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, 1997
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 28, 1997
Common Stock - $.25 par value 57,093,752
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets -
March 31, 1997 and December 31, 1996 1
Condensed Statements of Consolidated Income
and Retained Earnings For The Three Months
Ended March 31, 1997 and 1996 2
Condensed Consolidated Statements of Cash
Flows For The Three Months Ended
March 31, 1997 and 1996 3
Notes to Consolidated Financial Statements 4
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 4
PART II - OTHER INFORMATION 7
<PAGE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
<CAPTION>
March 31, December 31,
1997 1996
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments $ 84,000 $ 78,000
Accounts receivable, net 237,900 245,400
Inventories 242,000 245,000
Other current assets 10,800 8,500
Total current assets 574,700 576,900
Property, plant and equipment, net 223,500 226,100
Intangible assets, net of amortization 434,800 447,200
Other assets 84,500 82,300
$1,317,500 $1,332,500
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings and current
maturities of long-term debt $ 139,600 $ 148,200
Accounts payable 50,100 59,200
Accrued expenses 118,600 121,500
Federal and foreign income taxes 19,600 7,300
Total current liabilities 327,900 336,200
Long-term debt 342,700 342,800
Other long-term liabilities 52,300 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 56,999,599
shares and 56,985,983 shares 14,300 14,300
Capital in excess of par value 78,300 77,500
Retained earnings 522,400 506,700
Other (20,400) 3,000
594,600 601,500
$1,317,500 $1,332,500
<FN>
</TABLE>
The accompanying notes to 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 The Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Net sales $300,700 $289,200
Costs and expenses:
Cost of goods sold 143,200 140,600
Marketing, selling and administrative 94,100 86,400
Research and development expense 21,100 19,300
Interest expense 8,200 6,000
Other(income)expense, net (3,800) 26,300
Total costs and expenses 262,800 278,600
Income before taxes 37,900 10,600
Provision for income taxes 11,800 (16,500)
Net income 26,100 27,100
Retained earnings, beginning of period 506,700 478,900
Treasury stock retired (700) (9,600)
Cash dividends (9,700) (9,100)
Retained earnings, end of period $522,400 $487,300
Weighted average shares outstanding 57,029 56,903
Net income per share $ .46 $ .48
Cash dividends per share $ .17 $ .16
<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,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 26,100 $ 27,100
Noncash items and other (10,100) (5,700)
16,000 21,400
Cash flows from investing activities:
Capital expenditures $ (8,800) (8,100)
Other long-term investments, net (17,800) (37,700)
(26,600) (45,800)
Cash flows from financing activities:
Purchase of common stock (700) (9,700)
Dividends paid (9,700) (9,100)
Other financing activities (7,800) 42,500
(18,200) 23,700
Cash and cash equivalents:
Increase (decrease) during the period (28,800) (700)
Balance at January 1, 63,600 37,400
Balance at March 31, $ 34,800 $ 36,700
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
-3-
<PAGE>
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, 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 $49,200,000 at
March 31, 1997. These investments have not been treated as cash
and cash equivalents for cash flow presentation purposes.
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 March 31, 1997 and 1996.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company announced on April 16, 1997 at its annual meeting that
it will now report sales using five new product group categories.
Designed around the concept of disease state management, three of
the Company's new product group categories are: vascular diagnosis
and intervention, urological diagnosis and intervention, and
oncological diagnosis and intervention. Sales from these three
product groups represent 82 percent of Bard's first quarter
revenue. A fourth product group entitled surgical specialties
represents 10 percent of total sales and when combined with the
three disease state product groups represents Bard's emphasis sales
category. The remaining 8 percent of net sales resulting from de-emphasized
products will be reported in the "other" category.
- 4 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Consolidated net sales for the first quarter of 1997 of
$300,700,000 increased 4 percent over the first quarter 1996 sales
of $289,200,000. Sales in the U.S. for the first quarter of 1997
were $198,300,000, an increase of 2 percent from 1996, while
international sales were up 7 percent against last year. The
impact of a strengthening dollar in the first quarter decreased
sales outside the U.S. by 5 percent. Pricing pressures have
decreased sales by 1 percent.
PRODUCT GROUP SUMMARY OF NET SALES
(in thousands) For the Three Months Ended March 31,
Percent
1997 1996 Change
Vascular $111,600 $102,600 9
Urology 78,000 73,000 7
Oncology 55,300 53,000 4
Surgery 30,600 28,000 9
Subtotal-emphasis products 275,500 256,600 7
Other 25,200 32,600 (23)
Total-worldwide $300,700 $289,200 4
Increased graft sales due to the IMPRA acquisition contributed to
the 9 percent increase in vascular sales. Strong Foley catheter
sales contributed to the urology increase of 7 percent. Increases
in specialty access products and mesh were primarily responsible
for the 4 and 9 percent growth in the oncology and surgery
categories, respectively.
The gross profit margin increased to 52.4 percent from 51.4 percent
for the three months ended March 31, 1997 and 1996, respectively,
mainly as a result of product mix and favorable variances.
Other income and expense includes the gain from a product line sale
and foreign exchange losses which in total increase pretax income
by $2,900,000 with a favorable after tax impact of approximately 3
cents per share. The first quarter of 1996 included nonrecurring
items related to an asset writedown, the receipt of revenues
related to prior year royalties, miscellaneous charges and tax
reserve reversals reducing pretax income by $27,100,000 with a
positive after-tax impact of approximately 1 cent per share.
The Company's results for the quarter ended March 31, 1997 were net
income of $26,100,000 or 46 cents per share as compared with
$27,100,000 or 48 cents per share for the same quarter in 1996.
During the first three months of 1997 and 1996, the Company
acquired 25,000 and 274,500, respectively, of its common shares
which were retired.
- 5 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Cautionary Statement Regarding Forward-Looking Information
Certain statements contained herein or in other Company documents
and certain statements that may be made by management of the
Company orally may contain forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995. Because
actual results are affected by risks and uncertainties, the Company
cautions investors that actual results may differ materially from
those expressed or implied. Factors which could cause the actual
results to differ materially from expected and historical results
include, but are not limited to: health care industry consolidation
resulting in customer demands for price concessions, competitor's
attempts to gain market share through aggressive marketing
programs; fewer medical procedures performed in a cost-conscious
environment; the lengthy approval time by the FDA or other
government authorities to clear medical devices for commercial
release; unanticipated product failures; legislative or
administrative reforms to the U.S. Medicare and Medicaid systems or
other non-U.S. reimbursement systems in a manner that would
significantly reduce reimbursements for procedures using the
Company's medical devices; the acquisition of key patents by
competitors that would have the effect of excluding the Company
from new market segments; the uncertainty of whether increased
research and development expenditures will result in increased
sales; unpredictability of existing and future litigation including
litigation regarding product liability; price increases from the
Company's suppliers of critical components; foreign currency
fluctuations; the risk that the Company may not achieve
manufacturing or administrative efficiencies as a result of the
Company's recent reorganization around disease management states or
in the integration of recently acquired businesses.
- 6 -
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
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 16, 1997.
(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 four Class I directors elected for a term
of three years to serve until the 2000 Annual Meeting were
as follow: William C. Bopp, For - 46,495,104 Authority
Withheld - 814,444; Marc C. Breslawsky, For - 46,476,029
Authority Withheld - 833,519; William T. Butler, M.D.,
For - 46,493,588 Authority Withheld - 815,960 and
Daniel A. Cronin, Jr., For - 46,466,289 Authority
Withheld - 843,259; and the additional Class II director
elected for a term of one year was as follow:
Tony L. White, For - 46,482,321 Authority Withheld -
827,227.
(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) Ratification of the appointment of Arthur Andersen LLP
as independent public accountants for the year 1997.
For 47,153,463
Against 72,637
Abstain and Broker Nonvotes 83,488
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 March 31, 1997.
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<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: May 13, 1997
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<PAGE>
Exhibit 12.1
<TABLE>
<CAPTION>
Computation of Ratio of Earnings to Fixed Charges
Three Months
Ending
3/31/96 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Earnings before taxes $37,900 $102,700 $123,500 $104,100 $101,400 $120,200
Add(Deduct)
Fixed Charges 9,800 33,500 31,500 23,200 18,700 19,900
Undistributed earnings
of less than 50% owned
companies carried at
equity (150) (700) (800) (400) (200) (500)
Interest capitalized 0 0 0 (200) 0 (300)
Earnings available for fixed
charges $47,550 $135,500 $154,200 $126,700 $119,900 $139,300
Fixed charges:
Interest, including
amounts capitalized 8,200 26,400 24,200 16,500 12,500 13,700
Proportion of rent
expense deemed to
represent interest
factor 1,600 7,100 7,300 6,700 6,200 6,200
Fixed Charges $ 9,800 $ 33,500 $ 31,500 $ 23,200 $ 18,700 $ 19,900
Ratio of earnings to fixed
charges 4.85 4.04 4.89 5.46 6.41 7.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 84,000
<SECURITIES> 0
<RECEIVABLES> 237,900
<ALLOWANCES> 11,800
<INVENTORY> 242,000
<CURRENT-ASSETS> 574,700
<PP&E> 368,500
<DEPRECIATION> 145,000
<TOTAL-ASSETS> 1,317,500
<CURRENT-LIABILITIES> 327,900
<BONDS> 342,700
0
0
<COMMON> 14,300
<OTHER-SE> 580,300
<TOTAL-LIABILITY-AND-EQUITY> 1,317,500
<SALES> 300,700
<TOTAL-REVENUES> 300,700
<CGS> 143,200
<TOTAL-COSTS> 143,200
<OTHER-EXPENSES> 119,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,200
<INCOME-PRETAX> 37,900
<INCOME-TAX> 11,800
<INCOME-CONTINUING> 26,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,100
<EPS-PRIMARY> .46
<EPS-DILUTED> .45
</TABLE>
