L. Gore & Associates, Inc. awarding patent rights in
expanded polytetrafluorethylene (PTFE) vascular prostheses to Bard.
The patent rights awarded to Bard are sufficiently broad to cover
virtually all expanded PTFE vascular prostheses successfully used
to date. Once this patent is issued, Bard will be the only company
permitted to manufacture and sell expanded PTFE vascular prostheses
in the United States. A court appeal of the final decision is
possible, but the Company believes that the final decision of the
Board would be affirmed in any appeal.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Registrant filed a Current Report on Form 8-K dated July 6,
1995 announcing that the Food and Drug Administration had
lifted the Application Integrity Policy imposed on Bard's USCI
division in January 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
Executive Vice President and
Chief Financial Officer
Charles P. Grom /s/
Charles P. Grom
Vice President and Controller
DATE: November 13, 1995
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 35,800
<SECURITIES> 0
<RECEIVABLES> 201,700
<ALLOWANCES> 0
<INVENTORY> 228,100
<CURRENT-ASSETS> 480,100
<PP&E> 349,800
<DEPRECIATION> 136,800
<TOTAL-ASSETS> 1,084,300
<CURRENT-LIABILITIES> 288,100
<BONDS> 198,300
<COMMON> 13,900
0
0
<OTHER-SE> 529,900
<TOTAL-LIABILITY-AND-EQUITY> 1,084,300
<SALES> 834,000
<TOTAL-REVENUES> 834,000
<CGS> 405,000
<TOTAL-COSTS> 324,100
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,600
<INCOME-PRETAX> 92,100
<INCOME-TAX> 28,500
<INCOME-CONTINUING> 63,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,600
<EPS-PRIMARY> 1.15
<EPS-DILUTED> 1.15
</TABLE>
