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, 1996
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, 1996
Common Stock - $.25 par value 57,110,130
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C. R. BARD, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 1
Condensed Statements of Consolidated Income
and Retained Earnings For The Three Months
Ended March 31, 1996 and 1995 2
Condensed Consolidated Statements of Cash
Flows For The Three Months Ended
March 31, 1996 and 1995 3
Notes to Consolidated Financial Statements 4
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 5
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,
1996 1995
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments $ 45,800 $ 51,300
Accounts receivable, net 226,400 215,700
Inventories 241,000 228,200
Other current assets 7,800 8,700
Total current assets 521,000 503,900
Property, plant and equipment, net 213,100 214,200
Intangible assets, net of amortization 314,000 315,500
Other assets 72,500 57,400
$1,120,600 $1,091,000
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C>
Current Liabilities:
Short-term borrowings and current
maturities of long-term debt $ 102,600 $ 66,900
Accounts payable 42,000 62,700
Accrued expenses 147,900 131,400
Federal and foreign income taxes 6,900 12,300
Total current liabilities 299,400 273,300
Long-term debt 198,200 198,400
Other long-term liabilities 45,800 54,700
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 57,214,134
shares and 57,100,598 shares 14,300 14,300
Capital in excess of par value 70,200 63,300
Retained earnings 487,300 478,900
Other 5,400 8,100
577,200 564,600
$1,120,600 $1,091,000
<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 The Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Net sales $289,200 $278,100
Costs and expenses:
Cost of goods sold 140,600 134,200
Marketing, selling and administrative 86,400 85,000
Research and development expense 19,300 19,200
Interest expense 6,000 6,000
Other(income)expense, net 26,300 (1,700)
Total costs and expenses 278,600 242,700
Income before taxes 10,600 35,400
Provision (benefit) for income taxes (16,500) 10,500
Net income 27,100 24,900
Retained earnings, beginning of period 478,900 427,300
Treasury stock retired (9,600) (1,600)
Cash dividends (9,100) (7,800)
Retained earnings, end of period $487,300 $442,800
Weighted average shares outstanding 56,903 56,458
Net income per share $ .48 $ .44
Cash dividends per share $ .16 $ .15
<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)
(Unaudited)
<CAPTION>
For The Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 27,100 $ 24,900
Noncash items and other (5,700) (12,600)
21,400 12,300
Cash flows from investing activities:
Capital expenditures (8,100) (4,900)
Other long-term investments, net (37,700) (1,200)
(45,800) (6,100)
Cash flows from financing activities:
Purchase of common stock (9,700) (1,600)
Dividends paid (9,100) (7,800)
Other financing activities 42,500 6,800
23,700 (2,600)
Cash and cash equivalents:
Increase (decrease) during the period (700) 3,600
Balance at January 1, 37,400 34,500
Balance at March 31, $ 36,700 $ 38,100
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
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C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED 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 1995 Annual
Report on Form 10-K.
The Company applies APB Opinion No. 25 "Accounting for Stock Issued
to Employees", and related interpretations in accounting for its
stock plans. Accordingly, no compensation expense has been
recognized for the stock-based compensation plans other than for
restricted stock and performance-based awards.
In March 1996 the Company received additional royalty payments
under a license pertaining to the Company's angioplasty catheter
balloon technology based upon a favorable judgment regarding the
appropriate royalty rate. As a result "other income" includes
approximately $9,900,000 in payments received on sales of these
products for prior periods.
Based upon a recently completed worldwide tax review, the Company
has determined that approximately $15,000,000 in tax reserves are
no longer required and have been reversed against the tax provision
for the quarter ended March 31, 1996.
The Company has reorganized its global cardiology business and
plans to introduce an entirely new line of guidewire products
during 1996. As a result, the Company has reviewed the assets
associated with its cardiology business and has recorded a
$31,000,000 ($16,800,000 net of tax) write down of assets related
to its guidewire technology in accordance with the requirements of
SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of". In addition, the
Company has recorded miscellaneous charges amounting to $6,000,000
primarily related to legal settlements.
Excluding the effect of these unusual items, pretax income for the
quarter ended March 31, 1996 would have been $37,700,000 with a
related tax provision of $11,100,000 resulting in a net income of
$26,600,000 or 47 cents per share.
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C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)
Included in the balance sheet caption "Cash and short-term
investments" are short-term investments which have maturities
greater than ninety days and amounted to $9,100,000 at March 31,
1996. These investments have not been treated as cash and cash
equivalents for cash flow presentation purposes.
During the first quarter of 1996, the Company spent $31,000,000 for
the acquisition of St. Jude Medical's Cardiac Assist division, a
manufacturer of intra-aortic balloon catheters, and a majority
interest in X-Trode S.r.l., an Italian coronary stent manufacturer.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Consolidated net sales for the first quarter of 1996 of
$289,200,000 was an increase of 4 percent over the first quarter
1995 sales of $278,100,000. Strong sales of angioplasty balloons
in international regions as well as increases in angiography and
radiology products contributed to the 6 percent increase in
cardiovascular products. Strong Foley catheter sales during the
quarter contributed to the 7 percent increase in urological
products. Surgical sales were flat mainly as a result of
competitive pricing pressures.
PRODUCT GROUP SUMMARY OF NET SALES
(in thousands)
For the Three Months Ended March 31,
Percent
1996 1995 Change
Cardiovascular $ 96,500 $ 90,900 6
Urological 84,200 78,800 7
Surgical 108,500 108,400 -
Net sales $289,200 $278,100 4
U.S. sales were $193,700,000 for the first quarter of 1996, an
increase of 2 percent against the first quarter of 1995. Pricing
pressures in the United States have decreased prices by 3 percent.
International sales were $95,500,000 for the first quarter of 1996
representing an 8 percent increase. Currency translation
contributed 1 percent of the increase to international sales for
the quarter.
The gross profit margin declined slightly from 51.7 percent to 51.4
percent for the three months ended March 31, 1995 and 1996,
respectively, mainly as a result of pricing pressures.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
In March 1996 the Company received additional royalty payments
pertaining to it's angioplasty catheter balloon technology. As a
result "other income" includes approximately $9,900,000 in payments
received on sales of these products for prior periods. Also
included in the quarter are the reversal of tax reserves of
$15,000,000, the writedown of assets of $31,000,000 ($16,800,000
net of tax) related to guidewire technology as well as several
other miscellaneous charges. Excluding the effect of these
unusual items, pretax income for the quarter ended March 31, 1996
would have been $37,700,000 with a related tax provision of
$11,100,000 resulting in a net income of $26,600,000 or 47 cents
per share.
Net income of $27,100,000 and earnings per share of 48 cents for
the quarter ended March 31, 1996 were increases of 9 percent
compared with the first quarter of 1995.
During the first three months of 1996 and 1995, the Company
acquired 274,500 and 59,500, respectively, of its common shares
which were retired.
During the first quarter of 1996, the Company spent $31,000,000 on
the acquisition of new businesses as discussed in the footnotes.
Short-term borrowings were used to finance these transactions.
Other shareholders' investment consisted of translation adjustment
of $9,200,000 offset by $3,800,000 of unearned restricted stock at
March 31, 1996 and translation adjustment of $12,400,000 offset by
$4,300,000 of unearned restricted stock at December 31, 1995.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The registrant held its Annual Meeting of Shareholders on
April 17, 1996.
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<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
Item 4. Submission of Matters to a Vote of Security Holders.
(continued)
(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 III directors elected for a
term of three years to serve until the 1999 Annual Meeting
were as follow: T. Kevin Dunnigan, For - 49,051,884
Authority Withheld - 1,101,322; Regina E. Herzlinger, For -
49,044,946 Authority Withheld - 1,108,260; and William H.
Longfield, For - 49,035,761 Authority Withheld - 1,117,445;
and the additional Class I director elected for a term of
one year was as follow: William C. Bopp, For - 49,056,459
Authority Withheld - 1,096,747.
(c) Briefly described below is each other matter voted upon at
the Annual Meeting and the number of affirmative votes,
negative votes and abstentions and broker nonvotes with
respect to each matter.
(i) Approval of the amendment to the Company's Restated
Certificate of Incorporation which will reduce the
maximum number of directors of the Company
For 49,773,228
Against 202,479
Abstain and Broker Nonvotes 177,499
(ii) Approval of an amendment to the Company's 1993 Long
Term Incentive Plan to increase the number of
shares of Common Stock available for grant
thereunder and amend other provisions.
For 41,404,192
Against 8,352,279
Abstain and Broker Nonvotes 396,735
(iii) Ratification of the appointment of Arthur Andersen
LLP as independent public accountants for the year
1996.
For 49,916,159
Against 105,732
Abstain and Broker Nonvotes 131,315
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<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
Item 4. Submission of Matters to a Vote of Security Holders.
(continued)
(iv) Shareholder proposal relating to annual election of
directors.
For 20,327,648
Against 24,880,414
Abstain and Broker Nonvotes 463,140
(v) Shareholder proposal relating to compensation of
non-employee directors.
For 9,394,062
Against 35,823,287
Abstain and Broker Nonvotes 453,853
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 March 31, 1996.
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
and Chief Accounting Officer
DATE: May 1, 1996
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 45,800
<SECURITIES> 0
<RECEIVABLES> 226,400
<ALLOWANCES> 9,600
<INVENTORY> 241,000
<CURRENT-ASSETS> 521,000
<PP&E> 343,200
<DEPRECIATION> 130,100
<TOTAL-ASSETS> 1,120,600
<CURRENT-LIABILITIES> 299,400
<BONDS> 198,200
0
0
<COMMON> 14,300
<OTHER-SE> 553,700
<TOTAL-LIABILITY-AND-EQUITY> 1,120,600
<SALES> 289,200
<TOTAL-REVENUES> 289,200
<CGS> 140,600
<TOTAL-COSTS> 140,600
<OTHER-EXPENSES> 105,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,000
<INCOME-PRETAX> 10,600
<INCOME-TAX> (16,500)
<INCOME-CONTINUING> 27,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,100
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
