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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
Commission File Number 001-10109
BECKMAN INSTRUMENTS, INC.
2500 Harbor Boulevard, Fullerton, California 92634
(714) 871-4848 (Principal Executive Offices)
State of Incorporation: Delaware
I.R.S. Employer Identification No.: 95-104-0600
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Common Stock, $.10 par value
Name of each exchange on which registered: 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 amendment to the
Form 10-K. (X)
Aggregate market value of voting stock held by non-affiliates of
the registrant as of January 26, 1996: $1,006,327,115.
Common Stock, $.10 par value, outstanding as of January 26, 1996:
29,063,599 shares.
Documents incorporated by reference in this report:
Documents incorporated Form 10-K part number
Annual Report to stockholders for
the fiscal year ended December 31, 1995 Part I and Part II
Proxy Statement for the 1996 Annual
Meeting of Stockholders to be held on
April 4, 1996 Part III
BECKMAN INSTRUMENTS, INC.
PART I
Item 1. Business
Beckman Instruments, Inc. ("Beckman" or "the Company") is
one of the world's leading manufacturers of instrument systems
and test kits that make laboratories more efficient by
simplifying and automating chemistry and biology based analytical
procedures. The Company designs, manufactures, markets and
services a broad range of laboratory instrument systems, reagents
and related products, which customers typically use to conduct
basic scientific research, new product research and development
or diagnostic analysis of patient samples. In 1995 about 60
percent of total sales were for diagnostic applications,
principally in hospital laboratories, while about 40 percent of
sales were for life science applications in universities, medical
schools and research institutes, or new product research and
development in pharmaceutical and biotechnology companies.
Slightly more than one-half of reported sales were to customers
outside the United States.
Background
The Company was founded in 1934 by Dr. Arnold O. Beckman to
manufacture analytical instruments and became a publicly traded
corporation in 1952, subsequently being listed on the New York
Stock Exchange in 1955. In 1968 the Company expanded its
laboratory instrument focus to include health care applications
in clinical diagnostics. Beckman was acquired by SmithKline
Corporation to form SmithKline Beckman Corporation ("SmithKline
Beckman") in 1982, and the Company was operated as a wholly owned
subsidiary of SmithKline Beckman until November 4, 1988. At that
time approximately 16% of Beckman's common stock was sold in a
public offering and the stock was listed on the New York Stock
Exchange. On July 26, 1989, SmithKline Beckman distributed the
remainder of its Beckman common stock as a tax free dividend to
the stockholders of SmithKline Beckman. This was part of a
transaction involving the merger of SmithKline Beckman and
Beecham Group p.l.c., a public limited company organized under
the laws of the United Kingdom ("Beecham"). Since that time
Beckman has operated as a fully independent publicly owned
company.
Simplification and Automation of Laboratory Processes
The Company's primary expertise and activity is the
integration of chemical, biological, engineering and software
sciences into complete systems that simplify and automate
biologically focused laboratory processes and the distribution
and support of those systems around the world. These laboratory
processes can generally be grouped into four categories:
Synthesis and Sample Preparation/Handling -
Synthesizing compounds useful in subsequent analysis
and scientific investigation or placing material into a
proper container, with necessary pretreatment,
dilution, measurement, weighing and identification.
Separation - Isolating materials of interest from
extraneous material or separating mixtures into
individual constituents, often in preparation for
subsequent processing and measurement.
Detection, Measurement and Characterization -
Determining the identity, structure, or quantity of
specific analytes (compounds or molecules of interest)
present in sample specimens.
Data Processing - Acquiring, reporting, analyzing,
archiving or calculating the results of laboratory
analysis.
Beckman's experience, knowledge and ability in simplifying
and automating these processes for biological laboratories forms
a technological continuum that extends across the Company. From
this common technical base comes a range of products that are
configured to meet specific needs of academic research,
pharmaceutical and biotechnology companies, hospitals,
physicians' offices and reference laboratories (large central
laboratories to which hospitals and physicians refer specialized
tests). By serving several customer groups with differing needs
related through common science, the Company has the opportunity
to broadly apply its technology.
There is a corresponding scientific and technical continuum
reflected in customer laboratories. Virtually all new analytical
methods and tests originate in academic research in universities
and medical schools. If the utility of a new method or test is
demonstrated by fundamental research, it often will then be used
by pharmaceutical investigators, biotechnology companies,
teaching hospitals or specialized clinical laboratories in an
investigatory mode. In some cases these new techniques
eventually emerge in routine, high volume clinical testing at
hospitals and reference labs. Generally instruments used at each
stage from research to routine clinical applications employ the
same fundamental processes but may differ in operating features
such as number of tests performed per hour and degree of
automation.
Markets
Beckman's products facilitate a wide range of laboratory
processes in facilities concerned with cells, sub-cellular
particles, biochemical compounds and analysis of patient samples.
In 1995 the worldwide market for the types of products the
Company provides was about $6 billion. Slightly over one-half of
this market was in clinical diagnostic applications, with the
remaining portion of the market in more general purpose life
science applications. Other similar or related product
categories not currently offered by the Company represent an
additional market potential which is estimated to be
approximately $10 billion. The size and growth of markets for
the Company's products are influenced by technological innovation
in bioanalytical practice, government funding for basic and
disease related research (for example, heart disease, AIDS and
cancer), research and development spending by biotechnology and
pharmaceutical companies, health care spending and physician
practice.
Products
The Company offers a wide range of instrument systems and
related products, including consumables, accessories, and support
services, which can be grouped into categories by type of
laboratory process or application:
Synthesis and Sample Preparation/Handling
Separation Processes
Detection, Measurement and Characterization
Data Processing
Automated General Chemistry for Clinical Diagnostics
Special Chemistry Applications for Clinical Diagnostics
PRODUCT SALES AS A PERCENT OF TOTAL PRODUCT SALES
FOR CATEGORIES REPRESENTING
MORE THAN 10 PERCENT OF SALES
1995 1994 1993
---- ---- ----
Separation Processes 26 28 27
Automated General Chemistry
for Clinical Diagnostics 41 40 40
Special Chemistry Applications
for Clinical Diagnostics 19 20 20
Synthesis and Sample Preparation/Handling
DNA Synthesizers
DNA synthesizers automate the process of making synthetic
oligonucleotides from organic chemicals. The Beckman Oligo
Series 1000 DNA Synthesizers include a single user one-column
system and a multi-user eight column system. Both systems reduce
the time required for synthesis and inform the user of synthesis
progress by providing reaction and reagents status throughout the
process. The Company recently introduced its UltraFAST synthesis
chemistry in a packaging which is also compatible with certain
competitive DNA synthesizers. Oligo systems sell in the $18,000
to $30,000 price range.
Robotic Workstations
The Biomek(R) automated laboratory workstations perform
complex operations involving liquids, including dispensing
measured samples, adding reagents, diluting, mixing and
transferring small volumes between reaction vessels. The
workstations handle multiple samples in parallel and may be
equipped with a photometer for detection purposes. The second
generation Biomek 2000 workstation that was introduced in 1994
includes an easy-to-use Windows*-based BioWorks(TM) operating
system that can be easily programmed to automate complex and
repetitive tasks, including sample preparation for DNA sequencing
and automated screening of chemical libraries for new
pharmaceutical drugs. These systems were well received by
customers in 1995. Biomek systems range in price from $35,000 to
over $80,000. (*Windows is a trademark of Microsoft
Corporation.)
Separation Processes
Centrifuges
Centrifuges separate liquid sample mixtures on the basis of
density (weight per unit volume) differences between the
mixture's components. Samples are put into tubes which are
placed in rotors and spun at speeds varying from a few thousand
to 120,000 revolutions per minute ("rpm"). The resulting
centrifugal forces, which can exceed 800,000 times the force of
gravity, cause sample components to separate according to their
density.
Centrifuges are used for the nondestructive separation of
protein and DNA fractions, cellular components and other
materials of interest in modern biology and biotechnology. In
addition to efficiency (low power consumption), reliability and
an environmentally friendly design (e.g., without freon) on many
models, Beckman centrifuges are distinguished from those of
competitors by the wide variety of unique rotor, tube and adapter
designs available to meet the precise needs of customer
applications, including the separation of blood cells from serum,
an important use in clinical diagnostic laboratories.
Beckman manufactures a broad line of centrifuges with
varying speed characteristics ranging from "low speed" (few
thousand rpm) to "high speed" (10,000 to 35,000 rpm) to
"ultracentrifuges" (35,000 to 120,000 rpm) and sample capacities
ranging from microliters (one millionth of a liter) to liters.
The Avanti(R) family of centrifuges being introduced by the
Company provides a revolutionary high-torque drive system which
accelerates and brakes in half the time of conventional high-
speed drives, thereby significantly reducing the time required to
process typical samples. Prices of the Company's centrifuges
vary from about $2,000 for a small low speed centrifuge to over
$50,000 for an ultracentrifuge and over $100,000 for an
analytical ultracentrifuge.
High Performance Liquid Chromatographs ("HPLC")
HPLC systems rely upon the difference in the rates of
passage of the components in a chemical mixture through a tubular
column filled with chemically active material. HPLC systems are
powerful separation devices for biologically active compounds,
since they are generally non-destructive, sensitive and capable
of resolving very complex mixtures of similar compounds. The
System Gold(R) Nouveau HPLC manufactured by Beckman is designed
to address the needs of the pharmaceutical, biotechnology, food,
beverage and agricultural industries as well as those of life
science researchers in academia. The system is modular, allowing
it to be configured for a wide range of applications. Beckman's
HPLC systems typically sell for $20,000 to $50,000.
Protein Sequencers
Beckman manufactures and sells protein sequencer systems and
related chemicals. Protein sequencing is used to determine the
primary structure, i.e., the amino acid sequence, of a protein.
Protein sequencer systems sell in the range of $90,000 to
$130,000.
Electrophoresis
Electrophoresis systems separate mixtures of proteins, DNA,
and other molecules principally on the basis of differences in
mass and electrical charge. The P/ACE(TM) capillary
electrophoresis product line represents a powerful extension of
electrophoresis technology by combining the discrimination power
of traditional electrophoresis with the speed of HPLC. With
several detection options, the result is an automated system for
high speed, high sensitivity separation of a wide variety of
compounds. In 1995 a new laser source for fluorescence detection
and several new chemistry kits were introduced by the Company to
expand the range of applications for capillary electrophoresis in
DNA, protein and pharmaceutical analysis. P/ACE systems typically
sell for $40,000 to $60,000.
Protein Separation and DNA Sequencing
In 1995 the Company formed a marketing and service alliance
with BioSepra Inc. (BioSepra), a biochromatography systems
manufacturer, which expands the Company's biotechnology product
line with systems that provide high speed, high resolution
separation of biomolecules. In addition, to further broaden
these product lines, the Company agreed to acquire over a three
year period Genomyx Corporation of Foster City, California.
Genomyx is a developer and manufacturer of advanced DNA
sequencing products and is expected to complement the Company's
biotechnology business.
Detection and Measurement
Spectrophotometer Systems
Spectrophotometers detect and measure the presence of
compounds in liquid mixtures by sensing the absorption of
specific wavelengths of light as that light passes through the
sample. Some Beckman spectrophotometers have the capability of
measuring changes in absorption during biological reactions.
These spectrophotometers, in conjunction with Beckman software,
automatically control the time, temperature and wavelength of the
measurement while computing and recording the results of the
experiment. In 1995, the DU 640B, a flexible and affordable bio-
spectrophotometer system, was introduced to address the specific
needs in molecular biology laboratories and biotechnology
companies. Depending on the specific model, accessories or
software, Beckman spectrophotometers sell in the $9,000 to
$25,000 range.
Nuclear Counters
Radioactive "labeling," which is the substitution or
addition of a radioactive atom into a compound of interest, is a
powerful and accepted method for tracing the path of a
biochemical in a living system. A labeled compound which is fed
to or injected into a test animal or plant can then be traced to
specific tissue or waste product by detecting the presence of the
radioactive label by scintillation counting. Beckman
manufactures scintillation counters that incorporate
sophisticated software and system features that combine accurate
measurement with user convenience. The systems sell in the
$16,000 to $30,000 range.
Data Processing
In addition to the software associated directly with
Beckman's instrument systems, the Company produces computer
software programs to aid in the data processing functions of
analytical laboratories. These systems control laboratory
instruments, direct data acquisition from the instruments, and
compute, store and report the results in formats needed for
internal purposes and satisfaction of regulatory requirements.
Beckman's data management systems are characterized by several
features, including the capability to operate on a variety of
manufacturers' computers and applications flexibility which lets
customers configure the system to meet their individual needs.
These systems vary greatly in cost depending upon the customer's
requirements, but typically range from $50,000 to $250,000.
Automated General Chemistry for Clinical Diagnostics
Automated general chemistry systems automatically detect and
quantify various chemical substances of clinical interest
(analytes) in human blood, urine and other body fluids. Beckman
offers several general chemistry systems with a range of
capabilities to meet specific customer requirements, principally
for use in medium to large hospital laboratories, but also with
some application in reference laboratories.
SYNCHRON(R) Systems
The Company's SYNCHRON(R) line of automated general
chemistry systems is a family of modular automated diagnostic
instruments and the reagents, standards and other consumable
products required to perform commonly requested diagnostic tests.
The SYNCHRON line was developed in response to changes in
reimbursement policies for hospital and clinical laboratories
that required them to be more efficient. The SYNCHRON systems
have been designed as compatible modules which may be used
independently or in various combinations with each other to meet
the specific needs of individual customers.
The smallest of these modules, the SYNCHRON CX(R)3 analyzer,
determines the concentration of eight of the most commonly
measured analytes. The SYNCHRON CX3 DELTA, introduced in 1994, is
an extension of the original CX(R)3 that adds computer enhanced
software features, including positive sample identification and
up to nine "on-board" chemistries.
The SYNCHRON CX4CE, CX5CE, and CX7 are computer enhanced
models offering bi-directional communications with laboratory
information systems. The SYNCHRON series was further extended in
1995 by the introduction of the SYNCHRON CX4 DELTA, CX5 DELTA and
CX7 DELTA. These models offer industry leading, innovative
software features to enhance laboratory productivity and a menu
of over 65 different types of tests. The extensive menu includes
immunoproteins, therapeutic drugs, drugs of abuse, and a complete
listing of general chemistries. SYNCHRON systems range in price
from $49,000 to $185,000 and are sold principally based on their
ability to improve laboratory efficiency.
Other Automated Clinical Chemistry Products
The Company has a stand alone electrolyte analyzer, the
SYNCHRON EL-ISE(R), that provides automated analysis of patient
electrolyte concentrations such as sodium, potassium, chloride,
calcium and lithium. Beckman also offers a family of low cost
instruments that perform glucose, blood urea nitrogen or
creatinine analysis.
Special Chemistry Applications For Clinical Diagnostics
Immunochemistry Systems
The Array(R) 360 Protein and Therapeutic Drug Monitoring
Systems combine automated instrumentation and advanced software
that significantly enhance the efficiency of protein and drug
analysis. The Array systems provide automated random access
testing which allows the operator to mix samples at random,
eliminating the need to analyze samples for the same analyte in
batches. At the customer's option, the systems can incorporate a
computer enhancement that allows automatic reading of bar-coded
sample tubes for positive sample identification and bi-
directional communication with the laboratory's information
system. Array systems sell in the $45,000 to $55,000 price
range.
In January 1996, the Company acquired Hybritech Incorporated
("Hybritech"), a San Diego based life sciences and diagnostics
company. This acquisition will expand the Company's capabilities
for the development and manufacture of high sensitivity
immunoassays, including cancer tests. Chief among these products
is a test for prostate specific antigen (PSA), utilized as an aid
in the detection (in conjunction with digital rectal examination)
and monitoring of prostate cancer. Currently this is the only
FDA approved test for such detection.
Electrophoresis For Clinical Diagnostics
The Appraise(R) densitometer and the Paragon(R)
Electrophoresis Systems allow the Company to offer a full range
of electrophoresis products that provide specialized protein
analysis for clinical laboratories. Paragon reagent kits are
used in the diagnosis of diabetes, cardiac, liver and other
diseases. The Appraise densitometer can be used in conjunction
with Paragon kits. It ranges in price from $17,000 to $24,000.
In 1995 the Company introduced the first capillary
electrophoresis system specifically designed for the clinical
laboratory, the Paragon CZE(TM) 2000. This system is designed to
fully automate the manual and somewhat tedious conventional
electrophoresis analysis of serum protein electrophoresis (SPE)
and immunofixation electrophoresis (IFE). Positioned to
complement the Paragon gels and the Appraise, the Paragon CZE
2000 is targeted at high volume electrophoresis labs worldwide.
Point of Care - Rapid Test Products
The Company also produces single use self-contained
diagnostic test kits for use in physicians' offices, clinics,
hospitals and other medical settings. The Hemoccult(R) product
line is used as an aid in screening for gastrointestinal disease,
most importantly colorectal cancer. In 1994 the Company
introduced the FlexSure(R) HP test kit, a test used as an aid in
the diagnosis of H.pylori infection which is associated with
several gastrointestinal diseases, including peptic ulcers and
gastric cancer. In addition, through its Hybritech acquisition,
the Company will offer the ICON(R) test kits featuring a high
sensitivity pregnancy test widely used by health care
practitioners.
Competition
The markets for the Company's products are highly
competitive, with hundreds of companies participating in one or
more portions of the market. There are a number of competitors
which sell both life sciences and diagnostic products, including
the Hitachi Ltd./ Boehringer Mannheim GmbH collaboration, Bio-Rad
Laboratories, Inc. and LKB Pharmacia AB. Additional competitors
focused more directly on life sciences include Hewlett-Packard
Co., The Perkin-Elmer Corporation, and E.I. du Pont de Nemours &
Co. Inc. Additional competitors in the clinical laboratory
market include Abbott Laboratories, Hoechst Corporation (Behring
Diagnostics Division), Johnson & Johnson, Inc., Dade
International, Inc. and Bayer Diagnostics. Competitors include
divisions or subsidiaries of corporations with substantial
resources. In addition, the Company competes with several
companies that sell reagents for laboratory instruments that are
manufactured by Beckman and others.
The Company competes primarily on the basis of improved
laboratory productivity, product quality, product bundling to
meet multiple instrument needs, and technology, service and
price. Discounting is used as a competitive tool when necessary.
Management believes that its extensive installed instrument base
provides the Company with a competitive advantage in obtaining
both instrument and after-market follow-on business.
Research and Development
The Company's new products originate from four sources:
internal research and development ("R&D") programs; external
collaborative efforts with individuals in academic institutions
and technology companies; devices or techniques that are
generated in customers' laboratories; and business acquisitions.
The Company's R&D teams are skilled in optics, chemistry,
electronics, software, mechanical and other engineering
disciplines, in addition to a broad range of biological and
chemical sciences. Research studies are usually conducted in
conjunction with individuals in academic institutions or other
outside scientists. Development programs focus on production of
new generations of existing product lines, such as the
SYNCHRON(R) analyzers, as well as new product categories not
currently offered by the Company. Other areas of pursuit include
innovative approaches to immunochemistry, molecular biology,
advanced electrophoresis technologies, automated sample
processing and information technologies
The Company's R&D expenditures for fiscal years 1995, 1994,
and 1993 were $91.7 million, $91.5 million and $93.3 million,
respectively. Management intends to maintain the present level
of the Company's investment in R&D spending.
Sales and Service
The Company has sales in over 120 countries and maintains
its own marketing, service and sales forces throughout the world.
While nearly all of the Company's products are distributed by
Beckman sales groups, the Company employs independent
distributors to serve those markets that are more efficiently
reached through such channels. The Company operates a European
Administration Center (EAC) in Nyon, Switzerland. In addition to
finance and administrative services, the EAC provides certain
sales and customer service administrative support to the
Company's subsidiaries located in Europe.
Beckman's sales force is technically educated and trained in
the operation and application of the Company's products. The
sales force is supported by a staff of scientists and technical
specialists in each product line and in each major scientific
discipline served by the Company's products.
In addition to direct sales of its instruments, the Company
leases certain instruments, principally those sold for clinical
diagnostic applications in hospitals. Beckman provides accessory
products, consumables and service for its instruments worldwide.
Service offices and inventory depots are associated with sales
offices, subsidiaries and dealer locations. The Company
considers its reputation for service responsiveness and
competence to be an important competitive asset.
Patents and Trademarks
To complement and protect the innovations created by the
Company's R&D efforts, the Company has an active patent
protection program which includes nearly 500 active U.S. patents
and patent applications. The Company also files important
corresponding applications in principal foreign countries. The
Company has taken an aggressive posture in protecting its patent
rights; however, no one patent is considered essential to the
success of the business.
The Company's primary trademark is "Beckman", with the trade
name also being Beckman or Beckman Instruments, Inc. The Company
vigorously protects its primary trademark, which is used on the
Company's products and is recognized throughout the worldwide
scientific and diagnostic community. The Company owns and uses
secondary trademarks on various products, but none of these
secondary trademarks is considered of primary importance to the
business.
Government Regulations
Certain of the Company's products are subject to regulations
of the U.S. Food and Drug Administration (the "FDA") which
require such products to be manufactured in accordance with "good
manufacturing practices". Such laws and regulations also require
that such products be safe and effective and that the labeling of
those products conform with specific requirements. Testing is
conducted to demonstrate performance claims and to provide other
necessary assurances. Clinical systems and reagents must be
reviewed by the FDA before sale and, in some instances, are
subject to product standards, other special controls or a formal
FDA premarket approval process. New federal regulations under
the Clinical Laboratory Improvement Amendments of 1988 will
require FDA review and approval of quality assurance protocols
for the Company's clinical reagent products. Originally
scheduled for implementation in 1994, implementation is now
scheduled for September, 1996. While adding to the overall
regulatory review process, this is not expected to materially
affect the sale of the Company's products. Certain of the
Company's products are subject to comparable regulations in other
countries as well.
In January 1993 the member states of the European Union (EU)
began implementation of their plan for a new unified EU market
with reduced trade barriers and harmonized regulations. The EU
adopted a significant international quality standard, the
International Organization for Standardization Series 9000
Quality Standards ("ISO 9000"). The Company's manufacturing
operations in its Brea, Carlsbad, Fullerton, Palo Alto
Porterville and San Jose, California; Allendale, New Jersey;
Sharon Hill, Pennsylvania; Naguabo, Puerto Rico and Galway,
Ireland facilities have been certified as complying with the
requirements of ISO 9000. Many of the Company's international
sales subsidiaries have also been certified, including those
located in Australia, Austria, Canada, France, Germany, Italy,
The Netherlands, Poland, Singapore, South Africa, Spain, Sweden,
Switzerland and the United Kingdom.
The design of the Company's products and the potential
market for their use may be directly or indirectly affected by
U.S. and foreign regulations concerning reimbursement for
clinical testing services. The configuration of new products,
such as the SYNCHRON(R) series of clinical analyzers, reflects
the Company's response to the changes in hospital capital
spending patterns such as those engendered by the Medicare
Diagnostic Related Groups ("DRGs"). Under the DRG system, a
hospital is reimbursed a fixed sum for the services rendered in
treating a patient, regardless of the actual cost of the services
provided.
Prior to the U.S. Government fiscal year which began October
1, 1991, inpatient capital costs incurred by a hospital were an
exception to the DRG system and were reimbursed, to the extent of
Medicare utilization, through a supplement to the DRG payment
known as "capital cost pass-through." Effective October 1, 1991,
the capital cost payment provisions of the Medicare Prospective
Payment System were changed to provide for the transition from a
"pass-through" payment methodology to a "prospective DRG based
capital payment" methodology for all inpatient capital related
costs incurred by a hospital.
Under this new payment methodology, "low capital costs"
hospitals are expected to receive greater capital payments from
Medicare than they would have had they remained under the prior
capital payment system. "High capital costs" hospitals are paid
under a "hold harmless" payment methodology which assures the
hospital of certain minimum payment levels for historical capital
costs and new capital costs during the ten year transition period
to a "fully prospective" payment system for inpatient capital
costs.
To date, the Company has not experienced, and does not
expect to experience in the future, any material financial impact
from the change in Medicare's payment for inpatient capital
costs.
The current health care reform efforts in the United States
and in some foreign countries are expected to further alter the
methods and financial aspects of doing business in the health
care field. The Company is closely following these developments
so that it may position itself to take advantage of them.
However, the Company cannot predict the effect on its business of
these reforms should they occur nor of any other future
government regulation.
Environmental Matters
The Company is subject to federal, state, local and foreign
environmental laws and regulations. The Company believes that
its operations comply in all material respects with applicable
federal, state, and local environmental laws and regulations.
Although the Company continues to make expenditures for
environmental protection, it does not anticipate any significant
expenditures in order to comply with such laws and regulations
which would have a material impact on the Company's operations or
financial position.
In 1983 the Company discovered organic chemicals in the
groundwater near a waste storage pond at a Company facility in
Porterville, California. SmithKline Beckman, the Company's
former controlling stockholder, agreed to indemnify the Company
with respect to this matter for any costs incurred by the Company
in excess of applicable insurance, eliminating any impact on the
Company's earnings or financial position. SmithKline Beecham
p.l.c., the surviving entity of the 1989 merger between
SmithKline Beckman and Beecham, assumed the obligations of
SmithKline Beckman in this respect.
In 1984 the Company sold approximately 40 acres of land in
Irvine, California to The Prudential Insurance Company of America
("Prudential"). In 1988 the Company was sued by Prudential in
U.S. District Court in California for recovery of costs and other
alleged damages with respect to soil and groundwater
contamination allegedly caused by operations on the property. In
1990 the Company entered into an agreement with Prudential for
settlement of the lawsuit and for sharing current and future
costs of investigation, remediation and other claims. Prudential
sold the property to Mola Development Corporation ("Mola") which
subsequently sold a portion of the property to F.C. Irvine, Inc.,
each local property developers. This resulted in additional
litigation against the Company and Prudential. See "Legal
Proceedings" herein. Prudential subsequently reacquired the
portion of the property owned by Mola.
Investigations conducted on the property determined that
soil and groundwater remediation is required and such remediation
is underway. During 1994 the County formally acknowledged
completion of remediation of a major portion of the soil,
although there remain other areas of soil contamination that
require further remediation. The Company and Prudential
continued to operate a groundwater treatment system throughout
1995. The Company believes that it has established adequate
reserves for remediation of any remaining soil contamination,
operation and maintenance of the groundwater treatment system and
any necessary additional groundwater investigations.
Investigations on the property are continuing and there can
be no assurance that further investigation will not reveal
additional contamination or result in additional costs. The
Company believes that additional remediation costs, if any,
beyond those already provided for the contamination discovered by
the current investigations will not have a material adverse
effect on the Company's operations or financial position.
Employee Relations
The Company and its subsidiaries presently employ
approximately 5,700 persons throughout the world, including
approximately 4,100 in the United States. The Company considers
that its relations with its employees are generally good.
Geographic Area Information
Information with respect to the above-captioned item is
incorporated by reference to Note 13 Business Segment Information
of the Company's Annual Report to Stockholders for the year ended
December 31, 1995.
Item 2. Properties
The Company's primary instrument assembly and manufacturing
facilities are located in Fullerton, Brea, and Palo Alto,
California. Central manufacturing support facilities for parts
and electronic subassemblies are located in Porterville,
California. An additional manufacturing facility is located in
Galway, Ireland. Reagents are manufactured in Carlsbad, San Diego
and San Jose, California, Naguabo, Puerto Rico, and Galway,
Ireland. The Company's computer software products business is
located in Allendale, New Jersey. The Company's facility for the
production of Hemoccult(R) test kits and related products is
located in Sharon Hill, Pennsylvania.
All U.S. manufacturing facilities, including land and
buildings, are owned by the Company with the exception of
Allendale, San Diego, San Jose and Sharon Hill which are leased
facilities, and Palo Alto, where the Company has built and owns
its buildings on a long-term land lease expiring in 2054. All
manufacturing facilities outside the U.S. are leased. The
central production facilities for the Company also include
plastics fabrication and machine shop capabilities in Fullerton
to serve the entire Company. This facility, in conjunction with
electronic subassembly work done in Porterville, supplies the
primary parts and subassemblies for the instrument systems to the
various instrument assembly locations in California. The
Company's principal distribution locations are in Brea and
Fullerton, California, Somerset, New Jersey, Frankfurt, Germany
and Paris, France. In 1994 the Company established a European
Administration Center at a facility in Nyon, Switzerland.
The Company believes that its production facilities meet
applicable government environmental, health and safety
regulations, and industry standards for maintenance, and that its
facilities in general are adequate for its current business.
Item 3. Legal Proceedings
As previously reported, in 1995 a lawsuit was filed against
the Company in the Superior Court of Orange County, California by
two of its former employees alleging breach of contract relating
to the commercial development of certain technology (Cercek v.
Beckman Instruments, Inc.). The plaintiffs seek monetary damages
of not less than $150 million and a declaratory judgment
terminating certain exclusive licenses entered into between the
plaintiffs and the Company. The Company believes that the
plaintiffs' claims are without merit and that the Company has
good and sufficient defenses to each such claim. The Company has
retained counsel to defend it and discovery is in progress. The
Company does not believe that any liability resulting from this
lawsuit will have a material adverse effect on its operations or
financial position.
Through its Hybritech acquisition the Company obtained a
patent, referred to as the Tandem Patent, that covers most of
Hybritech's important products and generates significant royalty
income. The Tandem Patent is involved in an interference action
in the U.S. Patent and Trademark Office with a patent application
owned by La Jolla Cancer Research Foundation (the "Foundation").
If the Foundation wins the interference, the Company would lose
the Tandem Patent and the royalty income, and a new patent would
issue to the Foundation covering those products. The Company
believes it has the stronger case and will prevail and does not
expect this matter to have a material adverse effect on its
operations or financial position.
As previously reported, in 1991 Forest City Properties
Corporation and F.C. Irvine, Inc. (collectively, "Forest City"),
current owners and developers of a portion of the same real
property in Irvine referred to under the caption "Environmental
Matters" herein, filed suit against Prudential in the California
Superior Court for the County of Los Angeles, alleging breach of
contract and damages caused by the pollution of the property.
Forest City originally sought damages of more than $20 million
but subsequently increased its demand to $40 million. Forest
City also seeks additional remediation of the property. Although
the Company is not a named defendant in the Forest City action,
it is obligated to contribute to any resolution of that action
pursuant to the Company's 1990 settlement agreement with
Prudential. See "Environmental Matters" herein.
The trial of this matter was conducted in 1995, resulting in
a jury verdict in favor of Prudential. The Court subsequently
granted Forest City's motion for a new trial which Prudential has
appealed. The appeal is not expected to be heard for
approximately two years because of the appellate court's backlog.
Although the outcome of this litigation cannot be predicted with
certainty, the Company believes that any additional liability
beyond that provided for will not have a material adverse effect
on the Company's operations or financial position.
As previously reported, in September 1994 Prudential, Forest
City and a number of other defendants, not including the Company,
were sued by one of the tenants of the apartment houses built by
Forest City on the above mentioned property in Irvine,
California. The complaint, filed in the California Superior Court
for the County of Orange as Etezadi v. Prudential Insurance
Company, et. al., seeks damages for alleged personal injury,
emotional distress, lost earnings, and medical expenses, as well
as punitive and other damages (no dollar amount is specified) in
connection with alleged soil and groundwater contamination of the
Irvine property. Although the Company is not a named defendant
at this time, the Company is obligated to contribute to any
resolution of this lawsuit. The Company believes that any
liability resulting from this lawsuit will not have a material
adverse effect on the Company's operations or financial position.
As previously reported, since 1992 five toxic tort lawsuits*
have been filed in Maricopa County Superior Court, Arizona by a
number of residents of the Phoenix/Scottsdale area against the
Company and a number of other defendants, including Motorola,
Inc., Siemens Corporation, the cities of Phoenix and Scottsdale,
and others. The lawsuits seek damages for alleged personal
injury, emotional distress, lost earnings and medical expenses,
as well as punitive and other damages (no dollar amount is
specified) in connection with alleged groundwater contamination
in an area in Scottsdale, Arizona close to a former Company
manufacturing facility. The Company is indemnified by SmithKline
Beecham p.l.c., the successor of its former controlling
stockholder, for any costs incurred in these matters in excess of
applicable insurance, and thus the outcome of these litigations,
even if unfavorable to the Company, should have no material
effect on the Company's operations or financial position.
* Baker v. Motorola, Inc. et al (filed February 1992), Lofgren
v. Motorola, Inc. et al (filed April 1993), Betancourt v.
Motorola, Inc. et al (filed July 1993), Ford v. Motorola, Inc. et
al (filed June 1994), and Wilkins v. Motorola, Inc., et. al.
(filed July 1995).
These suits are currently in the discovery phase. Trial has
been set for January, 1998 for the four cases that do not include
class action claims which have been consolidated. No trial date
has been set for the remaining case (Baker v. Motorola, Inc.)
that does include class action claims. The Company is vigorously
defending all of the suits, which it believes are without merit.
As previously reported, the public prosecutor in Palermo
(Sicily), Italy is investigating the activities of officials at a
local government hospital and laboratory as well as
representatives of the principal worldwide companies marketing
diagnostic equipment in Palermo, including the Company's Italian
subsidiary (the "Subsidiary"). The inquiry focuses on past
leasing practices for placement of diagnostic equipment which
were common industry-wide practices throughout Italy, but now are
alleged to be improper.
The prosecutor recently revealed the evidence from his
investigation which he alleges supports formal charges against
one present and two former employees of the Subsidiary. The
Company believes this evidence to be weak and insufficient to
support a criminal conviction. Court hearings were scheduled for
mid February 1996 to allow the prosecutor to present evidence of
improper conduct in order to persuade the Court to hold a trial.
The results of those hearings were not available at the time this
report was prepared. Although it is very difficult to evaluate
the political climate in Italy and the activities of the Italian
public prosecutors, the Company does not expect this matter to
have a material adverse effect on its operations or financial
position.
In addition, the Company and its subsidiaries are involved
in a number of lawsuits which the Company considers ordinary and
routine in view of its size and the nature of its business. The
Company does not believe that any ultimate liability resulting
from any such lawsuits will have a material adverse effect on the
operations or financial position of the Company. See also
"Environmental Matters" herein.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of stockholders during
the fourth quarter of the fiscal year covered by this report.
Executive Officers of the Company
The following is a list of the executive officers of the
Company as of February 7, 1996, showing their ages, present
positions and offices with the Company and their business
experience during the past five or more years. Officers are
elected by the Board of Directors and serve until the next annual
Organization Meeting of the Board. Officers may be removed by
the Board at will. There are no family relationships among any
of the named individuals, and no individual was selected as an
officer pursuant to any arrangement or understanding with any
other person.
Louis T. Rosso, 62, Chairman Mr. Rosso has been Chief
of the Board and Chief Executive Officer of the
Executive Officer Company since 1988 and
Chairman of the Board since
1989. He served as the
Company's President from 1982
until 1993. He also served as
a Vice President of SmithKline
Beckman from 1982 to 1989.
Mr. Rosso first joined the
Company in 1959 and was named
Corporate Vice President in
1974. He is a director of
Allergan, Inc. and American
Health Properties, Inc. He is
a member of the Board of
Trustees of St. Jude Heritage
Foundation in Fullerton,
California and of Harvey Mudd
College. Mr. Rosso has been a
director of the Company since
1988.
John P. Wareham, 54, Director, Mr. Wareham has been President
President, and Chief Operating and Chief Operating Officer of
Officer the Company since 1993. He
served as the Company's Vice
President, Diagnostic Systems
Group from 1984 to 1993. Prior
thereto, he had been President
of Norden Laboratories, Inc.,
a wholly owned subsidiary of
SmithKline Beckman engaged in
developing, manufacturing and
marketing pharmaceutical and
veterinary vaccines. Mr.
Wareham first joined
SmithKline Corporation, a
predecessor of SmithKline
Beckman, in 1968. He is a
director of the Little Rapids
Corporation and the Health
Industry Manufacturers
Association. Mr. Wareham has
been a director of the Company
since 1993.
Dennis K. Wilson, 60, Vice Mr. Wilson has been Vice
President, Finance and Chief President, Finance and Chief
Financial Officer Financial Officer of the
Company since 1993. He served
as Vice President, Treasurer
of the Company from 1989 until
his current appointment.
Prior thereto he had been Vice
President, Corporate
Accounting and Assistant
Controller of SmithKline
Beckman since 1984. Mr. Wilson
first joined the Company in
1969.
James T. Glover, 45, Vice Mr. Glover has been Vice
President and Controller President and Controller of
the Company since 1993. From
1989 until assuming his
current position, he was Vice
President, Controller -
Diagnostic Systems Group. Mr.
Glover joined the Company in
1983, serving in several
management positions,
including a two-year term at
Allergan, Inc., then a Company
affiliate. Prior to 1983, he
held management positions with
KPMG Peat Marwick and another
Fortune 500 Company.
Fidencio Mares, 49, Vice Mr. Mares was named Vice
President, Human Resources President, Human Resources of
the Company effective May 16,
1995. Prior thereto he had
been President of The Gas
Company of Hawaii. Before
that he was Senior Vice
president of Administration
and Human Resources for
Pacific Resources, Inc.,
Corporate Wage and Salary
manager and Corporate Human
Resources Services manager for
Getty Oil Company/Texaco,
Inc., and held various human
resources managerial positions
at Southern California Edison.
William H. May, 53, Vice Mr. May has been General
President, General Counsel and Counsel and Secretary of the
Secretary Company since 1984 and has
been Vice President, General
Counsel and Secretary of the
Company since 1985. Mr. May
first joined the Company in
1976.
Bruce A. Tatarian, 47, Vice Mr. Tatarian was named Vice
President, Field Operations - President, Field operations -
Emerging Markets Emerging Markets of the
Company effective May 1, 1995.
He had been Vice President,
Bio-research Commercial
Operations International of
the Company since 1994. Prior
thereto, he had been Vice
President, Marketing
Operations for the
Bioanalytical Systems Group
since 1991. From 1990 to 1991
he had been Vice President -
Manager, Analytical Business
Unit. Mr. Tatarian originally
joined the Company in 1973
when he served in a number of
marketing positions for a
period of ten years.
Arthur A. Torrellas, 65, Vice Mr. Torrellas was named Vice
President, Field Operations - President, Field Operations -
North America/Europe North America/Europe, of the
Company effective May 1, 1995.
He had been Vice President,
Diagnostic Commercial
Operations of the Company
since 1994. Prior thereto, he
had been Vice President,
International Operations for
the Diagnostic Systems Group
since 1985. Mr. Torrellas
first joined the Company in
1977.
Albert R. Ziegler, 57, Vice Mr. Ziegler has been Vice
President, Diagnostics President, Diagnostics
Development Center Development Center of the
Company since 1994. He joined
the Company in 1986 as Vice
President, North America
Operations for the Diagnostic
Systems Group. Prior thereto
he had been President of
Branson Ultrasonics
Corporation, a manufacturer of
industrial ultrasound
instruments and a subsidiary
of SmithKline Beckman until
the divestiture of SmithKline
Beckman's industrial
instruments businesses in
1984. Mr. Ziegler first
joined SmithKline Beckman in
1971.
Paul Glyer, 39, Treasurer Mr. Glyer has been Treasurer
of the Company since 1993.
Effective May, 1995 he
additionally assumed the
position of Director,
Corporate Business
Development. He served as
Assistant Treasurer since 1989
when he first joined the
Company.
Michael T. O'Neill, 55, Senior Mr. O'Neill served as Senior
Vice President, Commercial Vice President, Commercial
Operations Operations of the Company from
1993 until April 1995 when he
left the Company to pursue
personal interests. He had
been Vice President,
Bioanalytical Systems Group
since 1989. Mr. O'Neill first
joined the Company in 1973.
Richard K. Sears, 63, Vice Mr. Sears served as Vice
President, Human Resources President, Human Resources of
the Company from 1990 until
June 30, 1995 when he retired.
Mr. Sears originally joined
the Company in 1955 when he
served in a number of
administrative and management
positions for a period of 14
years.
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters
Information with respect to the above-captioned Item is
incorporated herein by reference to the sections entitled "Stock
Exchanges and Prices" and "Dividends" of the Company's Annual
Report to stockholders for the year ended December 31, 1995.
During 1995 the Company paid four consecutive quarterly dividends
of $.11 per share of common stock, for a total of $.44 per share
for the year. During 1994 the Company paid four consecutive
quarterly dividends of $.10 per share of common stock, for a
total of $.40 per share for the year. Information with respect to
dividend restrictions is incorporated by reference to Note 6 Debt
of the "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" of the
Company's Annual Report to Stockholders for the year ended
December 31, 1995. In addition, as of January 26, 1996, there
were approximately 9,373 holders of record of the Company's
common stock.
Item 6. Selected Financial Data
Information with respect to the above-captioned Item is
incorporated herein by reference to the section entitled "Five-
Year Financial and Statistical Data" of the Company's Annual
Report to Stockholders for the year ended December 31, 1995.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Information with respect to the above-captioned Item is
incorporated herein by reference to the section entitled
"FINANCIAL REVIEW" of the Company's Annual Report to Stockholders
for the year ended December 31, 1995.
Item 8. Financial Statements and Supplementary Data
Information with respect to the above-captioned Item is
incorporated herein by reference to the consolidated financial
statements, including all the notes thereto, and the sections
entitled "REPORT BY MANAGEMENT", "INDEPENDENT AUDITORS' REPORT"
and "QUARTERLY DATA (Unaudited)" of the Company's Annual Report
to Stockholders for the year ended December 31, 1995.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors - The information with respect to directors
required by this Item is incorporated herein by reference to
those parts of the Company's Proxy Statement for the Annual
Meeting of Stockholders to be held April 4, 1996 entitled
"ELECTION OF DIRECTORS" and "BOARD OF DIRECTORS INFORMATION."
Executive Officers - The information with respect to
executive officers required by this Item is set forth in Part I
of this report.
Item 11. Executive Compensation
The information with respect to executive compensation
required by this Item is incorporated by reference to that part
of the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held April 4, 1996 entitled "EXECUTIVE
COMPENSATION," excluding those sections entitled "Board
Compensation Committee Report on Executive Compensation" and
"Performance Graph."
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information with respect to security ownership required
by this Item is incorporated by reference to that part of the
Company's Proxy Statement for the Annual Meeting of Stockholders
to be held April 4, 1996 entitled "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT."
Item 13. Certain Relationships and Related Transactions
The information with respect to certain relationships and
related transactions required by this Item is incorporated by
reference to that part of the Company's Proxy Statement for the
Annual Meeting of Stockholders to be held April 4, 1996 entitled
"BOARD OF DIRECTORS INFORMATION, Compensation Committee
Interlocks and Insider Participation."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a)(1), (a)(2) Financial Statements and Financial Statement
Schedules
The financial statements and financial statement schedules
filed as part of the report are incorporated by reference in the
"INDEX OF FINANCIAL STATEMENTS AND SCHEDULES" following this Part
IV.
(a)(3) Exhibits
Management contracts and compensatory
plans or arrangements are identified by *.
3.1 Third Restated Certificate of
Incorporation of the Company, June 5, 1992
(incorporated by reference to Exhibit 3.1 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December 31, 1992, File No. 001-10109).
3.2 Amended and Restated By-Laws of the
Company, as of November 30, 1994 (incorporated by
reference to Exhibit 3.2 of the Company's Annual
Report to the Securities and Exchange Commission
on form 10-K for the fiscal year ended December
31, 1994, File No. 001-10109).
4.1 Specimen Certificate of Common Stock
(incorporated by reference to Exhibit 4.1 of
Amendment No. 1 to the Company's Form S-1
registration statement, File No. 33-24572).
4.2 Rights Agreement between the Company and
Morgan Shareholder Services Trust Company, as
Rights Agent, dated as of March 28, 1989
(incorporated by reference to Exhibit 4 of the
Company's current report on Form 8-K filed with
the Securities and Exchange Commission on April
25, 1989, File No. 1-10109).
4.3 First amendment to the Rights Agreement
dated as of March 28, 1989 between the Company and
First Chicago Trust Company of New York (formerly
Morgan Shareholder Services Trust Company), as
Rights Agent, dated as of June 24, 1992
(incorporated by reference to Exhibit 1 of the
Company's current report on Form 8-K filed with
the Securities and Exchange Commission on July 2,
1992, File No. 001-10109).
4.4 Amendment 1993-1 to the Company's
Savings and Investment Plan, adopted November 3,
1993, filed in connection with the Form S-8
Registration Statement filed with the Securities
and Exchange Commission on September 1, 1992, File
No. 33-51506 (incorporated by reference to Exhibit
4 of the Company's Quarterly Report to the
Securities and Exchange Commission on Form 10-Q
for the quarterly period ended March 31, 1994,
File No. 001-10109).
4.5 Amendment 1995-1 to the Company's
Savings and Investment Plan, adopted December 20,
1995, filed in connection with the Form S-8
Registration Statement filed with the Securities
and Exchange Commission on September 1, 1992 and
Amendment No. 1 thereto filed December 17, 1992,
File No. 33-51506.
10.1 Revolving Credit Agreement, dated as of
September 26, 1994, among the Company, the lenders
named therein and Citicorp USA, Inc. as Agent
(incorporated by reference to Exhibit 10.1 of the
Company's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarterly
period ended September 30, 1994, File No. 001-
10109).
10.2 Note Agreement, dated as of February 5,
1993, among the Company, Nationwide Life Insurance
Company and three other insurance companies named
therein (incorporated by reference to Exhibit
10.17 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1992, File
No. 001-10109).
10.3 Line of Credit Promissory Note in favor
of Mellon Bank, N.A., dated as of October 6, 1993
(incorporated by reference to Exhibit 10.21 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December 31, 1992, File No. 001-10109).
10.4 Loan Agreement (Multiple Advance), dated
September 30, 1993, between Beckman Instruments
(Japan) Limited and the Industrial Bank of Japan,
Limited (English translation, including
certification as to accuracy; original document
executed in Japanese) (incorporated by reference
to Exhibit 10.21 of the Company's Annual Report to
the Securities and Exchange Commission on Form 10-
K for the fiscal year ended December 31, 1993,
File No. 001-10109).
10.5 Term Loan Agreement, dated as of
September 30, 1993, between Beckman Instruments
(Japan) Limited and Citibank, N.A., Tokyo Branch
(incorporated by reference to Exhibit 10.22 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December 31, 1993, File No. 001-10109).
10.6 Term Loan Agreement, dated as of
December 9, 1993, between Beckman Instruments
(Japan) Limited and The Dai-Ichi Kangyo Bank
Limited (English translation, including
certification as to accuracy; original document
executed in Japanese) (incorporated by reference
to Exhibit 10.23 of the Company's Annual Report to
the Securities and Exchange Commission on Form 10-
K for the fiscal year ended December 31, 1993,
File No. 001-10109).
10.7 Trust Agreement between the Company and
The First National Bank of Chicago, as Trustee,
for the benefit of Participating Employees, dated
as of May 31, 1995.
* 10.8 The Company's Executive Incentive Plan,
adopted by the Company in 1995 (incorporated by
reference to Exhibit 10.1 of the Company's
Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarterly period
ended June 30, 1995, File No. 001-10109).
* 10.9 The Company's Executive Incentive Plan,
adopted by the Company in 1994 (incorporated by
reference to Exhibit 10 of the Company's Quarterly
Report to the Securities and Exchange Commission
on Form 10-Q for the quarterly period ended June
30, 1994, File No. 001-10109).
* 10.10 Supplement to the Company's Executive
Incentive Plan, adopted by the Company in 1994:
Company Memorandum, FY 94 Incentive Plans, May 11,
1994 (incorporated by reference to Exhibit 10.2 of
the Company's Quarterly Report to the Securities
and Exchange Commission on Form 10-Q for the
quarterly period ended September 30, 1994, File
No. 001-10109).
* 10.11 The Company's Executive Bonus Plan,
adopted by the Company in 1993 (incorporated by
reference to Exhibit 10.15 of the Company's Annual
Report to the Securities and Exchange Commission
on Form 10-K for the fiscal year ended December
31, 1993, File No. 001-10109).
* 10.12 The Company's Incentive Compensation
Plan of 1990, as restated with amendments of
January 29, 1992, amendments approved by
stockholders May 6, 1992 (incorporated by
reference to Exhibit 10.20 of the Company's Annual
Report to the Securities and Exchange Commission
on Form 10-K for the fiscal year ended December
31, 1992, File No. 001-10109).
* 10.13 The Company's Incentive Compensation
Plan, as amended by the Company's Board of
Directors on October 26, 1988 and as amended and
restated by the Company's Board of Directors on
March 28, 1989 (incorporated by reference to
Exhibit 10.16 of the Company's Annual Report to
the Securities and Exchange Commission on Form
10-K for the fiscal year ended December, 31 1989,
File No. 001-10109).
* 10.14 Restricted Stock Agreement and Election
(Cycle Two - Economic Value Added Incentive Plan),
adopted by the Company in 1995 (incorporated by
reference to Exhibit 10 of the Company's Quarterly
Report to the Securities and Exchange Commission
on Form 10-Q for the quarterly period ended
September 30, 1995, File No. 001-10109).
* 10.15 Beckman Instruments, Inc. Supplemental
Pension Plan, adopted by the Company October 24,
1990 (incorporated by reference to Exhibit 10.4 of
the Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December, 31 1990, File No. 001-10109).
* 10.16 The Company's Stock Option Plan for
Non-Employee Directors, as restated with
amendments of January 29, 1992, amendments
approved by stockholders May 6, 1992 (incorporated
by reference to Exhibit 10.19 of the Company's
Annual Report to the Securities and Exchange
Commission on Form 10-K for the fiscal year ended
December 31, 1992, File No. 001-10109).
* 10.17 Form of Restricted Stock Agreement,
dated as of September 16, 1991, between the
Company, each of its Executive Officers and
certain other key employees (incorporated by
reference to Exhibit 10.19 of the Company's Annual
Report to the Securities and Exchange Commission
on Form 10-K for the fiscal year ended December
31, 1991, File No. 001-10109).
* 10.18 Form of Legended Stock Agreement and
Election For Deferral of a Portion of the FY 93
Executive Bonus Plan, between the Company and some
of its Executive Officers and other key employees
(incorporated by reference to Exhibit 10.20 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December 31, 1993, File No. 001-10109).
* 10.19 Form of Change in Control Agreement,
dated as of May 1, 1989, between the Company, each
of its Executive Officers and certain other key
employees (incorporated by reference to Exhibit
10.34 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1989, File
No. 001-10109).
* 10.20 Agreement Regarding Retirement Benefits
of Arthur A. Torrellas, adopted December 1, 1993
and dated December 20, 1993, between the Company
and Arthur A. Torrellas (incorporated by reference
to Exhibit 10.24 of the Company's Annual Report to
the Securities and Exchange Commission on Form 10-
K for the fiscal year ended December 31, 1993,
File No. 001-10109).
* 10.21 Amendment to the December 1, 1993
Agreement Regarding Retirement Benefits of Arthur
A. Torrellas, dated as of May 30, 1995, between
the Company and Arthur A. Torrellas (incorporated
by reference to Exhibit 10.2 of the Company's
Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarterly period
ended June 30, 1995, File No. 001-10109).
* 10.22 Agreement Regarding Retirement Benefits
of Albert Ziegler, dated June 16, 1995, between
the Company and Albert Ziegler.
* 10.23 Beckman Instruments, Inc. Deferred
Directors' Fee Program, adopted by the Company
November 30, 1994 (incorporated by reference to
Exhibit 10.21 of the Company's Annual Report to
the Securities and Exchange Commission of form 10-
K for the fiscal year ended December 31, 1994,
File No. 001-10109).
10.24 Distribution Agreement, dated as of
April 11, 1989, among SmithKline Beckman
Corporation the Company and Allergan, Inc.
(incorporated by reference to Exhibit 3 to
SmithKline Beckman Corporation's Current Report on
Form 8-K filed with the Securities and Exchange
Commission on April 14, 1989, File No. 1-4077).
10.25 Amendment to the Distribution Agreement
effective as of June 1, 1989 between SmithKline
Beckman Corporation, the Company and Allergan,
Inc. (incorporated by reference to Exhibit 10.26
of Amendment No. 2 to the Company's Form S-1
registration statement, File No. 33-28853).
10.26 Cross-Indemnification Agreement between
the Company and SmithKline Beckman Corporation
(incorporated by reference to Exhibit 10.1 of
Amendment No. 1 to the Company's Form S-1
registration statement, File No. 33-24572).
10.27 Tax Agreement, dated as of April 11,
1989, between SmithKline Beckman Corporation and
the Company (incorporated by reference to Exhibit
4 to SmithKline Beckman Corporation's Current
Report on Form 8-K filed with the Securities and
Exchange Commission on April 14, 1989, File No.
1-4077).
10.28 Tax Sharing Agreement between the
Company and SmithKline Beckman Corporation
(incorporated by reference to Exhibit 10.2 of
Amendment No. 1 to the Company's Form S-1
registration statement, File No. 33-24572).
11. Statement regarding computation of
per share earnings: This information is
incorporated by reference to Note 1 Summary of
Significant Accounting Policies of the Company's
Annual Report to Stockholders for the year ended
December 31, 1995.
13. WORDS ON NUMBERS Section of the Company's
Annual Report to Stockholders for the year ended
December 31, 1995.
21. Subsidiaries
24. Consent of KPMG Peat Marwick LLP,
February 8, 1996.
27. Financial Data Schedule.
(b) Reports on Form 8-K During Fourth Quarter ended
December 31, 1995.
No Reports on Form 8-K were filed during the quarter ended
December 31, 1995.
Beckman Instruments, Inc.
INDEX TO
FINANCIAL STATEMENTS AND SCHEDULES
The consolidated financial statements of the Company and the
related report of KPMG Peat Marwick LLP, dated January 19, 1996
are incorporated by reference to the section entitled "WORDS ON
NUMBERS" of the Company's Annual Report to Stockholders for the
year ended December 31, 1995.
The information required to be reported in the Supplementary
Financial Schedule entitled, VIII Allowance for Doubtful
Accounts, for the three year period ended December 31, 1995 is
set forth in Note 14 Supplementary Information of the "NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS" of the Company's Annual Report
to Stockholders for the year ended December 31, 1995. Schedules
not included herein have been omitted because they are not
applicable, are no longer required or the required information is
presented in the consolidated financial statements or in the
notes to the consolidated financial statements.
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.
BECKMAN INSTRUMENTS, INC.
Date: February 1, 1996 By LOUIS T. ROSSO
Louis T. Rosso
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board
and Chief Executive
Officer (Principal
LOUIS T. ROSSO Executive Officer)
Louis T. Rosso February 1, 1996
President,
Chief Operating Officer
JOHN P. WAREHAM and Director
John P. Wareham February 1, 1996
Vice President, Finance
and Chief Financial Officer
DENNIS K. WILSON (Principal Financial Officer)
Dennis K. Wilson February 1, 1996
Vice President and
Controller (Principal
JAMES T. GLOVER Accounting Officer)
James T. Glover February 1, 1996
EARNEST H. CLARK, JR. Director February 1, 1996
Earnest H. Clark, Jr.
CAROLYNE K. DAVIS Director February 1, 1996
Carolyne K. Davis, Ph.D.
DENNIS C, FILL Director February 1, 1996
Dennis C. Fill
GAVIN HERBERT Director February 1, 1996
Gavin S. Herbert
WILLIAM N. KELLEY Director February 1, 1996
William N. Kelley, M.D.
Director February , 1996
Francis P. Lucier
C. RODERICK O'NEIL Director February 1, 1996
C. Roderick O'Neil
DAVID S. TAPPAN, JR. Director February 1, 1996
David S. Tappan, Jr.
Director February , 1996
Henry Wendt
BETTY WOODS Director February 1, 1996
Betty Woods
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------- -------
4.5 Amendment 1995-1 to the Company's Savings
and Investment Plan, adopted December 20,
1995, filed in connection with the Form
S-8 Registration Statement filed with the
Securities and Exchange Commission on
September 1, 1992 and Amendment No. 1
thereto filed December 17, 1992, File
No. 33-51506.
10.7 Trust Agreement between the Company
and The First National Bank of Chicago,
as Trustee, for the benefit of
Participating Employees, dated as
of May 31, 1995.
10.22 Agreement Regarding Retirement
Benefits of Albert Ziegler, dated
June 16, 1995, between the Company
and Albert Ziegler.
13. WORDS ON NUMBERS Section of the Company's
Annual Report to Stockholders for the
year ended December 31, 1995.
21. Subsidiaries
24. Consent of KPMG Peat Marwick LLP,
February 8, 1996.
27. Financial Data Schedule.