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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 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
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock - $.25 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendments to this Form 10-K. [ X ]
The aggregate market value of the voting stock held by
nonaffiliates of the registrant was approximately $1,560,700,000
based on the closing price of stock traded on the New York Stock
Exchange on February 28, 1997. As of February 28, 1997, there were
57,011,717 shares of Common Stock, $.25 par value per share,
outstanding.
The company's definitive Proxy Statement dated March 7, 1997 has
been incorporated by reference with respect to certain information
contained therein in Part III and Part IV of this Form 10-K.
The exhibit index is located in Part IV, Item 14, Page IV-1.
PART I
Item 1. Business
General Development of Business
The company was started by Charles Russell Bard in 1907. One of
its first medical products was the silk urethral catheter imported
from France. In 1923, the company was incorporated as C. R. Bard,
Inc. and distributed an assortment of urological and surgical
products. Bard became a publicly-traded company in 1963 and five
years later was traded on the New York Stock Exchange.
In 1966, Bard acquired its supplier of urological and
cardiovascular specialty products - the United States
Catheter & Instrument Co. In 1980 Bard acquired its major source
of the Foley catheter - Davol Inc. Numerous other acquisitions
were made over the last thirty-five years broadening Bard's product
lines. Today, C. R. Bard, Inc. is a leading multinational
developer, manufacturer and marketer of health care products.
1996 sales of $1.194 billion increased 5% from 1995. 1995 sales of
$1.138 billion increased 7% from 1994. Net income for 1996 totaled
$92.5 million or $1.62 per share, and increased 7% and 6%
respectively against 1995. Net income for 1995 totaled $86.8
million or $1.53 per share, an increase of 15% and 14% respectively
against 1994.
Acquisitions
In September of 1996 Bard completed the acquisition of IMPRA, Inc.
("IMPRA"), a company that develops, manufactures and markets
vascular grafts used for blood vessel replacement surgery. The
purchase and acquisition costs which approximated $155.4 million
were financed with commercial paper. In addition, during 1996, the
company acquired St. Jude Medical's Cardiac Assist Division
and X-Trode S.r.l. These acquisitions enhance and expand the
company's existing product lines and further develop international
markets. The cost of these acquisitions amounted to approximately
$44.0 million and were financed through internally generated cash
and available credit lines.
In September 1995, the company completed a merger with MedChem
Products, Inc. ("MedChem") issuing 3,192,345 shares of its common
stock in exchange for all outstanding common stock of MedChem. In
October 1995, the company completed a merger with American Hydro-Surgical
Instruments, Inc. ("AHS") issuing 1,338,446 shares of its
common stock in exchange for all outstanding common stock of AHS.
These mergers have been accounted for as poolings of interests, and
accordingly, the company's information contained in this Annual
Report on Form 10-K were restated in 1995.
I-1
Acquisitions (continued)
During 1994 the company spent $118.2 million acquiring new
businesses. Angiomed AG, a German company with products marketed
in the areas of urology, radiology, vascular surgery and
gastroenterology was purchased in October 1994. VasCath, Inc., a
Canadian company with a strong position in specialty catheter
products was acquired in December 1994.
Product Group Information
Bard is engaged in the design, manufacture, packaging, distribution
and sale of medical, surgical, diagnostic and patient care devices.
Hospitals, physicians and nursing homes purchase approximately 90%
of the company's products, most of which are used once and
discarded.
The following table sets forth for the last three years ended
December 31, 1996, the approximate percentage contribution by
product line to Bard's consolidated net sales. The figures are on
a worldwide basis.
Years Ended December 31,
1996 1995 1994
Cardiovascular 33% 33% 35%
Urological 29% 28% 27%
Surgical 38% 39% 38%
Total 100% 100% 100%
Narrative Description of Business
General
Historically, Bard has been known for its products in the
urological field, where its Foley catheter is the leading device
for bladder drainage. Today, Bard's largest product group is in
surgical devices, contributing approximately 38% of consolidated
net sales.
Bard continually expands its research toward the improvement of
existing products and the development of new ones. It has
pioneered in the development of disposable medical products for
standardized procedures.
I-2
General (continued)
Bard's domestic sales may be grouped into three principal product
lines: cardiovascular, urological and surgical. International
sales include most of the same products manufactured and sold by
Bard's domestic operations. Domestic and international sales are
combined for product group sales presentation.
Cardiovascular - Bard's line of cardiovascular products includes
balloon angioplasty catheters, steerable guidewires, guide
catheters and inflation devices; angiography catheters and
accessories; introducer sheaths; electrophysiology products
including cardiac mapping and electrophysiology laboratory systems,
and diagnostic and temporary pacing electrode catheters;
cardiopulmonary support systems; and blood oxygenators and related
products used in open-heart surgery. See the first paragraph of
Item 3. Legal Proceedings on Page I-6 for additional information.
Urological - Bard offers a complete line of urological products
including Foley catheters, procedural kits and trays and related
urine monitoring and collection systems; biopsy and other cancer
detection products; ureteral stents; and specialty devices for
incontinence, endoscopic procedures and stone removal.
Surgical - Bard's surgical products include specialty access
catheters and ports; implantable blood vessel replacements; fabrics
and meshes for vessel and hernia repair; surgical suction,
irrigation and drainage devices; gastroenterological products,
irrigation devices for orthopaedic and laparoscopic procedures;
laparoscopic accessories; blood management devices and products for
wound management and skin care.
International - Bard markets cardiovascular, urological and
surgical products throughout the world. Principal markets are
Japan, Canada, the United Kingdom and continental Europe.
Approximately two-thirds of the sales in this segment are of
products manufactured by Bard in its facilities in Canada, France,
Germany, Ireland, Malaysia and the United Kingdom. The balance of
the sales are from products manufactured in the continental United
States, Puerto Rico or Mexico for export. Bard's foreign
operations are subject to the usual risks of doing business abroad,
including restrictions on currency transfer, exchange fluctuations
and possible adverse government regulations. See p. II-28 Note 10
in the Notes to Consolidated Financial Statements for additional
information.
I-3
Competition
The company knows of no published statistics permitting a general
industry classification which would be meaningful as applied to the
company's variety of products. However, products sold by the
company are in substantial competition with those of many other
firms, including a number of larger well-established companies.
The company depends more on its consistently reliable product
quality, dependable service and its ability to develop products to
meet market needs than on patent protection, although some of its
products are patented or are the subject of patent applications.
Marketing
The company's products are distributed domestically directly to
hospitals and other institutions as well as through numerous
hospital/surgical supply and other medical specialty distributors
with whom the company has distributor agreements. In international
markets, products are distributed either directly or through
distributors with the practice varying by country. Sales promotion
is carried on by full-time representatives of the company in
domestic and international markets.
Sales to a distributor, which supplies the company's products to
many end-users, accounted for approximately 8% of the company's
sales and the five largest distributors combined accounted for
approximately 21% of such sales. Combined sales to federal
agencies accounted for approximately 2% of sales in 1996
(See Item 3. Legal Proceedings).
In order to service its customers, both in the U.S. and outside the
U.S., the company maintains inventories at distribution facilities
in most of its principal marketing areas. Orders are normally
shipped within a matter of days after receipt of customer orders,
except for items temporarily out of stock, and backlog is normally
not significant in the business of the company.
Most of the products sold by the company, whether manufactured by
it or by others, are sold under the BARD trade name or trademark
or other trademarks owned by the company. Such products
manufactured for the company by outside suppliers are produced
according to the company's specifications.
I-4
Regulation
The development, manufacture, sale and distribution of the
company's products are subject to comprehensive government
regulation. Government regulation by various federal, state and
local agencies, which includes detailed inspection of and controls
over research and laboratory procedures, clinical investigations,
manufacturing, marketing, sampling, distribution, record keeping,
storage and disposal practices, substantially increases the time,
difficulty, and costs incurred in obtaining and maintaining the
approval to market newly developed and existing products.
Government regulatory actions can result in the seizure or recall
of products, suspension or revocation of the authority necessary
for their production and sale, and other civil or criminal
sanctions.
Raw Materials
The company uses a wide variety of readily available plastics,
textiles, alloys and rubbers for conversion into its devices. Two
large, U.S.-based chemical suppliers have sought to restrict the
sale of certain of their materials to the device industry for use
in implantable products. Although one guiding principle in the
adoption of this policy is the avoidance of negative economic
effect on the health care industry, a small portion of our product
lines may face a short-term threat to the continuity of their raw
material supply. Such suppliers have indicated that their action
is based on product liability concerns. Bard and the medical
device industry are working to resolve this problem in general and
with these suppliers to assure a continuing supply of necessary raw
materials. Bard is working to maintain a supply of qualified
materials by developing new supplies and increasing inventories of
important stocks.
Environment
The company continues to address current and pending environmental
regulations relating to its use of Ethylene Oxide for the sterilization
of some of its products. The company is complying with requlations
reducing permitted ETO emissions by installing scrubbing equipment
and adjusting its processes.
The company recognizes the Montreal Protocol Treaty, which plans for
the reduction of CFC use worldwide. The company has eliminated the
use of CFC's in its sterilization processes. The company intends to
continue to reduce its other uses of CFC's. Capital expenditures
required will not significantly adversely affect the company's earnings
or competitive position.
I-5
Employees
The company employs approximately 9,800 persons.
Seasonality
The Company's business is not affected to any material extent by
seasonal factors.
Research and Development
The Company's research and development expenditures amounted to
approximately $77,300,000 in 1996, $75,600,000 in 1995 and
$71,600,000 in 1994.
Item 2. Properties
The executive offices of the company are located in Murray Hill,
New Jersey in facilities which the company owns. Domestic
manufacturing and development units are located in Arizona,
California, Georgia, Kansas, Massachusetts, Michigan, New Jersey,
New York, Ohio, Puerto Rico, Rhode Island, South Carolina, Texas,
Utah and Washington. Sales offices and distribution points are in
these locations as well as others.
Outside the U.S., the company has plants or offices in Australia,
Austria, Belgium, Canada, China, France, Germany, Hong Kong, India,
Ireland, Italy, Japan, Korea, Malaysia, Mexico, the Netherlands,
Portugal, Singapore, Spain, Sweden, Switzerland and the United
Kingdom.
The company owns approximately 2,528,000 square feet in 23
locations and leases approximately 1,233,000 square feet of space
in 68 locations.
All these facilities are well maintained and suitable for the
operations conducted in them.
Item 3. Legal Proceedings
On October 14, 1993, the company entered into a Plea Agreement with
the Department of Justice in connection with charges stemming from
violations, primarily during the 1980s by the Company's USCI
division, of the Federal Food, Drug and Cosmetic Act and other
statutes. In connection with such violations, the Defense
Logistics Agency debarred the USCI division from entering into new
contracts with the U.S. Government. Such debarment expired
on June 19, 1996.
I-6
Item 3. Legal Proceedings (continued)
In November 21, 1994 an action was commenced against the company by
Surgical Laser Technologies, Inc. (SLT) in the United States
District Court for the Eastern District of Pennsylvania. The
Amended Complaint alleged that the company has repudiated, refused
to perform and breached an alleged contract with SLT, and further
alleges a breach of the duty of good faith and fair dealing in the
conduct of contract negotiations between the parties and unfair
competition. Damages of an unspecified amount are sought together
with injunctive relief. The company has answered the Amended
Complaint, denying that there was ever agreement to the alleged
contract, or that the company otherwise breached any duty owed to
SLT. Discovery has recently commenced and no trial date has yet
been set. The company believes it has meritorious defenses to this
action.
On October 6, 1995, Trimedyne, Inc. filed a complaint in State
Court in California alleging breach of contract, fraud and
negligent misrepresentation by the company in connection with its
performance under a Development, Supply and License Agreement dated
June 28, 1991, concerning side-firing laser products (Urolase ).
In addition, the complaint alleges that the company has failed to
pay for product purchased, along with certain other charges.
Trimedyne, Inc. seeks damages totalling $72 million plus punitive
damages. The case has been removed to the Federal District Court
and transferred to the District of New Jersey. The company
believes it has some liability to the plaintiff for certain goods
ordered; however, the amount is in dispute. Except as to this
claim, the company believes that it has meritorious defenses to
this action.
During 1993, the United States Environmental Protection Agency (the
"EPA") notified the Company's Urological division that it may be a
potentially responsible party relative to clean-up of the Frontier
Chemical site in Niagara Falls, New York. In September, 1993, the
company entered into a consent order concerning the first phase of
the clean-up, which was a drum removal action. The Company's
liability for the first phase was $119,000. A second phase of
remedial action involves removal of waste in several large tanks.
The Company's liability for this phase was assessed at less than
$14,000. The third phase of remedial action involves soil and
groundwater contamination which may be significant in view of the
age of this industrial site. The Company's responsibility for
clean up of this phase is unknown at this time, but it is believed
that the final resolution of this matter is not expected to have a
material adverse financial impact on the company.
I-7
Item 3. Legal Proceedings (continued)
During 1992, the EPA notified the company that it had been
identified as a potentially responsible party in connection with an
ongoing investigation of the Solvents Recovery Service of New
England site in Southington, Connecticut. Although the full extent
of liability in this case is unknown, the company has been
identified with less than one-half percent of the total gallonage
of waste materials. In June of 1995, the company accepted the
EPA's invitation to enter into negotiations concerning the Group's
undertaking the remedial investigation and feasibility study.
Negotiations concerning a Consent Order to allow the Group to
undertake the remedial investigation and feasibility study are
ongoing. The final resolution of this matter is not expected to
have a material adverse financial impact on the company.
The company is also subject to other legal proceedings and claims
which arise in the ordinary course of business.
Item 4. Results of Votes of Security Holders
Not applicable.
I-8
Executive Officers of the Registrant
Set forth below is the name, age, position, five year business
history and other information with respect to each executive
officer of the company as of March 1, 1997. No family
relationships exist among the officers of the company.
Name Age Position
William H. Longfield 58 Chairman and
Chief Executive Officer
and Director
Benson F. Smith 49 President and
Chief Operating Officer
and Director
William C. Bopp 53 Executive Vice President and
Chief Financial Officer
and Director
Guy J. Jordan 49 Group Vice President
Timothy M. Ring 39 Group Vice President
William T. Tumber 62 Senior Vice President
John H. Weiland 41 Group Vice President
E. Robert Ernest 56 Vice President - Planning
and Development
Richard A. Flink 62 Vice President, General Counsel
and Secretary
Christopher D. Ganser 44 Vice President - Quality
Assurance
Hope Greenfield 46 Vice President - Human
Resources
Charles P. Grom 49 Vice President and Controller
Richard D. Manthei 61 Vice President-Scientific
Affairs
Earle L. Parker 53 Vice President and
Treasurer
All officers of the company are elected annually by the Board of
Directors.
I-9
Mr. Longfield joined the company in 1989 and was elected executive
vice president and chief operating officer. In 1991 he was elected
president. In June 1994 he was elected president and chief
executive officer. In September 1995 he was elected to his present
position. Prior to joining the company, he was chief executive
officer since 1984 of the Cambridge Group, Inc., a provider of long
term health services for the elderly. Prior to joining Cambridge,
he was employed by Lifemark, Inc., a health care management
company, and for over 20 years with American Hospital Supply
Corporation.
Mr. Smith joined Bard in 1980. In 1990, he was appointed to the
position of group executive. In 1991, he was elected group vice
president. In 1993, he was elected to the position of executive
vice president with worldwide responsibility for operations. In
1994 he was elected to the additional post of chief operating
officer. In October 1995 he was elected to his present position.
Mr. Bopp joined the company in 1980. In 1983 he was elected to the
position of treasurer. He was named vice president and treasurer
in 1989. In 1992 he was elected senior vice president and chief
financial officer. In October 1995 he was elected to his present
position.
Mr. Jordan joined the company in 1986 as director of research and
development for USCI. In 1990 he was promoted to vice president
for specialty access products for Davol. In 1991 he was promoted
to vice president and general manager of Bard Access Systems and
became president of the division in 1993. In 1996 he was elected
to his present position.
Mr. Ring joined the company in 1992 and was elected vice president-
human resources. Prior to joining the company he had been with
Abbott Laboratories Inc., a pharmaceutical company, since 1982 and
his last position with their Hospital Products division had been
director of personnel. In December 1993, he was elected to the
position of group vice president.
Mr. Tumber joined Bard in 1980. In 1988 he was promoted to vice
president and general manager of Davol Inc. In 1990 he was
promoted to president of Davol Inc. and subsequently appointed to
the position of group executive. In September 1991, he was elected
to group vice president and in 1996 appointed to his present
position of senior vice president.
I-10
Mr. Weiland joined the company in February 1996 as group vice
president. Prior to joining the company, since 1991 he was senior
vice president, North American Group, with Dentsply International,
the nation's largest manufacturer of professional dental products.
Prior to that he was president and chief executive officer of
Pharmacia Diagnostics, Inc., a manufacturer of medical diagnostic
supplies and in various positions with Baxter International, Inc.,
a manufacturer of health care products and services.
Mr. Ernest joined the company in 1977 and was elected to his
present position in 1979.
Mr. Flink joined the company in 1970, was elected vice president
and general counsel in 1973 and was elected to his present position
in 1985.
Mr. Ganser joined the company in 1989 as Manager, Quality Assurance
in the Moncks Corner facility. In April, 1994 he was elected to
his present position.
Ms. Greenfield joined the company in October 1995 as corporate vice
president, human resources. Prior to joining the company she had
been with Digital Equipment Corporation, a supplier of information
systems and hardware, as vice president development and learning
and in various human resource positions.
Mr. Grom joined the company in 1977. In 1989 he was promoted to
assistant corporate controller and in 1994 was elected corporate
controller. In April 1995 he was elected to his present position.
Mr. Manthei joined the company is 1996. Prior to joining the
company, he was a partner in the law firm of McKenna and Cuneo in
Washington, DC, where he chaired the Food, Drug, Cosmetic and
Medical Device Department.
Mr. Parker joined the company in 1979. In December 1990 he was
promoted to vice president-operations for the USCI division and,
later that year, was promoted to vice president and general manager
of the USCI Angiography division. In 1992 he was elected Treasurer
and effective January 1, 1995 he was elected to his present
position.
I-11
PART II
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters
Market and Market Prices of Common Stock
The Company's common stock is traded on the New York Stock Exchange
using the symbol: BCR. The following table illustrates the high
and low sales prices as traded on the New York Stock Exchange for
each quarter during the last two years.
Quarters
1st 2nd 3rd 4th Year
1996
High 37-3/8 37 34-3/8 32-3/4 37-3/8
Low 29-1/2 31-7/8 28-3/4 25-7/8 25-7/8
Close 35-5/8 34-1/8 31-1/8 28 28
1995
High 28-1/8 31-1/8 31-7/8 32-1/4 32-1/4
Low 25-1/2 27-1/4 29-1/4 27-7/8 25-1/2
Close 27-5/8 30 30-1/2 32-1/4 32-1/4
Approximate Number of Equity Security Holders
Approximate Number
of Record Holders
Title of Class as of February 28, 1997
Common Stock - $.25 par value 7,184*
*Included in the number of shareholders of record are shares held
in "nominee" name.
Dividends
The company paid cash dividends of $37,700,000 or $.66 per share in
1996 and $33,100,000 or $.62 per share in 1995. The following
table illustrates the quarterly rate of dividends paid per share.
Quarters
1st 2nd 3rd 4th Year
1996 $ .16 $ .16 $ .17 $ .17 $ .66
1995 $ .15 $ .15 $ .16 $ .16 $ .62
In January 1997, the first quarter dividend of $.17 per share was
declared, indicating an annual rate of $.68 per share. The first
quarter dividend was paid on January 31, 1997 to shareholders of
record on January 20.
II-1
Item 6. Selected Financial Data
(Thousands of dollars except per share amounts)
For the Years Ended December 31,
1996 1995 1994 1993 1992
INCOME STATEMENT DATA
Net sales $1,194,400 $1,137,800 $1,064,600 $1,008,800 $1,033,800
Net income 92,500 86,800 75,600 57,800 83,400
BALANCE SHEET DATA
Total assets $1,332,500 $1,091,000 $1,043,100 $ 881,400 $ 789,200
Working capital 240,700 230,600 72,300 165,200 213,200
Long-term debt 342,800 198,400 93,400 82,100 84,000
Total debt 491,000 265,300 294,000 171,000 148,300
Shareholders'
investment 601,500 564,600 495,400 439,900 444,900
COMMON STOCK DATA
Net income per
share $ 1.62 $ 1.53 $ 1.34 $ 1.02 $ 1.45
Cash dividends
per share .66 .62 .58 .54 .50
Shareholders'
investment per
share $ 10.56 $ 9.89 $ 8.77 $ 7.77 $ 7.75
Average shares
outstanding
(000's) 57,090 56,731 56,461 56,692 57,422
SUPPLEMENTARY DATA
Return on average
shareholders'
investment 15.9% 16.4% 16.2% 13.1% 19.2%
Net income/net
sales 7.7% 7.6% 7.1% 5.7% 8.1%
Days-accts rec 70.3 66.7 62.3 60.7 63.1
Days-inventory 151.7 149.4 143.6 135.9 129.4
Total debt/total
capitalization 44.9% 32.0% 37.2% 28.0% 25.0%
Interest expense $ 26,400 $ 24,200 $ 16,300 $ 12,500 $ 13,400
R&D expense $ 77,300 $ 75,600 $ 71,600 $ 67,500 $ 62,300
# of employees 9,800 9,400 8,900 8,650 9,000
Net sales per
employee $ 121.9 $ 121.0 $ 119.6 $ 116.6 $ 114.9
Net income per
employee $ 9.4 $ 9.2 $ 8.5 $ 6.7 $ 9.3
II-2
Item 7. Management's Discussion and Analysis of Results
of Operations and of Financial Conditions
General
Bard is a leading multinational developer, manufacturer and
marketer of products for the large and growing health care
industry. Worldwide health care expenditures approximated $2.3
trillion in 1996 with about half that amount spent in the United
States. Bard's segment of this industry, itself a multi-billion
dollar market, is primarily specialized products used mainly in
hospitals, in outpatient centers and in physician's offices to meet
the needs of the medical profession in caring for their patients.
We seek to focus and concentrate on selected markets with cost-effective,
innovative products and specialized sales forces to
maximize our opportunities in these markets.
Summary Results
Consolidated net sales increased 5% in 1996 with the growth well
balanced among product groups and geographic areas. Net income
increased 7% and earnings per share rose 6%, with 1996 and 1995
income both affected by one-time charges, which are described
below.
One-time Items Affecting Results
Net income was affected in 1996 by one-time charges of $29.8
million, partially offset by a total of $18.6 million for the
reversal of tax reserves no longer required and certain other
items. These charges and income items are described on
page II-6 of this financial review and resulted in a net after-tax
reduction in income of $11.2 million. Net income in 1995 was
reduced by $13.5 million reflecting the costs of combining the
operations of MedChem and AHS into Bard. Net income in 1994 was
reduced by $16.9 million for certain legal fees and settlements.
Results of Operations - 1996 vs. 1995
Net sales totaled $1.194 billion in 1996, a 5% increase over 1995.
Price reductions totaled about 2% worldwide while a stronger dollar
reduced reported sales by 1%.
Sales of cardiovascular products rose 5% in 1996 to $394.2 million.
Radiology devices showed strong growth, primarily in markets
outside the U.S. Sales of cardiac assist devices acquired from St.
Jude Medical in January 1996 also added to the cardiovascular
growth rate.
II-3
Results of Operations - 1996 vs. 1995 (continued)
Urological product group sales totaled $342.4 million in 1996, a 6%
increase over 1995. Basic drainage products such as Foley
catheters and trays, other procedural trays, urinary bags and
meters and specialty devices all contributed to this growth. Our
growth in urological products was high in the U.S. market and we
continue to try to broaden our international market penetration.
Surgical product group sales increased 4% in 1996 to $457.8 million
with the growth in international markets a little higher than in
the U.S. The additional sales generated from the September 1996
IMPRA acquisition contributed significantly to surgical product
growth. Individual areas of good performance continue to be our
vascular access catheters and ports, hernia repair fabrics, and
orthopaedic irrigation devices. This was substantially offset by
declines in basic drainage and general surgery devices.
Sales in the United States grew 4% in 1996 to $782.0 million,
representing 65% of worldwide sales. Urological turned in the
highest growth rate of our three product groups, but surgical
continues to generate the most revenue. Cardiovascular sales
showed only a marginal increase in 1996 as fourth quarter new
product launches did not have enough time to generate increased
sales momentum.
Sales outside the U.S. grew 6% in 1996 to $412.4 million,
representing 35% of worldwide sales, compared with 34% in 1995.
Growth was highest in the cardiovascular product area, primarily
from strong balloon angioplasty product sales in Europe. Balloon
angioplasty products continued to do better outside the U.S. due to
a quicker regulatory approval process in most international
markets. Sales of urological products showed a small increase
outside the U.S. Significant declines in basic surgical suction,
irrigation, drainage and general surgery products offset good
increases in sales of several other surgical group products. The
effect of currency translation was to lower international sales by
almost 3% for the year. Excluding this effect, reported
international sales would have increased 9% over the prior year.
The geographic breakdown of sales outside the U.S. for the last
three years is:
1996 1995 1994
Europe, Middle East,
Africa 62% 62% 56%
Asia/Pacific area and
Western hemisphere,
excluding U.S. 38% 38% 44%
100% 100% 100%
II-4
Results of Operations - 1996 vs. 1995 (continued)
The cost of goods sold increased to 48.7% of sales in 1996 compared
with 48.3% in the prior year as price declines exceeded our ability
to reduce costs. Bard historically had been able to recover these
costs through its strong product position in its markets or by
offsetting the effect of inflation through its cost reduction
programs. Recently, market price reductions have exceeded our
gains in manufacturing efficiencies and our efforts to shift our
mix to higher margin products.
Marketing, selling and administrative expenses increased just over
3% in 1996, lower than the rate of growth in sales, as efforts were
increased to lower expenses to help offset some of the effects of
price declines. Also, we have realized synergies from the two
mergers completed late in 1995. As a percent to total sales, these
expenses represented 30.6% in 1996 compared with 31.2% in 1995.
Research and development spending increased over 2% in 1996,
representing 6.5% of sales, slightly less than the ratio to sales
in 1995. In our efforts to reduce costs, we eliminated certain
planned spending while continuing sufficient work on the programs
needed for our future success.
Additional interest expense related to acquisitions in 1996
resulted in an increase in total interest expense for the year.
Costs to combine the operations of acquisitions of $9.0 million in
1996 and $17.7 million in 1995 affected income in both years.
Please refer to Note 9, Other (Income) Expense, Net of the Notes to
Consolidated Financial Statements in this report for a summary of
items in this category in the last three years. Included in this
category in 1996 are charges of $31.0 million for the write down of
assets related to guidewire technology, $10.0 million for the
closing of certain manufacturing operations and a net amount of
$3.5 million for certain legal fees and settlements. Also included
are nonrecurring royalty payments of $9.2 million received in 1996
for prior periods.
Income Tax
The effective income tax rate was 10% in 1996. Excluding the
impact of the first quarter reversal of approximately $15 million
in tax reserves no longer required and the increased tax benefit in
the U.S. related to the one-time charges discussed previously, the
effective tax rate would have been 29.5% compared with 29.7% in
1995.
II-5
Net Income
Net income increased 7% in 1996 and was affected over the last
three years by costs to combine the operations of acquired
companies in 1995 and 1996 and by other one-time items in 1994 and
1996. The effect on net income and earnings per share in the last
three years were (in millions except per share amounts):
1996
Reorganization, asset writedown and
costs to combine operations $(29.80)
Reversal of tax reserves 15.00
Prior period royalty payments,
legal settlements and other 3.60
Total 1996 $(11.20)
Equivalent per share $ (.20)
1995
Costs to combine operations $(13.50)
Equivalent per share $( .24)
1994
Legal fees and settlements $(16.90)
Equivalent per share $ ( .30)
After adjusting for the items shown above, net income and earnings
per share (EPS) would have been:
Net Income
(millions) EPS
1996 $103.7 $1.82
1995 $100.3 $1.77
1994 $ 92.5 $1.64
Results of Operations - 1995 vs. 1994
Net sales totaled $1.138 billion in 1995, an increase of 12% over
the $1.018 billion originally reported for 1994. This 12% increase
includes 5% from new sales as a result of the two acquisitions Bard
made in 1995. Since they were accounted for as poolings of
interests, Bard's restated sales for 1994 are $1.065 billion,
resulting in a 7% increase to $1.138 billion in 1995. Worldwide
revenue growth of 10% in 1995 in the urological and surgical
product groups combined with a 1% increase in cardiovascular sales,
resulted in the consolidated increase of 7%. All of the growth
came from sales outside the U.S. as U.S. sales approximated the
prior year's level. Price reductions totaled 2% on a worldwide
basis in 1995 while higher foreign currency values versus the
dollar increased total reported sales by 2%.
II-6
In the urological product group, worldwide sales increased 10% in
1995, all of it from outside the U.S., with a substantial portion
the result of a full year's sales of Angiomed products in 1995
versus two months of sales following the acquisition in 1994.
Urological sales in 1994 increased 16% with a majority of the
increase a result of sales of the Contigen implant.
Surgical product group sales increased 10% in 1995, a majority of
which was outside the U.S. A full year of sales of Angiomed and
Vas-Cath products (acquired in 1994) benefited this area
substantially, as did strong growth in sales of vascular access
catheters and ports, fabrics and mesh products for hernia repair
and gastroenterology devices. Sales in 1994 of surgical products
increased 6% with the areas of vascular access, vascular fabrics
and mesh and gastroenterology showing good gains.
Sales of cardiovascular products increased just 1% in 1995. A full
year of Angiomed product sales benefited this area along with good
increases in interventional radiology and the FemoStop device.
U.S. sales continued to decline as the company awaited clearance
from the Food and Drug Administration (FDA) for new products from
our USCI division. In 1994, continued weakness in certain
cardiovascular product areas resulted in a 3% decline in sales in
this group. Increased sales outside the U.S. were more than offset
by declines in the U.S. which continued to be affected by the lack
of approvals by the FDA of new products from our USCI division.
Sales in the United States declined slightly in 1995 versus 1994
and represented 66% of total sales. Total surgical product sales
in the U.S. showed good growth with significant increases in sales
of vascular access, gastroenterology, hernia repair fabrics and new
MedChem products. Urological product sales in the U.S. were level
with 1994 while sales of cardiovascular products declined. Sales
in the United States increased 4% in 1994 and represented 71% of
total sales. Sales of the Contigen implant were the most important
contributor to this growth.
Sales growth outside the U.S. continued to be strong in 1995 with
a 24% increase over 1994, a significant portion from a full year of
sales of Angiomed and Vas-Cath products. Higher foreign currency
values in 1995 contributed 7% of the increase. Numerous products
in all three product groups showed significant gains in revenue in
1995. Sales outside the U.S. increased 9% in 1994 with a little
more than 1% of that growth the result of higher foreign currency
values. The growth was broad-based throughout our product areas
and major geographic markets. Acquisitions accounted for 3% of
this growth.
II-7
The cost of goods sold as a percent of sales was 48.3% in 1995 and
48.2% in 1994. Productivity gains, cost reductions and a favorable
product mix all contributed to reduced costs as a percent of sales
for several years through 1994 and these factors almost matched the
level of price reductions in 1995.
Marketing, selling and administrative expenses increased by 8.6% as
we invested in programs to boost future sales revenue. The
synergies from the two mergers closed late in 1995, and from our
divisional reorganization, were not realized by year-end. As a
percent of sales, these expenses were 31.2% in 1995 and 30.7% in
1994.
Research and development spending continued to increase as we
worked on new technologies and applications for the future. The
level of spending as a percent to sales was 6.6% in 1995 and 6.7%
in 1994.
Interest expense increased from $16.3 million in 1994 to $24.2
million in 1995 as average debt levels increased as a result of
acquisitions made in 1994.
Costs to combine the operations of acquisitions made in 1995 were
$17.7 million. No amounts were recorded in this category in 1994.
Other (income) expense, net in 1994 included a $28.2 million one-time charge
for certain legal fees and the settlement of a suit. No nonrecurring items
were recorded in 1995 in this category.
The effective income tax rate was 29.7% in 1995 and 27.4% in 1994.
The tax benefit from operations in Puerto Rico and Ireland
favorably affected the tax rate each year. The lower rate in 1994
was primarily due to the one-time charge that was tax effected at
U.S. rates.
Net income increased 15% in 1995 and 31% in 1994. Each year was
affected by one-time items as described earlier in this financial
review.
Financial Condition and Liquidity
Bard's financial condition remains strong. While total debt
increased by $225.7 million in 1996, primarily for acquisitions,
$150 million in long-term debt was issued in the public market and
$120 million remains classified as long-term with the backing of
our committed credit facility. The ratio of total debt to total
capitalization was at 45% in 1996 compared with 32% in 1995
II-8
and 37% in 1994. In 1995, Bard's equity base was increased with
the issuance of common stock for the acquisitions of MedChem
Products and American Hydro-Surgical. In 1995 the company
completed the arrangement of a $350 million syndicated, committed
credit facility with a group of 15 banks. With the long-term debt
issue in December 1996, the company reduced the credit agreement to
$300 million with 11 banks, effective January 1, 1997.
The credit agreement supports a commercial paper program which
started in September 1996 with a maximum amount of $350 million,
reduced by the company to $300 million effective January 1, 1997.
The company borrows actively under this program.
In addition to the $300 million committed credit agreement, Bard
maintains uncommitted credit lines with banks for short-term cash
needs and these lines were used as needed during the last three
years. At December 31, 1996 the unused uncommitted lines of credit
totaled $239 million.
As now structured, the company expects cash flows from operating
activities to exceed capital expenditures and dividend payments.
The company believes it could borrow adequate funds at competitive
terms and rates, should it be necessary. This overall financial
strength gives Bard sufficient financing flexibility.
Total cash outlays made for purchases of businesses, patents,
trademarks and other related items were $237 million in 1996, $19
million in 1995 and $148 million in 1994 for a total over the last
three years of $404 million. The majority of these investments
were for intangible assets, reflecting the premium over book value
for these purchases. The cash outlays exclude common stock valued
at $135 million issued in 1995 for the acquisitions of MedChem
Products and American Hydro-Surgical. The majority of the cash
outlays were financed with additional debt ($320 million) with the
balance coming from cash from operations.
Periodically, the company purchases its common stock in the open
market to replace shares issued under various employee stock plans.
Net shares issued under the plans were 699,085 in 1996; 648,943 in
1995; and 318,912 in 1994. Total shares purchased were 813,700 in
1996; 75,000 in 1995; and 350,000 in 1994. In June 1996 the Board
of Directors authorized the purchase from time to time of up to 1
million shares of which 244,800 had been purchased as of
December 31, 1996.
II-9
Foreign Currency Risk
The company periodically enters into foreign exchange contracts to
reduce its exposure to fluctuations in currency values. Contracts
have been exclusively for the forward purchase of currencies in
which the company has known or anticipated payments. These are
primarily for intercompany transactions, resulting in a high degree
of confidence that the anticipated transactions will take place.
Monetary assets of the company held in foreign currencies have
relatively short maturities and are denominated in currencies that
have not experienced wide short-term fluctuations in their
equivalent U.S. dollar values. Please refer to Note 4 of the Notes
to Consolidated Financial Statements of this report for current
details of the company's foreign exchange contracts.
Legal Proceedings
For a discussion of pending legal proceedings and related matters,
please see Note 5, Commitments and Contingencies, of the Notes to
Consolidated Financial Statements on page II-21.
Acquisitions
For information on the company's acquisitions of businesses, please
see Note 2 of the Notes to Consolidated Financial Statements on
page II-17.
II-10
Item 8. Financial Statements and Supplementary Data
Report of Independent Public Accountants
To the Shareholders and Board of
Directors of C. R. Bard, Inc.:
We have audited the accompanying consolidated balance sheets
of C. R. Bard, Inc. (a New Jersey corporation) and subsidiaries as
of December 31, 1996 and 1995 and the related consolidated
statements of income, retained earnings and cash flows for each of
the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
C. R. Bard, Inc. and subsidiaries as of December 31, 1996 and 1995,
and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
January 24, 1997
II-11
C. R. BARD, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(Thousands of dollars except For the Years Ended December 31,
per share amounts) 1996 1995 1994
Net sales $1,194,400 $1,137,800 $1,064,600
Costs and expenses:
Cost of goods sold 581,300 550,000 513,500
Marketing, selling
and administrative 365,800 354,600 326,500
Research and development 77,300 75,600 71,600
Interest expense 26,400 24,200 16,300
Costs to combine
operations 9,000 17,700 ---
Other(income)expense, net 31,900 (7,800) 32,600
Total costs & expenses 1,091,700 1,014,300 960,500
Income before taxes 102,700 123,500 104,100
Income tax provision 10,200 36,700 28,500
Net income $ 92,500 $ 86,800 $ 75,600
Net income per share $ 1.62 $ 1.53 $ 1.34
C. R. BARD, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED RETAINED EARNINGS
(Thousands of dollars except For the Years Ended December 31,
per share amounts) 1996 1995 1994
Balance, beginning of year $ 478,900 $ 427,300 $ 392,800
Net income 92,500 86,800 75,600
Cash dividends (per share
1996, $.66; 1995, $.62;
1994, $.58) (37,700) (33,100) (30,100)
Excess of cost over par value
of treasury stock retired
(1996-813,700 shares,
1995-75,000 shares and
1994-350,000 shares) (27,000) (2,100) (8,900)
Adjustment to give
effect to change in
reporting period for
MedChem --- --- (2,100)
Balance, end of year $ 506,700 $ 478,900 $ 427,300
The accompanying notes to consolidated financial statements are an
integral part of these statements.
II-12
C. R. BARD, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars) December 31,
1996 1995
Assets
Current assets:
Cash $ 11,300 $ 9,300
Short-term investments 66,700 42,000
Accounts receivable, less reserve of
$10,200 and $9,700 245,400 215,700
Inventories 245,000 228,200
Other current assets 8,500 8,700
Total current assets 576,900 503,900
Property, plant and equipment, at cost:
Land 11,700 11,200
Buildings and improvements 158,700 147,500
Machinery and equipment 194,200 179,200
364,600 337,900
Less - Accumulated depreciation and
amortization 138,500 123,700
Net property, plant and equipment 226,100 214,200
Intangible assets, net of amortization 447,200 315,500
Other assets 82,300 57,400
$1,332,500 $1,091,000
Liabilities and shareholders' investment
Current liabilities:
Short-term borrowings and current
maturities of long-term debt $ 148,200 $ 66,900
Accounts payable 59,200 62,700
Accrued compensation and benefits 40,300 39,800
Accrued expenses 81,200 91,600
Federal and foreign income taxes 7,300 12,300
Total current liabilities 336,200 273,300
Long-term debt 342,800 198,400
Other long-term liabilities 52,000 54,700
Commitments and contingencies --- ---
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 56,985,983 shares
in 1996, 57,100,598 shares in 1995 14,300 14,300
Capital in excess of par value 77,500 63,300
Retained earnings 506,700 478,900
Other 3,000 8,100
Total shareholders' investment 601,500 564,600
$1,332,500 $1,091,000
The accompanying notes to consolidated financial statements are an
integral part of these balance sheets.
II-13
C. R. BARD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of dollars)
For the Years Ended December 31,
1996 1995 1994
Cash flows from operating activities:
Net income $ 92,500 $ 86,800 $ 75,600
Adjustments to reconcile net
income to net cash provided
from operating activities:
Depreciation and amortization 57,400 50,600 43,400
Deferred income taxes 7,300 (1,600) (4,400)
Expenses under stock plans 2,300 2,000 1,400
Asset write down & tax reserve
reversal, net 15,400 0 0
Changes in assets and
liabilities net of acquired
businesses:
Accounts receivable (21,500) (21,600) (7,600)
Inventories (9,800) (15,800) (16,300)
Other assets 6,000 8,900 9,400
Current liabilities, excluding
debt (24,400) 29,100 (23,100)
Other long-term liabilities (2,700) (21,700) (7,200)
Net cash provided from operating
activities 122,500 116,700 71,200
Cash flows from investing activities:
Capital expenditures (41,600) (39,600) (37,100)
Payments made for purchases of
businesses (199,400) (300) (122,200)
Patents, trademarks and other (37,700) (18,600) (25,500)
Net cash used in investing
activities (278,700) (58,500) (184,800)
Cash flows from financing activities:
Common stock issued for options and
benefit plans 11,500 9,500 2,900
Purchase of common stock (27,200) (2,100) (9,000)
Proceeds from long-term
borrowings 166,400 126,300 3,300
Debt issuance costs (6,800) 0 0
Principal payments of long-term
borrowings (3,100) (22,000) (1,100)
Proceeds from(repayments of)
short-term borrowings, net 79,700 (133,700) 102,000
Dividends paid (37,700) (33,100) (30,100)
Net cash provided by (used in)
financing activities 182,800 (55,100) 68,000
Translation adjustment (400) (200) 4,300
Cash and cash equivalents:
Increase(decrease) during the
year 26,200 2,900 (41,300)
Balance at January 1, 37,400 34,500 75,800
Balance at December 31, $63,600 $ 37,400 $ 34,500
The accompanying notes to consolidated financial statements are an
integral part of these statements.
II-14
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
C. R. Bard, Inc. ("the company" or "Bard") is a leading
multinational developer, manufacturer and marketer of health care
products. The company markets its products worldwide to hospitals,
individual health care professionals, extended care facilities and
alternate site facilities. The company holds strong positions in
cardiovascular, urological and surgical products.
1. Significant Accounting Policies
Consolidation The consolidated financial statements include the
accounts of the company and its majority-owned subsidiaries. All
significant intercompany accounts and transactions are eliminated
in consolidation.
Income Per Share The computations of income per share are based on
the weighted average number of shares outstanding: 57,090,130 in
1996, 56,730,542 in 1995 and 56,460,762 in 1994. The effect of
outstanding stock options and stock awards is not material and has
been excluded from the computations.
Inventories Inventories are stated at the lower of cost or market.
Substantially all domestic inventories are accounted for using the
LIFO method of determining costs. All other inventories are
accounted for using the FIFO method. Inventories valued under the
LIFO method were $151,000,000 in 1996, $140,000,000 in 1995 and
$138,000,000 in 1994; under the FIFO method such inventories would
have been higher by $15,800,000, $15,700,000 and $13,300,000,
respectively. The following is a summary of inventories at
December 31:
(Thousands of dollars) 1996 1995
Finished goods $148,300 $130,700
Work in process 59,500 72,600
Raw materials 37,200 24,900
$245,000 $228,200
Depreciation Property, plant and equipment are depreciated on a
straight-line basis over the useful lives of the various classes of
assets.
Short-term Investments Short-term investments which have a maturity
of ninety days or less are considered cash equivalents and amounted
to $52,300,000 and $28,100,000 as of December 31, 1996 and 1995.
Short-term investments are stated at cost which approximates their
market value.
II-15
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Intangible Assets Goodwill is amortized using the straight-line
method over periods of 15-40 years as appropriate and other
intangible assets are amortized over their useful lives. The
company continually evaluates its intangibles to assess
recoverability from future operations using undiscounted cash
flows. Impairment would be recognized in operating results if a
permanent diminution in value occurred.
As of December 31, 1996 and 1995, intangible assets include the
following:
(Thousands of dollars) 1996 1995
Goodwill $392,300 $231,900
Other intangibles (primarily 162,900 173,500
patents)
Less accumulated amortization (108,000) (89,900)
Intangible assets, net $447,200 $315,500
Federal Income Taxes The company has not provided for federal
income taxes on the undistributed earnings of its foreign
operations (primarily in Ireland) as it is the company's intention
to permanently reinvest undistributed earnings (approximately
$262,000,000 as of December 31, 1996).
Stock-Based Compensation Stock-based compensation is recognized
using the intrinsic value method. For disclosure purposes, pro
forma net income and earnings per share are provided as if the fair
value method had been applied.
Concentrations of Credit Risk Financial instruments, which
potentially subject the company to significant concentrations of
credit risk, consist principally of cash investments, foreign
currency exchange contracts, and trade accounts receivable.
The company maintains cash and cash equivalents, investments, and
certain other financial instruments with various major financial
institutions. The company performs periodic evaluations of the
relative credit standing of these financial institutions and limits
the amount of credit exposure with any institution.
Concentrations of credit risk with respect to trade accounts
receivable are limited due to the large number of customers and
their dispersion across many geographic areas. However, a
significant amount of trade receivables are with national health
care systems in several countries. Although the company does not
currently foresee a credit risk associated with these receivables,
repayment is dependent upon the financial stability of those
countries' national economies.
II-16
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Use of Estimates The financial statements and related disclosures
have been prepared in conformity with generally accepted accounting
principles and, accordingly, include amounts based on informed
estimates and judgments of management with consideration given to
materiality. Actual results could differ from those estimates.
Reclassifications Certain prior year amounts have been reclassified
to conform with the current year presentation.
2. Acquisitions
In September of 1996 Bard completed the acquisition of IMPRA, Inc.
("IMPRA"), a company that develops, manufactures and markets
vascular grafts used for blood vessel replacement surgery. The
purchase and acquisition costs which approximated $155,400,000 were
financed with commercial paper. This acquisition has been
accounted for under the purchase method of accounting and,
accordingly, IMPRA's assets and liabilities have been recorded at
their estimated fair market values and the excess purchase price
of $140,900,000 has been assigned to goodwill. This acquisition
did not have a significant effect on the company's results of
operations. The 1996 costs to combine operations related to the
acquisition were $9,000,000.
During 1996, the company acquired St. Jude Medical's Cardiac Assist
Division and X-Trode S.r.l. These acquisitions have been accounted
for under the purchase method of accounting and enhance or expand
the company's existing product lines and further develop
international markets. The cost of these acquisitions amounted to
$44,000,000 and were financed through internally generated cash and
available credit lines. These acquisitions did not have a
significant effect on the company's results of operations.
In September 1995, the company completed a merger with MedChem
Products, Inc. ("MedChem") issuing 3,192,345 shares of its common
stock in exchange for all outstanding common stock of MedChem. In
October 1995, the company completed a merger with American Hydro-Surgical
Instruments, Inc. ("AHS") issuing 1,338,446 shares of its
common stock in exchange for all outstanding common stock of AHS.
These mergers were accounted for as poolings of interests and,
accordingly, the company's consolidated financial statements for
prior periods were restated in 1995. In connection with these
mergers, $17,700,000 of merger related costs and expenses
($13,500,000 after-tax or $.24 per share) were incurred and have
been charged to expense in 1995. These one-time charges include
expenses primarily related to investment bankers and professional
fees, and key personnel and severance related costs.
II-17
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Acquisitions (continued)
During 1994 the company acquired several companies which are
primarily located outside the United States. These acquisitions
have been accounted for under the purchase method of accounting and
enhance or expand the company's existing product lines and further
develop international markets. The cost of these acquisitions
amounted to $118,200,000 and were financed through internally
generated cash and available credit lines. These acquisitions did
not have a significant effect on the company's results of
operations.
3. Income Tax Expense
Income tax expense consists of the following:
(Thousands of dollars) 1996 1995 1994
Currently payable:
Federal $ (6,300) $ 23,600 $ 22,300
Foreign 7,500 8,900 8,100
State 1,700 5,800 2,500
2,900 38,300 32,900
Deferred:
Federal 7,600 (1,700) (3,300)
Foreign (300) 100 (1,100)
7,300 (1,600) (4,400)
$ 10,200 $36,700 $ 28,500
Deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates,
applicable to future years, to differences between the financial
reporting and the tax basis of assets and liabilities. At
December 31, 1996, the company's net deferred tax asset amounted to
approximately $22,900,000 which is recorded in other assets. This
amount principally comprises the tax effects of the differences
between tax and financial accounting treatment of employee benefits
of $14,200,000, accrued expenses of $10,200,000 and other temporary
differences offset by the effect of accelerated depreciation
($7,800,000).
II-18
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Income Tax Expense (continued)
The following is a reconciliation between the effective tax rates
and the statutory rates:
1996 1995 1994
U.S. federal statutory rate 35% 35% 35%
State income taxes net of
federal income tax benefits 3 3 2
Foreign operations taxed at
less than the U.S. statutory
rate, primarily Ireland and
Puerto Rico (13) (11) (10)
Reversal of tax reserve (15) --- ---
Other, net --- 3 ---
Effective tax rate 10% 30% 27%
During 1996, the company reversed certain tax reserves
approximating $15,000,000 that were no longer deemed necessary.
Cash payments for income taxes were $27,100,000, $34,100,000 and
$47,400,000 in 1996, 1995 and 1994, respectively.
4. Short-Term Borrowings and Long-Term Debt
The company maintains uncommitted lines of credit, a commercial
paper program and a committed credit facility which supports the
commercial paper program. Total short-term borrowings amounted to
$146,300,000 and $66,800,000 at December 31, 1996 and 1995,
respectively. The maximum amount outstanding during 1996 was
approximately $289,400,000 with an average outstanding balance of
$165,700,000 and an effective rate of 5.38%.
Short-term borrowings under uncommitted lines of credit amounted to
$71,400,000 at December 31, 1996. Unused uncommitted lines of
credit available to the company amounted to $238,700,000 at
December 31, 1996. In 1996, the company initiated a $350,000,000
commercial paper program of which $194,900,000 was outstanding at
December 31, 1996. Borrowings of $120,000,000 have been classified
as long-term debt since the company has both the intention and
ability through its committed credit lines to refinance these
amounts on a long-term basis. The committed line of credit is a
facility with 11 banks through which the company can borrow at
rates slightly above LIBOR through June 2000. The company had no
borrowings under the committed line of credit at December 31, 1996.
As a result of the long-term debt offering, discussed below, the
company amended its commercial paper program and committed line of
credit from $350,000,000 to $300,000,000, effective January 1,
1997.
II-19
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Short-Term Borrowings and Long-Term Debt (continued)
The following is a summary of long-term debt:
(Thousands of dollars) 1996 1995
8.69% notes due 1999 $ 60,000 $ 60,000
7.8% mortgage loan 9,500 9,100
Commercial paper and bank borrowings 120,000 120,000
6.70% notes due 2026 150,000 0
Other 5,200 9,400
$344,700 $198,500
Less: amounts classified as current: 1,900 100
$342,800 $198,400
In June 1996, the company filed a shelf registration with the
Securities and Exchange Commission for the future issuance of up to
$200,000,000 of long-term debt. As part of the registration, in
December 1996 the company issued $150,000,000 of long-term notes
due 2026. The effective interest of the notes, including the
financing costs, is 7.17%. These notes may be redeemed at the
option of the note holder on December 1, 2006, at a redemption
price equal to the principal amount.
Under five deposit loan agreements with a bank, $48,000,000 has
been borrowed at floating rates (4.34% at December 31, 1996) with
various maturity dates from September 1997 through July 2004. At
maturity, the loans are to be repaid through matured certificates
of deposits held by the company at the same bank. Since the
company has the right of offset under these agreements and it is
the company's intention to present these certificates of deposit
for repayment of these loans at their maturity, the borrowings have
been offset against these certificates of deposit in the
accompanying consolidated balance sheet at December 31, 1996. The
related interest income has been offset against the interest
expense.
As of December 31, 1996, the aggregate maturities of long-term debt
were as follows: 1997 - $1,900,000; 1998 - $1,200,000; 1999-$61,200,000;
2000 - $121,200,000; 2001 - $1,200,000; 2002 and thereafter - $158,000,000.
The fair value of the company's long-term debt is not significantly
different from its recorded value. Interest expense in 1996, 1995 and 1994
approximated the cash outlay in each year.
II-20
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Short-Term Borrowings and Long-Term Debt (continued)
The company's debt agreements contain restrictions which, among
other things, require the maintenance of minimum net worth and
operating cash flow levels and limitations on the amounts of debt.
The company enters into foreign exchange contracts to help reduce
the exposure to fluctuations between certain currencies. In 1996
and 1995, the contracts primarily related to the anticipated normal
purchases by a subsidiary in Japan from a subsidiary in Ireland.
At December 31, 1995, there were Irish pound contracts outstanding
payable in Japanese yen equivalent to $5,800,000. Early in 1996
the company entered into similar contracts equivalent
to $15,700,000. There were no contracts outstanding at the end of
1996.
5. Commitments and Contingencies
During 1994 the company recorded a $28.2 million pretax charge
($16.9 million charge after taxes). This charge related to the
settlement of a 1992 lawsuit by the inventor of an atherectomy
device and includes a provision for legal costs, and other costs
related to the USCI division. During 1996 the remaining accrual of
$2.5 million pretax related to this charge was deemed to be no
longer required as a result of the elimination of a contractual
arrangement and credited to other income.
The company is involved in two lawsuits which allege breaches of
agreements where substantial amounts have been claimed. In
addition, judgments have been rendered against the company
potentially aggregating as much as $5 million. The company is
presently appealing these judgments. The company is also subject
to other legal proceedings and claims involving product liability
and disputes on agreements which arise in the ordinary course of
business. The company believes that these legal matters will
likely be disposed of over an extended period of time and should
not have a material adverse impact on the company's financial
position or results of operations.
The company is committed under noncancelable operating leases
involving certain facilities and equipment. The minimum annual
rentals under the terms of these leases are as follows: 1997 -
$19,600,000; 1998 - $14,300,000; 1999 - $7,300,000; 2000 -
$4,800,000; 2001 - $3,500,000; and thereafter - $12,700,000. Total
rental expense for all leases approximated $28,400,000 in 1996,
$29,300,000 in 1995 and $26,800,000 in 1994.
II-21
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Stock Rights
In October 1995 the company's Board of Directors declared a
dividend distribution of one Common Share Purchase Right for each
outstanding share of Bard common stock. These Rights will expire
in October 2005 and trade with the company's common stock. Such
Rights are not presently exercisable and have no voting power. In
the event a person acquires 20% or more, or makes a tender or
exchange offer for 30% or more of Bard's common stock, the Rights
detach from the common stock and become exercisable and entitle a
holder to buy one share of common stock at $120.00 (adjustable to
prevent dilution).
If, after the Rights become exercisable, Bard is acquired or
merged, each Right will entitle its holder to purchase $240 market
value of the surviving company's stock for $120, based upon the
current exercise price of the Rights. The company may redeem the
Rights, at its option, at $.05 per Right, prior to a public
announcement that any person has acquired beneficial ownership of
at least 20% of Bard's common stock. These Rights are designed
primarily to encourage anyone interested in acquiring Bard to
negotiate with the Board of Directors. There are 60 million shares
of common stock reserved for the rights.
7. Shareholders' Investment
The company has stock option, stock award and restricted stock
plans under which certain directors, officers and employees are
participants. In 1996, shareholders of the company approved the
addition of 1,550,000 shares to the 1993 Long-term Incentive Plan.
At December 31, 1996, 1,240,170 shares were reserved for issuance
under all company plans.
Under the company's stock option plans, options have been granted
to certain directors, officers and employees at prices equal to the
market value of the shares at the date of grant, become exercisable
in four annual installments and expire not more than 10 years after
the date of grant.
In accordance with Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" ("FAS 123"), which
was effective as of January 1, 1996, the fair value of option
grants is estimated on the date of grant using the Black-Scholes
option-pricing model for proforma footnote purposes with the
following assumptions used for grants in all years; dividend yield
of 2%, risk-free interest rate of 6.67% and expected option life of
4.4 years. Expected volatility was assumed to be 33% in 1995 and
29% in 1996.
II-22
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Shareholders' Investment (continued)
Weighted Weighted
Number Average Average
Of Exercise Fair
Shares Price Value
Options outstanding,
December 31, 1993 3,062,320 $22.59
Granted 1,065,885 $21.57
Exercised (225,855) $14.93
Canceled (264,770) $27.93
Options outstanding,
December 31, 1994 3,637,580 $22.38
(1,881,918 exercisable)
Granted 853,075 $34.42 $7.94
Exercised (563,444) $18.37
Canceled (235,272) $50.55
Options outstanding,
December 31, 1995 3,691,939 $23.98
(2,038,844 exercisable)
Granted 703,940 $32.89 $9.61
Exercised (688,708) $20.47
Canceled (202,116) $26.91
Options outstanding,
December 31, 1996 3,505,055 $26.31
(1,905,876 exercisable)
The following table summarizes information about stock options
outstanding at December 31, 1996:
Weighted Weighted Weighted
Range of Number Average Average Number Average
Exercise Outstanding Remaining Exercise Exercisable Exercise
Prices at 12/31/96 Life Price at 12/31/96 Price
$10 to 21 482,967 5.5 $17.28 427,886 $16.86
$21 to 24 753,648 5.4 $22.50 455,865 $22.46
$24 to 27 892,993 6.3 $26.44 792,462 $26.41
$27 to 30 631,479 7.2 $29.67 170,358 $29.55
$30 to 41 743,968 8.9 $33.09 59,305 $35.33
$10 to 41 3,505,055 6.5 $26.31 1,905,876 $24.01
As permitted by FAS 123, the company has chosen to continue
accounting for stock options at their intrinsic value. Accordingly
no compensation expense has been recognized for its stock option
compensation plans. Had the fair value method of accounting been
applied to the company's stock option plans, the tax-effected
impact would be as follows:
II-23
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Shareholders' Investment (continued)
(Thousands of dollars except per share amounts)
1996 1995
Net income as reported $92,500 $86,800
Estimated fair value of the
year's option grants,
net of tax (1,700) (600)
Net income adjusted $90,800 $86,200
Adjusted net income per share $ 1.59 $ 1.52
This proforma impact only takes into account options granted since
January 1, 1995 and is likely to increase in future years as
additional options are granted and amortized ratably over the
vesting period.
Under the company's stock award plans for key employees and
directors, shares are granted at no cost to the recipients and
distributed in three separate installments. During 1996 awards for
26,742 shares (net of cancellations) were granted and 28,837 shares
were issued. Awards are charged to income over the vesting period.
At December 31, 1996, 28,124 awarded shares (aggregate market price
at date of grant $899,000) have not been issued.
Under the company's restricted stock plan, which was established in
1993, common stock may be granted at no cost to certain officers
and key employees. Shares are issued to the participants at the
date of grant entitling the participants to cash dividends and the
right to vote their respective shares. Restrictions limit the sale
or transfer of these shares during a five year period from the
grant date. Upon issuance of stock under the plan, unearned
compensation ($5,000,000 at December 31, 1996) equivalent to the
market value of the stock at the date of grant is reflected in
shareholders' investment and subsequently amortized to expense over
the five year restriction period. During 1996, 71,610 shares were
granted, net of forfeitures.
Additions to capital in excess of par value of $14,200,000 in 1996
and $12,300,000 in 1995 relate to shares issued under these plans
in excess of the related par value of the shares.
II-24
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Shareholders' Investment (continued)
For shares purchased by the company, common stock is charged for
the par value of the shares retired and retained earnings is
charged for the excess of the cost over the par value of shares
retired.
Cumulative foreign currency translation included in other
shareholders' investment amounted to $8,000,000 at
December 31, 1996, and decreased by $4,400,000 during the year.
8. Postretirement Benefits
The company has defined benefit pension plans which cover
substantially all domestic and certain foreign employees and its
policy is to fund accrued pension expense for these plans up to the
full funding limitations. These plans provide for benefits based
upon individual participants' compensation and years of service.
The company also has a supplemental defined contribution plan for
certain officers and key employees. Individual participant
accounts under the supplemental plan are credited annually based
upon a percentage of compensation. The amounts charged to income
for these plans amounted to $13,800,000 in 1996, $12,800,000 in
1995 and $13,600,000 in 1994.
The following table sets forth the funded status of the defined
benefit pension plans as of September 30, 1996 and 1995 and amounts
recognized in the company's consolidated balance sheets at
December 31, 1996 and 1995:
(Thousands of dollars) 1996 1995
Actuarial present value of accumulated
benefit obligation, including vested
benefits of $75,000 in 1996 and $68,000
in 1995 $ 84,400 $ 76,400
Plan assets at fair value, primarily
investment securities $ 97,000 $ 77,300
Less: Actuarial present value of
projected benefit obligation for
service rendered to date 102,400 92,500
Projected benefit obligation in excess
of plan assets (5,400) (15,200)
Unrecognized (income) loss (600) 6,400
Unrecognized prior service cost 6,700 7,600
Unrecognized net asset at transition
amortized over 12 years (2,500) (3,400)
Accrued pension cost included in other
liabilities $ (1,800) $ (4,600)
II-25
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Postretirement Benefits
Pension costs related to the defined benefit pension plans for
the years ended December 31, 1996, 1995 and 1994 are as follows:
(Thousands of dollars) 1996 1995 1994
Net pension cost includes:
Service cost $ 7,000 $ 6,800 $ 8,000
Interest cost 7,000 6,700 6,700
Actual return on plan
assets (12,000) (12,800) (2,600)
Net amortization and deferral 5,400 6,000 (3,500)
Net pension cost $ 7,400 $ 6,700 $ 8,600
The range of assumed discount rates used was 4.00% to 8.50% with
the rate on domestic plans at 8.00% in 1996 and 7.75% in 1995. The
rate of increase in future salary levels ranged from 2.00% to 6.50%
in determining the projected benefit obligation. The expected
long-term rate of return on assets used in determining net pension
cost ranged from 7.75% to 9.00%.
The company also provides postretirement health care benefits and
life insurance coverage to a limited number of employees at a
subsidiary. The health care benefits include cost-sharing features
based on years of service for future retirees. The company
recognizes expense as employees earn postretirement benefits. The
amounts charged to income for this plan were approximately $600,000
in 1996 ($100,000 of service cost and $500,000 of interest cost)
and $800,000 in 1995 and 1994.
Actuarial assumptions included a discount rate of 8.00%. Health
care cost trends have been projected at annual rates beginning at
11% for 1996 decreasing gradually down to 6% in 2001 and later
years. The effect of a 1% annual increase in these assumed cost
trend rates would increase the accumulated postretirement benefit
obligation at December 31, 1996, by $700,000 and postretirement
benefit cost by $100,000.
II-26
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Other (Income) Expense, Net
In addition to recurring items such as interest income and foreign
exchange, other income and expense includes several one-time items.
During 1996, the company reorganized its global cardiology business
and recorded a $31,000,000 ($16,800,000 net of tax) writedown 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 recorded a one-time charge of $10,000,000
($6,200,000 net of tax) related to the reorganization of certain
existing manufacturing operations and $9,200,000 in income
($5,500,000 net of tax) related to royalty payments received on
sales of certain licensed angioplasty products for prior periods.
Other (income) expense, net in the Statements of Consolidated
Income is summarized as follows:
(Thousands of dollars) 1996 1995 1994
Interest Income $ (3,800) $(3,400) $ (4,600)
Foreign exchange (gains)losses 400 (3,300) (400)
Asset writedown 31,000 --- ---
Manufacturing reorganization 10,000 --- ---
Prior period royalties (9,200) --- ---
Legal fees and settlements, net
(Note 5) 3,500 --- 28,200
Other, net --- (1,100) 9,400
Total $ 31,900 $(7,800) $ 32,600
II-27
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Segment Information
The company is engaged in the design, manufacture, packaging,
distribution and sale of medical, surgical, diagnostic and patient
care devices. Hospitals, physicians and nursing homes purchase
approximately 90% of the company's products, most of which are used
once and discarded. Information pertaining to domestic and foreign
operations as of December 31, 1996, 1995 and 1994 and for the years
then ended is given below.
(Thousands of dollars)
United Elimi- Consoli-
States Foreign nations dated
1996
Sales:
Trade $782,000 $375,100 $ --- $1,157,100
Export 37,300 --- --- 37,300
Intersegment 115,100 21,300 (136,400) ---
Total $934,400 $396,400 $(136,400) $1,194,400
Operating income $125,800 $ 68,500 $ (33,300)(a) $ 161,000
Identifiable assets:
December 31, 1996 $940,600 $391,900 $ --- $1,332,500
1995
Sales:
Trade $749,000 $353,500 $ --- $1,102,500
Export 35,300 --- --- 35,300
Intersegment 95,800 10,400 (106,200) ---
Total $880,100 $363,900 $(106,200) $1,137,800
Operating income $102,800 $ 66,600 $ (29,500)(a) $ 139,900
Identifiable assets:
December 31, 1995 $747,000 $344,000 $ --- $1,091,000
1994
Sales:
Trade $751,500 $283,500 $ --- $1,035,000
Export 29,600 --- --- 29,600
Intersegment 97,700 4,400 (102,100) ---
Total $878,800 $287,900 $(102,100) $1,064,600
Operating income $106,700 $ 59,000 $ (12,700) $ 153,000
Identifiable assets:
December 31, 1994 $734,000 $309,100 $ --- $1,043,100
(a) Includes nonrecurring acquisition costs of $9,000 and $17,700
in 1996 and 1995, respectively.
II-28
C. R. BARD, INC. AND SUBSIDIARIES
QUARTERLY FINANCIAL DATA
1996
1st 2nd 3rd 4th Year
(Thousands of dollars
except per share amounts)
Net sales $289,200 $295,200 $295,800 $314,200 $1,194,400
Cost of goods
sold 140,600 143,300 146,600 150,800 581,300
Income before
taxes 10,600 39,000 15,200 37,900 102,700
Net income 27,100 27,500 11,400 26,500 92,500
Per share information:
Net Income $ .48 $ .48 $ .20 $ .46 $ 1.62
Dividends $ .16 $ .16 $ .17 $ .17 $ .66
Note: The first quarter 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 with a positive
after-tax impact of approximately 1 cent per share. The
second quarter included a one-time credit of $2,500 related
to the elimination of a contractual arrangement which, if
excluded, would have had a negative after-tax impact of
approximately 2 cents per share. Reflected in the third
quarter results are one-time charges of $10,000 related to
the reorganization of certain existing manufacturing
operations and $9,000 of expenses as a result of the IMPRA
acquisition with a negative after-tax impact of approximately
11 cents per share and 12 cents per share respectively.
1995
1st 2nd 3rd 4th Year
(Thousands of dollars
except per share amounts)
Net sales $278,100 $291,100 $277,600 $291,000 $1,137,800
Cost of goods
sold 134,200 140,600 134,200 141,000 550,000
Income before
taxes 35,400 35,900 21,200 31,000 123,500
Net income 24,900 25,000 14,100 22,800 86,800
Per share information:
Net Income $ .44 $ .44 $ .25 $ .40 $ 1.53
Dividends $ .15 $ .15 $ .16 $ .16 $ .62
Note: The third quarter results include a $12,500 charge (18 cents
per share after-tax) for costs associated with the merger of
MedChem Products, Inc. The fourth quarter results include
a $5,200 charge (6 cents per share after-tax) for costs
associated with the merger of American Hydrosurgical
Instruments, Inc.
II-29
C. R. BARD, INC. AND SUBSIDIARIES
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
II-30
C. R. BARD, INC. AND SUBSIDIARIES
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors of the Registrant
Information with respect to Directors of the company is
incorporated herein by reference to the material contained under
the heading "Proposal No. 1 - Election of Directors" appearing on
pages 1 through 4 of the Company's definitive Proxy Statement dated
March 7, 1997.
Executive Officers of the Registrant
Information with respect to Executive Officers of the Registrant
are on pages I-9 through I-11 of this filing.
Item 11. Executive Compensation
The information contained under the caption "Executive
Compensation" appearing on Pages 7 through 8 of the Company's
definitive Proxy Statement dated March 7, 1997 is incorporated
herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information contained under the captions "Securities Ownership
of Certain Beneficial Owners" and "Securities Ownership of
Management" on pages 5 and 6 of the Company's definitive Proxy
Statement dated March 7, 1997 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
The information contained under the caption "Compensation of
Outside Directors - Related Transactions" on page 15 of the
Company's definitive Proxy Statement dated March 7, 1997 is
incorporated herein by reference.
III-1
C. R. BARD, INC. AND SUBSIDIARIES
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) l. Financial Statements and Supplementary Data
Included in Part II Item 8 of this report:
Page
II-11 Report of Independent Public Accountants.
II-12 Statements of Consolidated Income and Statements of
Consolidated Retained Earnings for the three years
ended December 31, 1996.
II-13 Consolidated Balance Sheets at December 31, 1996 and
1995.
II-14 Consolidated Statements of Cash Flows for the three
years ended December 31, 1996.
II-15 Notes to Consolidated Financial Statements.
II-29 Quarterly Financial Data.
2. Financial Statement Schedules
Schedules are omitted because they are not applicable, are
not required or the information required is included in the
financial statements or notes thereto.
3. Exhibits, No.
3a Registrant's Restated Certificate of Incorporation, as
amended, as of April 17, 1996, filed as Exhibit 3 to
the Company's September 30, 1996 Form 10-Q is
incorporated herein by reference.
3b Registrant's Bylaws revised as of September 11, 1996.
(p. IV-8).
4a Rights Agreement dated as of October 11, 1995 between
C. R. Bard, Inc. and First Chicago Trust Company of
New York as Rights Agent, filed as Exhibit 1
to the Company's Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on
October 12, 1995 is incorporated herein by reference.
4b Indenture, dated as of December 1, 1996 between C. R.
Bard, Inc. and the Chase Manhattan Bank, as trustee,
filed as Exhibit 4.1 to the Company's Registration
Statement on Form S-3, File No. 333-05997 is
incorporated herein by reference.
IV-1
C. R. BARD, INC. AND SUBSIDIARIES
3. Exhibits, No. (Continued)
10 Plea Agreement with attachments and Civil Settlement
Agreement between United States of America and C. R.
Bard, Inc. dated October 14, 1993, filed as Exhibit 10
to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993, File No. 1-6926 is
incorporated herein by reference.
10a* Benson F. Smith Severance Agreement dated as of
June 29, 1994 filed as Exhibit 10a to the 1994 Annual
Report on Form 10-K is incorporated herein by
reference.
10b* William H. Longfield Severance Agreement as amended
dated as of July 13, 1994 filed as Exhibit 10b to the
1994 Annual Report on Form 10-K is incorporated herein
by reference.
10c* William C. Bopp Severance Agreement as amended dated
as of August 31, 1994 filed as Exhibit 10c to the 1994
Annual Report on Form 10-K is incorporated herein by
reference.
10d* Hope Greenfield Severance Agreement dated as of
March 6, 1996 filed as Exhibit 10d to the 1995 Annual
Report on Form 10-K is incorporated herein by
reference.
10e* Richard A. Flink Severance Agreement as amended dated
as of July 22, 1994 filed as Exhibit 10e to the 1994
Annual Report on Form 10-K is incorporated herein by
reference.
10f* E. Robert Ernest Severance Agreement as amended dated
as of July 19, 1994 filed as Exhibit 10f to the 1994
Annual Report on Form 10-K is incorporated herein by
reference.
10g* William H. Longfield Supplemental Executive Retirement
Agreement dated as of January 12, 1994, filed as
Exhibit 10g to the Company's 1993 Annual Report on
Form 10-K is incorporated herein by reference.
10h* 1990 Stock Option Plan, filed as Exhibit 10h to the
Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
10i* 1989 Employee Stock Appreciation Rights Plan, filed as
Exhibit 10i to the Company's 1993 Annual Report on
Form 10-K is incorporated herein by reference.
IV-2
C. R. BARD, INC. AND SUBSIDIARIES
3. Exhibits, No. (Continued)
10j* C. R. Bard, Inc. Agreement and Plans Trust, filed as
Exhibit 10j to the Company's 1993 Annual Report on
Form 10-K is incorporated herein by reference.
10k* Supplemental Insurance/Retirement Plan, Plan I - For
new corporate officer when previous agreement as non-officer exists,
Plan II - For new corporate officer when no previous agreement
exists, filed as Exhibit 10k to the Company's 1993 Annual Report on
Form 10-K is incorporated herein by reference.
10l* Retirement Plan for Outside Directors of C. R. Bard,
Inc., filed as Exhibit 10l to the Company's 1993
Annual Report on Form 10-K is incorporated herein by
reference.
10m* Deferred Compensation Contract Deferral of Directors'
Fees, as amended entered into with directors William
T. Butler, M.D., Regina E. Herzlinger, and Robert P.
Luciano, filed as Exhibit 10m to the Company's 1993
Annual Report on Form 10-K is incorporated herein by
reference.
10n* 1988 Directors Stock Award Plan, as amended in October
1991, filed as Exhibit 10n to the Company's 1993
Annual Report on Form 10-K is incorporated herein by
reference.
10o* Excess Benefit Plan, filed as Exhibit 10o to the
Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
10p* Supplemental Executive Retirement Plan, filed as
Exhibit 10p to the Company's 1993 Annual Report on
Form 10-K is incorporated herein by reference.
10q* 1994 Executive Bonus Plan, filed as Exhibit 10 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994, File No. 1-6926 is
incorporated herein by reference.
10r* Long Term Performance Incentive Plan, filed as Exhibit
10r to the Company's 1993 Annual Report on Form 10-K
is incorporated herein by reference.
IV-3
C. R. BARD, INC. AND SUBSIDIARIES
3. Exhibits, No. (Continued)
10s* Deferred Compensation Contract Deferral of
Discretionary Bonus, filed as Exhibit 10s to the
Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
10t* Deferred Compensation Contract Deferral of Salary,
filed as Exhibit 10t to the Company's 1993 Annual
Report on Form 10-K is incorporated herein by
reference.
10u* 1993 Long Term Incentive Plan, filed as Exhibit 10u to
the Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
10v* Earle L. Parker Severance Agreement dated as of
June 29, 1994 filed as Exhibit 10v to the Company's
1994 Annual Report on Form 10-K is incorporated herein
by reference.
10w* John H. Weiland Severance Agreement dated as of
March 11, 1996 filed as Exhibit 10w to the Company's
1995 Annual Report on Form 10-K is incorporated herein
by reference.
10x* William T. Tumber Severance Agreement dated as of
March 13, 1996 filed as Exhibit 10x to the Company's
1995 Annual Report on Form 10-K is incorporated herein
by reference.
10y* Timothy M. Ring Severance Agreement dated as of
March 12, 1996 filed as Exhibit 10y to the Company's
1995 Annual Report on Form 10-K is incorporated herein
by reference.
10z* Guy J. Jordan Severance Agreement dated as of
October 10, 1996. (p. IV-20).
10aa* Charles P. Grom Severance Agreement dated as of
December 11, 1996. (p. IV-39).
12.1 Computation in Support of Ratio of Earnings to Fixed
Charges.
21 Subsidiaries of registrant. (p. IV-58).
23 Arthur Andersen LLP consent to the incorporation by
reference of their report on Form 10-K into previously
filed Forms S-8. (P.IV-60).
IV-4
C. R. BARD, INC. AND SUBSIDIARIES
3. Exhibits, No. (Continued)
27 Financial data schedule
99 Indemnity agreement between the company and each of
its directors and officers, filed as Exhibit 99 to
the Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
* Each of these exhibits listed under the number 10 constitutes
a management contract or a compensatory plan or arrangement.
All other exhibits are not applicable.
(b) Reports on Form 8-K
(b) The Registrant filed a current Report on Form 8-K as
amended, dated September 16, 1996, announcing the
acquisition of IMPRA, Inc. and certain financial and
proforma information.
IV-5
C. R. BARD, INC. AND SUBSIDIARIES
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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)
By: William C. Bopp /s/
William C. Bopp
Executive Vice President and
Chief Financial Officer
Date: March 17, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signatures Title Date
William H. Longfield /s/ Chairman and March 17,1997
William H. Longfield Chief Executive Officer
and Director
(Principal Executive
Officer)
William C. Bopp /s/ Executive Vice President March 17, 1997
William C. Bopp and Chief Financial
Officer and Director
(Principal Financial
Officer)
Charles P. Grom /s/ Vice President and March 17, 1997
Charles P. Grom Controller
(Principal Accounting
Officer)
Benson F. Smith /s/ President and March 17, 1997
Benson F. Smith Chief Operating
Officer and Director
IV-6
C. R. BARD, INC. AND SUBSIDIARIES
Signatures Title Date
Joseph F. Abely, Jr. /s/ Director March 26, 1997
Joseph F. Abely, Jr.
Marc C. Breslawsky /s/ Director March 26, 1997
Marc C. Breslawsky
William T. Butler, M.D. /s/ Director March 26, 1997
William T. Butler, M.D.
Raymond B. Carey, Jr. /s/ Director March 26, 1997
Raymond B. Carey, Jr.
Daniel A. Cronin, Jr. /s/ Director March 26, 1997
Daniel A. Cronin, Jr.
T. Kevin Dunnigan /s/ Director March 26, 1997
T. Kevin Dunnigan
Regina E. Herzlinger /s/ Director March 26, 1997
Regina E. Herzlinger
Robert P. Luciano /s/ Director March 26, 1997
Robert P. Luciano
Robert H. McCaffrey /s/ Director March 26, 1997
Robert H. McCaffrey
Tony L. White /s/ Director March 26, 1997
Tony L. White
IV - 7