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, 1997
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 21, 1997
Common Stock - $.25 par value 57,413,194
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets -
June 30, 1997 and December 31, 1996 1
Condensed Statements of Consolidated Income
and Retained Earnings For The Quarter and
Six Months Ended June 30, 1997 and 1996 2
Condensed Consolidated Statements of Cash Flows
For The Six Months Ended June 30, 1997 and 1996 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>
June 30, December 31,
1997 1996
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments $ 75,700 $ 78,000
Accounts receivable, net 247,800 245,400
Inventories 249,600 245,000
Other current assets 11,900 8,500
Total current assets 585,000 576,900
Property, plant and equipment, net 223,200 226,100
Intangible assets, net of amortization 431,200 447,200
Other assets 88,000 82,300
$1,327,400 $1,332,500
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C>
Current Liabilities:
Short-term borrowings and current
maturities of long-term debt $ 144,900 $ 148,200
Accounts payable 51,300 59,200
Accrued expenses 115,000 121,500
Federal and foreign income taxes 14,800 7,300
Total current liabilities 326,000 336,200
Long-term debt 341,300 342,800
Other long-term liabilities 52,900 52,000
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 57,123,661
shares and 56,985,983 shares 14,300 14,300
Capital in excess of par value 86,400 77,500
Retained earnings 530,900 506,700
Other (24,400) 3,000
607,200 601,500
$1,327,400 $1,332,500
<FN>
</TABLE>
The accompanying notes to condensed consolidated financial
statements are an integral part of these balance sheets.
-1-
<PAGE>
<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,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $304,000 $295,200 $604,700 $584,400
Costs and expenses:
Cost of goods sold 143,700 143,300 286,900 283,900
Marketing, selling
and administrative 96,600 90,000 190,700 176,400
Research & development 21,500 19,800 42,600 39,100
Interest expense 8,500 6,100 16,700 12,100
Other(income)expense,
net (4,000) (3,000) (7,800) 23,300
Total costs and
expenses 266,300 256,200 529,100 534,800
Income before taxes 37,700 39,000 75,600 49,600
Provision(benefit)
for income taxes 11,500 11,500 23,300 (5,000)
Net income 26,200 27,500 52,300 54,600
Retained earnings,
beginning of period 522,400 487,300 506,700 478,900
Treasury stock
retired (8,000) (10,800) (8,700) (20,300)
Cash dividends (9,700) (9,100) (19,400) (18,300)
Retained earnings, end
of period $530,900 $494,900 $530,900 $494,900
Weighted average shares
outstanding 57,021 57,009
Net income per share $ .46 $ .48 $ .92 $ .96
Cash dividends per
share $ .17 $ .16 $ .34 $ .32
<FN>
</TABLE>
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
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<PAGE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
(Unaudited)
<CAPTION>
For The Six Months Ended
June 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 52,300 $ 54,600
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 30,200 31,100
Other non-cash items 200 1,000
Changes in assets and liabilities:
Current assets (11,700) (27,900)
Current liabilities (6,900) (37,500)
Other 900 1,900
65,000 23,200
Cash flows from investing activities:
Capital expenditures (18,200) (17,900)
Other long-term investments, net (26,400) (44,000)
(44,600) (61,900)
Cash flows from financing activities:
Purchase of common stock (8,700) (20,500)
Dividends paid (19,400) (18,300)
Short-term borrowings and other 5,600 101,300
Long-term borrowings (1,500) (3,600)
(24,000) 58,900
Net increase in cash and cash
equivalents (3,600) 20,200
Cash and cash equivalents
at January 1, 63,600 37,400
Cash and cash equivalents
at June 30, $ 60,000 $ 57,600
<FN>
</TABLE>
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
-3-
<PAGE>
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, C. R. Bard, Inc. ("Bard" or 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 1996 Annual Report on Form 10-K.
Accounting Policies
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 $15,700,000 at June 30,
1997. These investments have not been treated as cash and cash
equivalents for cash flow presentation purposes.
The Company enters into foreign exchange options to help reduce the
exposure to fluctuations between certain currencies. These off
balance sheet options are accounted for on a mark-to-market basis.
The gains and losses associated with these options are recorded on
the income statement as "other income and expense" and on the
balance sheet as "other current assets" or "accrued expenses".
Cash flows associated with the settlement of these options are
reflected as operating activities.
Effective for fiscal years ending after December 15, 1997, the
Company is required to adopt Statement of Financial Accounting
Standard No. 128 "Earnings Per Share" ("FAS 128"). FAS 128
requires the presentation of basic earnings per share and diluted
earnings per share. "Basic earnings per share" represents net
income divided by the weighted average shares outstanding and is
consistent with the Company's historical presentation. "Diluted
earnings per share" represents net income divided by weighted
average shares outstanding adjusted for the incremental dilution of
outstanding employee stock options and awards. Diluted earnings
per share would have been $.45 and $.47, respectively for the three
months ended June 30, 1997 and 1996 and $.91 and $.94 for the six
months ended June 30, 1997 and 1996.
- 4 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Consolidated net sales for the second quarter of 1997 of
$304,000,000 was an increase of 3 percent over the second quarter
1996 sales of $295,200,000. Sales for the first six months of 1997
of $604,700,000 increased 3 percent over the $584,400,000 for the
same period last year. Sales in the U.S. for the second quarter of
1997 were $198,700,000, an increase of 4 percent from 1996, while
international sales were 105,300,000, up 1 percent against last
year. The impact of a strengthening dollar in the second quarter
decreased sales outside the U.S. by 7 percent. For the first six
months of 1997, U.S. sales totaled $397,000,000, up 3 percent,
while international sales increased 4 percent to $207,700,000.
Currency translation for the first half of 1997 decreased
international sales by approximately 6 percent and decreased
worldwide sales by approximately 2 percent.
PRODUCT GROUP SUMMARY OF NET SALES
(in thousands)
Quarter Ended June 30, Six Months Ended June 30,
Percent Percent
1996 1995 Change 1996 1995 Change
Vascular $116,100 $107,700 8 $227,700 $210,300 8
Urology 76,200 75,300 1 154,200 148,300 4
Oncology 55,100 52,700 5 110,400 105,700 4
Surgery 32,300 28,100 15 62,900 56,100 12
Sub-Total
Emphasis
Products $279,700 263,800 6 $555,200 $520,400 7
Other 24,300 31,400 (23) 49,500 64,000 (23)
Total
Worldwide $304,000 $295,200 3 $604,700 $584,400 3
Increased graft sales due to the IMPRA acquisition contributed to
the 8 percent increase in vascular sales for the quarter. Basic
drainage products contributed to the urology increase of 1 percent
for the quarter. Second quarter increases in specialty access
products and mesh were primarily responsible for the 5 and 15
percent growth in the oncology and surgery categories,
respectively.
- 5 -
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
The gross profit margin increased to 52.6 percent from 51.4 percent
for the six months ended June 30, 1997 and 1996, respectively,
mainly as a result of product mix and favorable variances.
Other income and expense is composed primarily of recurring items
such as interest income and foreign exchange. In addition, in the
second quarter of 1997 other income includes the gain from the sale
of an investment of approximately $1,800,000. In the second
quarter of 1996, other income included a one-time credit of
$2,500,000 related to the elimination of a contractual arrangement.
The Company's results for the quarter ended June 30, 1997 were net
income of $26,200,000 or $.46 per share as compared with
$27,500,000 or $.48 per share for the same quarter in 1996.
During the first six months of 1997 and 1996, the Company acquired
275,000 and 593,900, respectively, of its common shares which were
retired.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 12.1 - Computation of Ratio of Earnings to Fixed
Charges
(b) Exhibit 27 - Financial Data Schedule
(c) There were no reports on Form 8-K filed by the Company
during the quarter ended June 30, 1997.
- 6 -
<PAGE>
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
Executive Vice President and
Chief Financial Officer
Charles P. Grom /s/
Charles P. Grom
Vice President and Controller and
Chief Accounting Officer
Date: August 1, 1997
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<TABLE>
Exhibit 12.1 Computation of Ratio of Earnings to Fixed Charges
<CAPTION>
Six Months
Ending
6/30/97 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Earnings before taxes $75,600 $102,700 $123,500 $104,100 $101,400 $120,200
Add(Deduct)
Fixed Charges 19,900 33,500 31,500 23,200 18,700 19,900
Undistributed earnings
of less than 50% owned
companies carried at
equity (300) (700) (800) (400) (200) (500)
Interest capitalized 0 0 0 (200) 0 (300)
Earnings available for fixed
charges $95,200 $135,500 $154,200 $126,700 $119,900 $139,300
Fixed charges:
Interest, including
amounts capitalized 16,700 26,400 24,200 16,500 12,500 13,700
Proportion of rent
expense deemed to
represent interest
factor 3,200 7,100 7,300 6,700 6,200 6,200
Fixed Charges $19,900 $ 33,500 $ 31,500 $ 23,200 $ 18,700 $ 19,900
Ratio of earnings to fixed
charges 4.78 4.04 4.89 5.46 6.41 7.00
<FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 75700
<SECURITIES> 0
<RECEIVABLES> 247800
<ALLOWANCES> 11800
<INVENTORY> 249600
<CURRENT-ASSETS> 585000
<PP&E> 375100
<DEPRECIATION> 151900
<TOTAL-ASSETS> 1327400
<CURRENT-LIABILITIES> 326000
<BONDS> 341300
0
0
<COMMON> 14300
<OTHER-SE> 592900
<TOTAL-LIABILITY-AND-EQUITY> 1327400
<SALES> 604700
<TOTAL-REVENUES> 604700
<CGS> 286900
<TOTAL-COSTS> 286900
<OTHER-EXPENSES> 225500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16700
<INCOME-PRETAX> 75600
<INCOME-TAX> 23300
<INCOME-CONTINUING> 52300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52300
<EPS-PRIMARY> .92
<EPS-DILUTED> .92
</TABLE>
