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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, 1997
Commission File Number 001-10109
BECKMAN INSTRUMENTS, INC.
2500 Harbor Boulevard, Fullerton, California 92834
(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 X 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 X 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. ( )
Aggregate market value of voting stock held by non-affiliates of
the registrant as of January 26, 1998: $1,190,023,639.
Common Stock, $.10 par value, outstanding as of January 26, 1998:
28,460,954 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, 1997 Part I and Part II
Proxy Statement for the 1998 Annual
Meeting of Stockholders to be held on
April 2, 1998 Part III
BECKMAN INSTRUMENTS, INC.
PART I
Item 1. Business
Overview
Beckman Instruments, Inc. (including Coulter Corporation and
its subsidiaries ("Coulter") and all other subsidiaries of
Beckman Instruments, Inc., "the Company") is a world leader in
providing systems that simplify and automate laboratory
processes. The Company designs, manufactures and services a broad
range of laboratory systems consisting of instruments, reagents
and related products that customers use to conduct basic
scientific research, drug discovery research and diagnostic
analysis of patient samples. Approximately two-thirds of the
Company's 1997 sales were for clinical diagnostics applications,
principally in hospital laboratories, while the remaining sales
were for life sciences and drug discovery applications in
universities, medical schools, and pharmaceutical and
biotechnology companies. The Company's diagnostic systems
address over 75% of the hospital laboratory test volume,
including virtually all routine laboratory tests. The Company
believes that it is a worldwide market leader in its primary
markets, with well-recognized systems and a reputation for high-
quality, reliable service.
The Company's systems improve efficiency by integrating
customer laboratory operations. The design of these systems draws
upon the Company's extensive expertise in the chemical,
biological, engineering and software sciences. Products for the
clinical diagnostics (In Vitro diagnostics ("IVD")) market
consist of systems (analytical instruments, reagents, accessories
and software) that are used to detect, quantify and classify
various substances and cells of clinical interest in human blood
and other body fluids. Products for the life sciences market
include centrifuges, flow cytometers, high performance liquid
chromatographs, spectrophotometers, laboratory robotic
workstations, capillary electrophoresis systems, DNA sequencers
and synthesizers, and the reagents and supplies for their
operation. The Company has an installed base of approximately
75,000 systems in over 120 countries, which the Company believes
will provide a recurring stream of revenue and cash flows from
the sale of reagents, consumables and services after initial
placement of the system ("After Sales"). Approximately 67% of
the Company's 1997 sales were derived from After Sales, while the
remaining 33% were derived from the direct placement of systems.
On October 31, 1997, Beckman Instruments, Inc. (excluding
Coulter, "Beckman") acquired Coulter which became a wholly owned
subsidiary of Beckman. The acquisition of Coulter was a further
extension of the Company's strategy to solidify its position as a
leading provider of laboratory systems, adding Coulter's leading
market position in hematology and number two position in flow
cytometry. Coulter is the world's leading manufacturer of IVD
systems for blood cell analysis (hematology), with a market share
in hematology approximately twice that of its next largest
competitor.
Beckman and Coulter serve substantially the same customer
base but have essentially no overlap in their product offerings.
As a result, the Company expects to be able to enhance the
operating efficiency of the combined entities through cross-
selling and reduced operating costs. The Company intends to
capitalize on cross-selling opportunities primarily by marketing
Beckman's clinical chemistry products to existing Coulter
customers and marketing Coulter's hematology and flow cytometry
products to Beckman's existing customers.
Background
Beckman is one of the world's leading manufacturers of
analytical instrument systems and test kits, competing in the
clinical diagnostics and life sciences markets, with Company
sales for 1997 of $1.2 billion, approximately one-half from
outside the United States. Founded by Dr. Arnold O. Beckman in
1934, Beckman entered the laboratory market by introducing the
world's first pH meter. In 1997, the Company generated
approximately 67% of its sales through After Sales revenue from
an installed base of over 75,000 systems.
Beckman became a publicly-traded corporation in 1952. In
1968 Beckman expanded its laboratory instrument focus to include
healthcare applications in clinical diagnostics. Beckman was
acquired by SmithKline Corporation to form SmithKline Beckman
Corporation in 1982, and Beckman was operated as a subsidiary of
SmithKline Beckman until 1989 when it was divested. Since that
time, Beckman has operated as a fully independent, publicly-owned
company. Beckman's principal executive offices are located at
2500 Harbor Blvd., Fullerton, California 92834, and its telephone
number is (714) 871-4848.
Customers and Markets
The two primary markets which the Company serves are the
clinical diagnostics and life sciences markets. The Company's
clinical diagnostics customers include hospital clinical
laboratories, physicians' offices and group practices and
commercial reference laboratories (large central laboratories to
which hospitals and physicians refer tests); its life sciences
customers include universities conducting academic research,
medical research laboratories, pharmaceutical companies and
biotechnology firms. The Company's customers are continually
searching for processes and systems that can perform tests
faster, more efficiently and at lower costs. The Company
believes that its focus on automated and high throughput systems
position it to capitalize on this need.
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. By serving
several customer groups with differing needs related through
common science and technology, the Company has the opportunity to
broadly apply and leverage its expertise.
The clinical diagnostics and life sciences markets are each
highly competitive and the Company encounters significant
competition in each market from many manufacturers, both domestic
and outside the United States. These markets continue to be
unfavorably impacted by the economic weakness in Europe and Asia
and cost containment initiatives in several European governmental
and healthcare systems. The life sciences market also continues
to be affected by consolidation of pharmaceutical companies and
governmental constraints on research and development spending.
Attempts to lower costs and increase efficiencies have led to
consolidation among healthcare providers in the United States,
resulting in more powerful provider groups that leverage their
purchasing power with suppliers to contain costs. Preferred
supplier arrangements and combined purchases are becoming more
commonplace. Consequently, it has become essential for
manufacturers to provide cost-effective diagnostic systems to
remain competitive. In addition, consolidation has put pressure
on diagnostic equipment manufacturers to broaden their product
offerings to encompass a wider range of testing capability,
greater automation and higher volume capacity. Manufacturers
that have the ability to automate a wide variety of tests on
integrated workstations have a distinct competitive advantage.
Broad testing menus that include immunoassays and routine
chemistry tests are highly attractive to laboratories seeking to
reduce the number of vendors they utilize. Finally,
consolidation has made it increasingly important for suppliers to
deploy a highly focused salesforce that is able to execute
innovative marketing approaches and to maintain a reliable after-
sale service network.
The size and growth of the Company's markets are influenced
by a number of factors, including: 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; and healthcare spending and physician
practice. The Company expects worldwide healthcare expenditures
and diagnostic testing to increase over the long-term, primarily
as a result of the following three factors: (1) growing demand
for services generated by the aging of the world population, (2)
increasing expenditures on diseases requiring costly treatment
(for example, AIDS and cancer) and (3) expanding demand for
improved healthcare services in developing countries.
Products
Overview
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
application:
Clinical Diagnostics
Life Sciences Research and Drug Discovery
PRODUCT SALES AS A PERCENT OF TOTAL PRODUCT SALES
FOR CATEGORIES REPRESENTING
MORE THAN 10 PERCENT OF SALES
1997 1996 1995
---- ---- ----
Clinical Diagnostics 67 63 60
Life Sciences Research and Drug
Discovery 33 37 40
Clinical Diagnostics
The clinical diagnostics industry encompasses the study and
analysis of disease by means of laboratory evaluation and
analysis of bodily fluids and other substances from patients.
Due to its important role in the diagnosis and treatment of
patients, IVD testing is an integral part of overall patient
care. Additionally, IVD testing is increasingly valued as an
effective method of reducing healthcare costs by providing
accurate, early detection of health disorders and also reducing
the length of hospital stays.
The major diagnostic fields that comprise the IVD industry
include clinical chemistry, immunochemistry, microbiology,
hematology and blood banking. The IVD industry market was
estimated to be $19 billion in 1996 and is estimated to grow at a
4% compound annual rate through the year 2001. The Company
primarily serves the hospital and reference laboratory customers
of the IVD market, which tend to use more precise, higher volume
and more automated IVD systems. Hospital and reference
laboratory customers constitute approximately $15.5 billion of
the IVD market.
IVD systems are composed of instruments, reagents,
consumables, service and data management systems. Instruments
typically have a five- to ten-year life and serve to automate
repetitive manual tasks, improve test accuracy and speed the
reporting of results. Reagents are substances that react with
the patient sample to produce measurable, objective results. The
consumables vary across application segments but are generally
items such as sample containers, adapters, pipette tips, etc.,
used during test procedures. Reagents, accessories, consumables
and services generate significant ongoing revenues for suppliers.
Sample handling and preparation devices as well as data
management systems are becoming increasingly important components
of IVD systems. These system additions further improve safety
and reduce costs through automation. The Company believes that
the most important criteria customers use to evaluate IVD systems
are operating costs, reliability, reagent quality and service,
and that providing a fully integrated system that is cost
effective, reliable and easy to use results in loyalty among
customers who value consistency and accuracy in test results.
Life Sciences Research and Drug Discovery
Life sciences research is the study of the characteristics,
behavior and structure of living organisms and their component
systems. Life sciences researchers utilize a variety of
instruments and related biochemicals and supplies in the study of
life processes, drug discovery and biotechnology. The Company
estimates that in 1996 annual sales to the global life sciences
industry for instrumentation and related service and biochemicals
totaled approximately $6.4 billion.
The segments of this market on which the Company focuses are
centrifugation and other separation systems, biorobotics for drug
screening, electrophoresis for R&D and quality control uses,
spectrophotometry, protein purification, DNA synthesis and
sequencing, and liquid scintillation, for which the Company
estimates 1996 industry wide sales totaled approximately $4.2
billion in the aggregate. Trends in the life sciences industry
include the growth in funding for drug discovery by the
pharmaceutical and biotechnology industries, driven principally
by the desire to accelerate drug discovery and development, and
the demand for increased automation and efficiency at
pharmaceutical and biotechnology laboratories.
An important application of the Company's systems is for use
as a part of the drug discovery process. Pharmaceutical groups
require the capability to screen millions of potential drug leads
against many new disease targets in shorter time periods. Makers
of bioanalytical instruments have addressed this need and helped
to make the new approach to drug discovery possible by combining
the detection capabilities of bioanalytical instruments with
advances in high throughput screening. "High throughput
screening" is a general term that refers to the automated systems
and new instruments currently being used to accelerate drug
discovery.
Product Descriptions
Clinical Diagnostics Products
Clinical Chemistry Systems - Overview
Clinical chemistry systems use electrochemical detection or
chemical reactions with patient samples to detect and quantify
substances of diagnostic interest or "analytes" in blood, urine
or other body fluids. Commonly performed tests include protein,
glucose, cholesterol, triglycerides and enzymes. The Company
offers a range of automated clinical chemistry systems to meet
the testing requirements of varying size laboratories, together
with software that allows these systems to communicate with
central hospital computers. To save time and reduce errors,
systems identify patient samples through bar codes. Automated
clinical chemistry systems are designed to be available for
testing on short notice 24 hours a day. The Company has
generally configured its systems for the work flow in medium and
large hospitals, but the systems also have application in
regional reference labs. Over 180 tests for individual analytes
are offered for use with the Company's clinical chemistry systems,
which range in price from $60,000 to over $300,000.
Clinical Chemistry Systems for Automated General
Chemistry
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 [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 CX4, CX5, and CX7 analyzers are random access
systems designed to perform routine chemistry profiles as well as
some special chemistry profiles. These models are industry
leading, innovative systems that are designed to enhance
laboratory productivity. With an extensive menu of routine
chemistry, proteins, therapeutic drugs and drugs of abuse, the
SYNCHRON systems can perform over 85% of the laboratory's general
chemistry testing requirements. In 1997 the CX series was
enhanced with additional menu and software designed to simplify
operator interface and throughput capabilities. These systems
were featured at the American Association of Clinical Chemists
(AACC) and Medical trade shows as the SYNCHRON ALX and the
SYNCHRON CX7 RTS. SYNCHRON CX systems range in price from
$49,000 to $185,000 and are sold principally based on their
ability to improve laboratory efficiency.
The launch in 1997 of the new SYNCRHON autochemistry
analyzer, SYNCRHON LX(TM)20, extends the product line into high
volume laboratories. A completely new system, the SYNCHRON LX20
has twice the throughput of the CX7 system as well as options for
additional detection capabilities that will increase opportunity
for test menu expansion. The SYNCHRON LX20 is also designed for
improved sample handling to minimize required operator interface.
The SYNCHRON LX20, together with the SYNCHRON CX product lines,
provide product offerings for varying size hospitals worldwide.
Depending upon configuration and accessories, SYNCHRON LX20
systems range in price from $250,000 to $300,000.
Immunochemistry Systems - Overview
Immunochemistry systems, like clinical chemistry systems,
use chemical reactions to detect and quantify chemical substances
of diagnostic interest in blood, urine or other body fluids. The
key difference is that immunochemistry systems use antibodies
harvested from living organisms as the central component in
analytical reactions. These antibodies are created by the
organism's immune system and when incorporated in test kits,
provide the ability to detect and quantify very low analyte
concentrations. Commonly performed tests assess thyroid
function, screen and monitor for cancer and calibrate cardiac
risk. Immunochemistry systems have been constructed to meet the
special requirements of these reactions and to simplify lab
processes. They are able to automatically identify individual
patient sample tubes and communicate with central computers. The
Company offers over 60 immunochemistry-based test kits for
individual analytes and a range of systems priced from $60,000 to
$90,000.
Immunochemistry Systems and Tests For Automated
Immunoassay
The IMMAGE(R) immunochemistry system, released in 1997,
represents an improved technology, high throughput analyzer for
specific proteins, various immunologic markers and therapeutic
drugs. This system provides automated random access testing
which allows the operator to mix samples at random, eliminating
the need to analyze in batches. The system is expected to sell
for $70,000 to $90,000.
The IMMAGE system builds on the extensive installed base of
our current immunochemistry analyzer, the ARRAY(R) 360 protein
and therapeutic drug monitoring system. The ARRAY 360 was the
world's first computer enhanced, positive sample identification,
bi-directional immunochemistry analyzer for determination of
specific proteins and therapeutic drugs.
In 1996 the Company acquired Hybritech Incorporated
("Hybritech"), a San Diego based life sciences and diagnostics
company. The acquisition expanded 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. Additionally, during 1996 the
Company obtained clearance to use its OSTASE(R) assay for the
management of postmenopausal osteoporosis, making it the first
blood test cleared for such use.
In May of 1997, the Company acquired the ACCESS(R)
immunoassay product line from Sanofi Diagnostics Pasteur. This
product line, manufactured in Chaska, Minnesota, significantly
expands the Company's menu of immunochemistry diagnostic tests,
particularly those that require high sensitivity. The ACCESS
system serves as a disease state management platform used to
assist medical professionals to detect and monitor critical
parameters for thyroid function, anemia, blood viruses,
infectious disease, cancer, allergy, fertility, proteins,
therapeutic drugs, diabetes and cardiovascular and skeletal
diseases. An ongoing relationship was established with Sanofi
Diagnostics Pasteur to research and develop new tests, primarily
in the area of infectious disease. The ACCESS system sells for
approximately $125,000.
Electrophoresis Systems 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(R) 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
and sells for approximately $95,000.
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. A convenient whole blood version of the
FlexSure(R) HP was launched in 1996. In 1997 the Company
released the FlexSure(R) OBT immunochemical test that is specific
for human blood and can detect lower gastrointestinal diseases
like colorectal cancer more accurately than the Hemoccult(R)
test. In addition, through its SKD subsidiary, the Company
markets the ICON(R) test kits featuring a high sensitivity
pregnancy test widely used by health care practitioners. In
1997, the Company acquired the rights to and introduced a user-
friendly, next generation product, ICON(R) Fx Strep A test kit
that will replace the current ICON Strep A test.
Cell Counting and Characterization Systems - Overview
The Company's blood cell systems use the principles of
physics, optics, electronics and chemistry to separate cells of
diagnostic interest and then quantify and characterize them.
These systems fall into two categories: hematology and cytometry.
Hematology systems allow clinicians to study formed elements in
blood such as red and white cells and platelets. The most common
diagnostic result is a "CBC" or complete blood count, which
provides five to eight blood cell parameters. Flow cytometers
can extend analysis beyond blood to include bone marrow, tumors
and other cells. The rise of the AIDS epidemic and the need to
monitor subclasses of white cells moved cytometry from largely a
research technique into general clinical practice. These systems
are automated, use bar codes to identify samples and can
communicate with central computers.
Cell Counting and Characterization Systems For
Hematology
The Company's hematology product line reflects the clinical
diagnostic market's trend toward increasingly distinct high and
low volume segments. The Company currently manufactures eight
primary systems; the first three systems are designed for the
high volume segment and the remaining five systems are designed
for the lower volume segment.
The systems in the higher volume segment utilize volume,
conductivity and light scatter (VCS) technology in addition to
conventional, electrical aperture-impedance (Coulter Principle)
technology. Unlike other technologies, the Coulter VCS method
counts and characterizes white blood cells while maintaining the
native integrity of the white blood cells throughout the
analysis. The systems in the lower volume segment rely
exclusively upon electrical aperture-impedance technology.
High Volume Hematology Systems
COULTER (R) GEN.S(TM) hematology system - The COULTER GEN.S
system, introduced in 1996, is the Company's state-of-the-art
automated hematology system that provides walkaway, whole blood
analysis for CBCs, five-part white blood cell differential, red
cell morphology and reticulocyte analysis with automated slide-
making from a single blood aspiration.
COULTER (R) STKS(TM) hematology system - The COULTER STKS is
a cost-effective system designed for high volume clinical
laboratories. This system is particularly well suited for
commercial reference laboratories which have minimal requirements
for automated reticulocytes and slide-making capabilities, but
need the ability to measure aged specimens accurately. The STKS
hematology system provides a CBC and five-part white blood cell
differential, red cell morphology, and semi-automated
reticulocyte analysis.
COULTER(R) MAXM(TM) hematology system - The COULTER MAXM
hematology system combines the computing power and many of the
technology features of the larger COULTER STKS hematology system
within a compact, fully automated bench-top design for moderate
throughput. The COULTER MAXM hematology system offers the same
comprehensive white cell differential and reticulocyte results as
the COULTER STKS hematology system and makes Coulter's advanced
VCS technology affordable for moderate volume testing
laboratories. The system is also an ideal back-up instrument in
high volume testing facilities.
High volume hematology systems sell in the $25,000 to
$130,000 price range.
Low Volume Hematology Systems
COULTER(R) ONYX(TM) hematology instruments - The COULTER
ONYX analyzer provides a cost-effective option for laboratories
that require only a CBC and three-part screening differential.
The COULTER ONYX analyzer is available in either a single-sample
loading or autoloading configuration for walk-away automation.
COULTER(R) MD(TM) hematology instruments - The COULTER MD
instrument is designed to meet the needs of the low volume and
"stat" test market. The COULTER MD analyzer is simple to operate
and cost effective, making it ideal for the hospital laboratory
second and third shift. The recently introduced COULTER MDII
analyzer incorporates more fully-automated features to enhance
productivity .
In response to the rapidly emerging Point-of-Care market,
the COULTER MDII analyzer integrates a unique software module
(RALS, a Remote Access Laboratory System developed in conjunction
with the University of Virginia) that enables remote operation of
the instrument. These instruments are placed at multiple
locations amidst the patient population. A standard user
interface enables a central laboratory to communicate with the
analyzer and control its operation on-line. As a result, samples
can be analyzed by untrained operators under central laboratory
supervision, thereby providing test result validation, QA, and
centralized data management at reduced cost.
COULTER(R) T Series (TM) hematology instruments - The
COULTER T Series is an established series of hematology analyzers
that provide basic 5 to 8 parameter CBC testing with a two-part
screening differential. This simple-to-operate and fully
automated system is ideal for a broad segment of laboratories as
a primary or back-up system. The COULTER T Series analyzers meet
the needs of many international customers who perform relatively
high volumes of testing but have limited operating budgets.
COULTER(R) Ac.T hematology instrument - The recently
introduced COULTER Ac.T 8 hematology analyzer is the first in a
series of very low cost automated hematology systems designed to
address the low volume market. The COULTER Ac.T 8 is an eight
parameter analyzer with an icon-driven user interface. The
Company has also introduced the COULTER Ac.T 10, a platform
extension that adds a two-part differential to the test menu.
The low volume hematology systems typically sell in the
price range of $7,500 to $30,000.
Flow Cytometry Systems
Flow cytometry systems include an instrument, consumables
and related accessories to enable and enhance the performance of
these instruments.
COULTER EPICS(R) Elite ESP(TM) flow cytometer - The COULTER
EPICS Elite ESP instrument is a state-of-the-art flow cytometer,
for advanced diagnostics and research. It is designed to
perform sophisticated cell analysis and sorting applications
using the Company's extensive portfolio of reagents. The COULTER
EPICS Elite ESP instrument simultaneously performs complex multi-
parameter applications such as DNA analysis, physiologic
measurements, chromosome enumeration and the study of the
hematopoetic process. The cell sorting capability of the system
allows for the rapid separation of very large numbers of specific
cell populations from a heterogeneous mixture. Coulter's
Elite(TM) systems typically sell for $150,000 to $400,000.
COULTER EPICS(R) XL(TM) Flow Cytometer with System II(TM)
Software -- The COULTER EPICS XL cytometer with System II
software is a state-of-the-art benchtop flow cytometer used
primarily to analyze white blood cells in clinical and clinical
research settings. Because the system is flexible and
upgradeable with varying sample preparation systems, it has
proven successful in different environments, from research labs
to high and low volume hospital and commercial labs. It features
flexible networking options with other COULTER EPICS systems and
PC networks and incorporates an advanced data management system.
XL(TM) systems generally sell for $70,000 to $140,000.
Life Sciences Research and Drug Discovery Products
The Company offers a wide range of life sciences and drug
discovery systems that are used to advance basic understanding of
life processes and in the related activities of therapeutic
development. Product categories include centrifuges, flow
cytometers, life sciences laboratory automation, DNA synthesizers
and sequencers, high performance liquid chromatography ("HPLC"),
capillary electrophoresis, spectrophotometry and liquid
scintillation.
Centrifuges separate liquid samples based on the density of
the components. Samples are rotated at up to 120,000 revolutions
per minute to create forces that exceed 800,000 times the force
of gravity. These forces result in a nondestructive separation
that allows proteins, DNA and other cellular components to retain
their biological activity. Centrifuges are offered in a wide
range of models priced from $2,000 to $150,000.
Flow cytometers rapidly count and categorize multiple types
of cells in suspension. Common research applications include
blood, bone marrow and tumor cells for the study of AIDS,
leukemias and lymphomas. These systems are also useful in
clinical applications and sell in the $150,000 to $400,000 range.
Life sciences laboratory automation consists of integrated
workstations and robotics that automatically perform exacting and
repetitive processes in biotechnology and drug discovery
laboratories. Operations include the dispensing, measuring,
dilution and mixing of samples and analysis of reactions. A key
application is for high throughput screening of candidate
compounds in drug discovery research. These systems become
functional through sophisticated scheduling and data handling
software. Prices range from $50,000 to $500,000.
DNA synthesizers and sequencers allow researchers to
assemble strands of DNA molecules or to determine their component
sequence through electrophoretic separation. These techniques
are central to biotechnology science and the genetic
understanding of life processes. Systems sell in the range of
$12,000 to $45,000.
HPLC uses high pressure (5,000 to 15,000 pounds per square
inch) to force liquid samples through dense columns of separating
agents. This technique is capable of separating very complex
mixtures of both organic and inorganic molecules. The Company
focuses on biologically related applications, including protein
purification, with systems that range from $20,000 to $50,000.
In addition, the Company also provides specialized software that
is capable of recording, manipulating and archiving data from
multiple HPLC systems. This type of software is essential to the
pharmaceutical development process and installations can range
from $20,000 to over $1,000,000.
Capillary electrophoresis uses the electrical charge found
on biological molecules to separate mixtures into their component
parts. Its chief advantages are its ability to process very
small sample volumes, separation speed and high resolution. The
technique is considered a complement to HPLC. The Company has
systems for basic research and pharmaceutical methods development
and quality control that sell in the range of $30,000 to $60,000.
Spectrophotometry is the optical measurement of compounds in
liquid mixtures. Among its applications is the ability to
measure changes during biological reactions. The Company's
spectrophotometers are characterized by adaptive software that
allows users to control the time, temperature and wavelength of
light used for measurement while computing and recording
experimental results. Spectrophotometers sell in the $5,000 to
$30,000 range.
Liquid scintillation techniques allow researchers to insert
radioactive "labeled" atoms into compounds that then are
introduced into biological systems. The compounds can be traced
to a specific tissue or waste product by measuring the amount of
radioactive label that is present with a liquid scintillation
counter. Liquid scintillation systems sell in the $16,000 to
$30,000 range.
Competition
The markets for the Company's products are highly
competitive, with many companies participating in one or more
segments of the market. Competitors in the clinical diagnostics
market include Abbott Laboratories (Abbott Diagnostics Division),
Bayer Diagnostics, Dade Behring, Inc., Becton Dickinson and
Company, Johnson & Johnson (Ortho Diagnostics Division), Roche
(Roche Boehringer Mannheim Diagnostics Division) and Sysmex
Corporation of America (a subsidiary of TOA Medical Electronics
Co. Ltd.). Competitors focused more directly in the life
sciences market include Amersham Pharmacia Biotech plc, Bio-Rad
Laboratories, Inc., Hewlett-Packard Company, Hitachi, Packard
BioScience Company, The Perkin-Elmer Corporation, Sorvall
Products LP. and Waters Corporation. Competitors include
divisions or subsidiaries of corporations with substantial
resources. In addition, the Company competes with several
companies that offer reagents, consumables and service for
laboratory instruments that are manufactured by the Company and
others.
The Company competes primarily on the basis of improved
laboratory productivity, product quality, products combining to
meet multiple instrument needs, technology, product reliability,
service and price. Management believes that its extensive
installed instrument base provides the Company with a competitive
advantage in obtaining both follow-on instrument sales and After
Sales business.
Research and Development
The Company's new products originate from four sources:
internal research and development programs; external
collaborative efforts with individuals in academic institutions
and technology companies; devices or techniques that are
generated in customers' laboratories; and business and technology
acquisitions. Development programs focus on production of new
generations of existing product lines as well as new product
categories not currently offered. Areas of pursuit include
innovative approaches to cell characterization, immunochemistry,
molecular biology, advanced electrophoresis technologies,
automated sample processing and information technologies. The
Company's research and development teams are skilled in optics,
chemistry, electronics, software and mechanical and other
engineering disciplines, in addition to a broad range of
biological and chemical sciences.
Both Beckman and Coulter historically have invested
considerable capital on research and development efforts,
contributing to their leadership in their respective markets and
a consistent flow of new products. The Company's research and
development expenditures for Fiscal 1997, 1996, and 1995 were
$123.6 million, $108.4 million and $91.7 million, respectively.
Sales and Service
The Company has sales in over 120 countries and maintains
its own marketing, service and sales forces throughout the world.
Most of the Company's products are distributed by the Company's
sales groups; however the Company employs independent
distributors to serve those markets that are more efficiently
reached through such channels.
The Company's sales representatives are 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 to its customers, principally those
used for clinical diagnostic applications in hospitals. This
method of instrument placement is a significant competitive
factor for the clinical diagnostics market.
The Company's ability to provide immediate after sales
service and technical support are critical to customer
satisfaction. This includes capabilities to provide immediate
technical support by phone and to deliver parts or have a service
engineer on site within hours. To have such capabilities on a
global basis requires a major investment in personnel,
facilities, and other resources. The Company's large, existing
installed base of instruments makes the required service and
support infrastructure financially viable. The Company considers
its reputation for service responsiveness and competence and its
worldwide sales and service network to be important competitive
assets.
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 approximately 700 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 trademarks are "Beckman" and
"Coulter", with the trade name also being Beckman or Beckman
Instruments, Inc. The Company vigorously protects its primary
trademarks, which are used on the Company's products and are
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.
Year 2000 Compliance
The Company is in the process of modifying, upgrading or
replacing its internal computer software applications and
information systems. The Company is also in the process of
evaluating all currently marketed and leased products and will
upgrade those products that are intended for continued marketing
and leasing beyond the year 1999. The Company is currently
evaluating possible strategies to accommodate its installed
analytical instrument systems owned by its customers.
These tasks have been assigned to a senior executive of the
Company who has established three projects, each led by a project
manager and staffed by software experts, to perform the
evaluation process: 1) product related matters, 2) mainframe
management information systems and software, and 3) all other
systems (e.g. personal computers, office machines, and supplier
systems). Analysis and evaluation activities were begun in 1996
and are in varying stages of completion at this time. The
Company recently expended approximately $250,000 on new software
that provides a suite of tools to assist in the year 2000
remediation process. Remediation activities have begun and are
planned and expected to be completed by the end of 1998. Testing
and validation of the remediated systems and any final revisions
needed will be conducted in 1999.
The Company does not expect that the cost of its year 2000
compliance program will be material to its business, financial
condition or results of operations. The Company believes that it
will be able to achieve compliance by the end of 1999 and does
not currently anticipate any material disruption in its
operations as the result of any failure by the Company to be in
compliance. Although the impact on the Company caused by the
failure of any of the Company's significant suppliers or
customers to achieve year 2000 compliance in a timely or
effective manner is uncertain, the Company's business and results
of operations could be materially adversely affected by such
failure.
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, when
fully implemented, require regulatory review and approval of
quality assurance protocols for the Company's clinical reagent
products. 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 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 Diego, California; Miami and Hialeah,
Florida; Florence, Kentucky; Allendale, New Jersey; Sharon Hill,
Pennsylvania; Chaska, Minnesota; Naguabo, Puerto Rico; Galway,
Ireland, Australia, France, Germany, Hong Kong, South Africa and
United Kingdom facilities have been certified as complying with
the requirements of ISO 9000. Many of the Company's
international sales and service subsidiaries have also been
certified, including those located in Australia, Austria, Canada,
China, 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 U.S. 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. Japan, France, Germany and Italy are among other
countries that are in the process of adopting reimbursement
policies designed to lower the cost of healthcare.
Medicare reimbursement of inpatient capital costs incurred
by a hospital (to the extent of Medicare utilization) is in a 10-
year transition period begun in 1991 from the "capital cost pass-
through" payment methodology to a "prospective capital" payment
methodology based on DRGs. 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. 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. The
Company believes that its operations comply in all material
respects with applicable federal, state, and local environmental
laws and regulations.
To address contingent environmental costs, the Company
establishes reserves when such costs are probable and can be
reasonably estimated. The Company believes that, based on
current information and regulatory requirements (and taking third
party indemnities into consideration), the reserves established
by the Company for environmental expenditures are adequate.
Based on current knowledge, to the extent that additional costs
may be incurred that exceed the reserves, such amounts are not
expected to have a material adverse effect on the Company's
operations or financial condition, although no assurance can be
given in this regard.
In 1983 the Company discovered organic chemicals in the
groundwater near a waste storage pond at its manufacturing
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 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 1987 soil and groundwater contamination was discovered on
property in Irvine, California (the "property") formerly owned by
the Company. In 1988 The Prudential Insurance Company of America
("Prudential"), which purchased the property from the Company,
filed suit against the Company in U.S. District Court in
California for recovery of costs and other alleged damages with
respect to the soil and groundwater contamination. 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.
Soil and groundwater remediation of the property have been
in process since 1988. During 1994 the County agency overseeing
the site soil remediation formally acknowledged completion of
remediation of a major portion of the soil, although there remain
other areas of soil contamination that may require further
remediation. In July 1997 the California Regional Water Quality
Control Board, the agency overseeing the site groundwater
remediation, issued a closure letter for the upper water bearing
unit. The Company and Prudential continued to operate a
groundwater treatment system throughout 1997 and expect to
continue its operation in 1998.
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
As of December 31, 1997, the Company had approximately 7,900
employees located in the United States and approximately 3,200 in
international operations. The Company believes its relations
with its employees are good.
Geographic Area Information
Information with respect to the above-captioned item is
incorporated by reference to Note 14 Business Segment Information
of the Consolidated Financial Statements of the Company's Annual
Report to Stockholders for the year ended December 31, 1997.
Item 2. Properties
The Company's primary instrument assembly and manufacturing
facilities are located in Fullerton, Brea, and Palo Alto,
California; Chaska, Minnesota; and Hialeah, Opa Locka and Miami
Lakes, Florida. The Company recently announced the termination
effective June, 1998 of manufacturing operations at a Coulter
facility located in Luton, England. Component manufacturing
support facilities for parts and electronic subassemblies are
located in Fullerton and Porterville, California. An additional
manufacturing facility is located in Galway, Ireland. Reagents
are manufactured in Carlsbad, San Diego and Palo Alto,
California; Chaska, Minnesota; Naguabo, Puerto Rico; Florence,
Kentucky; Galway, Ireland; Germany; France; Japan; Brazil;
Australia; Argentina and Hong Kong. The Company's computer
software products business is located in Allendale, New Jersey
and its facility for the production of Hemoccult(R) test kits and
related products is located in Sharon Hill, Pennsylvania. A
portion of the Company's laboratory robotics operations (Sagian)
are conducted in leased facilities in Indianapolis, Indiana and
some of its DNA sequencing activities are performed in leased
facilities in Foster City, California.
All of the Company's U.S. manufacturing facilities,
including land and buildings, are owned, with the exception of
Allendale, Foster City, Indianapolis, San Diego, Sharon Hill, Opa
Locka, Miami Lakes, eight of the facilities in Hialeah and
Florence 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 with the exception of Germany, France, Japan,
Brazil and Australia. The component production facilities for
the Company also include plastics molding and machine shop
capabilities in Fullerton. This facility, in conjunction with
electronic subassembly work done in Porterville, supplies the
primary parts and subassemblies to the various instrument
assembly locations in California. The Company's principal
distribution locations are in Brea and Fullerton, California;
Chaska, Minnesota; 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 intends to consummate several sale leaseback
transactions with respect to some of its properties during 1998
and 1999 which the Company expects will generate proceeds to the
Company of approximately $150 million in 1998 and approximately
$40 million in 1999. 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
The Company is currently, and is from time to time, subject
to claims and suits arising in the ordinary course of its
business, including those relating to intellectual property,
contractual obligations, competition and employment matters. In
certain such actions, plaintiffs request punitive or other
damages or nonmonetary relief, which may not be covered by
insurance, and in the case of nonmonetary relief, could, if
granted, materially affect the conduct of the Company's business.
The Company accrues for potential liabilities involved in these
matters as they become known and can be reasonably estimated. In
management's opinion (taking third party indemnities into
consideration), the various asserted claims and litigation in
which the Company is currently involved are not reasonably likely
to have a material adverse effect on the Company's operations or
financial position. However, no assurance can be given as to the
ultimate outcome with respect to such claims and litigation. The
resolution of such claims and litigation could be material to the
Company's operating results for any particular period, depending
upon the level of income for such period.
In January 1996, Coulter, then unrelated to Beckman notified
Hematronix, a competitive reagent manufacturer, that Hematronix
was selling certain reagents and controls that infringed upon
certain of Coulter's patents. In response, Hematronix filed a
complaint in April 1996, in the United States District Court of
the Eastern District of California against Coulter. The
complaint seeks a declaratory judgment to invalidate the patents.
The complaint also includes antitrust and related business tort
claims directed at Coulter's business and leasing activities, and
seeks actual, treble and punitive damages in an unspecified
amount, as well as injunctive relief. Coulter answered the
complaint by denying violations of the antitrust laws and
business tort claims and counterclaimed that Hematronix willfully
infringed the patents at issue. Discovery has been conducted by
both sides and is continuing. The Company has filed a motion for
summary judgment on the antitrust and other non-patent issues.
The motion has been heard and a decision from the court is
pending. Management of the Company believes that the patents at
issue are valid and have been infringed upon by Hematronix and
that the antitrust claims are without merit. If the matter does
proceed to trial, the trial is scheduled for October, 1998.
Although the plaintiff has claimed substantial damages, based on
the Company's analysis of the present facts and the existence of
certain indemnities by the former stockholders of Coulter, the
Company believes that the ultimate outcome of this litigation is
not reasonably likely to have a material adverse effect on the
Company's operations or financial position.
Through its Hybritech acquisition the Company obtained a
patent, referred to as the Tandem Patent, that 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"),
former 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 sought 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 Beckman'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
appealed. Prior to the Court's consideration of the appeal,
Prudential settled the lawsuit with Forest City and requested
Beckman to pay a portion of the settlement pursuant to the 1990
settlement agreement. Beckman does not agree with Prudential's
claims and believes it has significant defenses to them.
Although the outcome of this dispute 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, since 1992 six 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 (relating to a former Company manufacturing site) and a
number of other defendants, including Motorola, Inc., Siemens
Corporation, the cities of Phoenix and Scottsdale, and others.
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. These suits are currently in
the discovery phase, with the first of several anticipated trials
in the actions scheduled for June, 1998. * 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),
Wilkins v. Motorola, Inc., et. al. (filed July 1995), and Dawson
v. Motorola, Inc., et. al. (filed August 1997).
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 Company believes the prosecutor's evidence is weak and
insufficient to support a criminal conviction against certain
identified employees (the Subsidiary is not a defendant). The
Court has appointed economic experts to evaluate and present a
comprehensive economic report on the leasing practices of the
industry. 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, 1998, 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, 64, 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
Health Foundation in
Fullerton, California and of
Harvey Mudd College. Mr.
Rosso has been a director of
the Company since 1988.
John P. Wareham, 56, 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 veterinary
pharmaceuticals and 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, 62, 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, 47, 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 M. Mares, 51, Vice Mr. Mares was named Vice
President, Human Resources President, Human Resources of
the Company in 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, 55, 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, 49, Vice Mr. Tatarian was named Vice
President, Beckman President, Beckman
Distribution Markets Operation Distribution Markets
Operation, of the Company in
October 1997. He had been
Vice President, Field
Operations - Emerging Markets
since 1995 and Vice President
Bioresearch Commercial
Operations International since
1994. Prior thereto, he had
been Vice President, Marketing
Operations for the
Bioanalytical Systems Group
since 1991. Mr. Tatarian
originally joined the Company
in 1973.
Albert R. Ziegler, 59, Vice Mr. Ziegler was named Vice
President, Clinical Chemistry President, Clinical Chemistry
Division Division of the Company in
October 1997. He had been
Vice President, Diagnostics
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, 41, Treasurer Mr. Glyer has been Treasurer
of the Company since 1993. In
1995 he additionally assumed
the position of Director,
Corporate Business Development
and Licensing. He served as
Assistant Treasurer since 1989
when he first joined the
Company.
Arthur A. Torrellas, 67, Vice Mr. Torrellas was Vice
President, Field Operations - President, Field Operations -
North America/Europe North America/Europe of the
Company from 1995 until
December, 1997 when he
retired. He had been Vice
President, Diagnostic
Commercial Operations since
1994 and Vice President,
International Operations for
the Diagnostic Systems Group
since 1985. Mr. Torrellas
first joined the Company in
1977.
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 section entitled
"QUARTERLY INFORMATION (Unaudited)" of the Company's Annual
Report to stockholders for the year ended December 31, 1997.
During 1997 the Company paid four consecutive quarterly dividends
of $.15 per share of common stock, for a total of $.60 per share
for the year. During 1996 the Company paid four consecutive
quarterly dividends of $.13 per share of common stock, for a
total of $.52 per share for the year. Under the terms of the
Company's principal credit agreement, which expires on October
31, 2002, dividend payments are limited but not prohibited. To
date this limitation has not had an impact on the Company's
dividends and is not expected to have an impact in the
foreseeable future. In addition, as of January 26, 1998, there
were approximately 8,154 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
"SELECTED FINANCIAL INFORMATION" of the Company's Annual Report
to Stockholders for the year ended December 31, 1997.
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, 1997.
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 INFORMATION (Unaudited)" of the Company's Annual
Report to Stockholders for the year ended December 31, 1997.
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 2, 1998 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 2, 1998 entitled "EXECUTIVE
COMPENSATION", excluding those sections entitled "Organization
and 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 2, 1998 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 2, 1998 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 *.
2.1 Stock Purchase Agreement among Coulter
Corporation, The Stockholders of Coulter
Corporation and the Company, dated as of August
29, 1997 (incorporated by reference to Exhibit 2.1
of the Company's Report on Form 8-K dated November
13, 1997, File No. 001-10109). [Note:
Confidential treatment has been requested for
portions of this document.]
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
(incorporated by reference to Exhibit 4.5 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December 31, 1995, File No. 001-10109).
4.6 Amendment 1996-1 to the Company's Savings and
Investment Plan, adopted December 5, 1996, 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 (incorporated by reference to Exhibit
4.6 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1996, File
No. 001-10109).
4.7 Amendment 1996-2 to the Company's Savings and
Investment Plan, adopted effective December 3,
1996 (incorporated by reference to Exhibit 4.1 of
the Company's Quarterly Report to the Securities
and Exchange Commission on Form 10-Q for the
quarterly period ended June 30, 1997, File No.
001-10109).
4.8 Amendment 1997-1 to the Company's Savings and
Investment Plan, adopted June 9, 1997
(incorporated by reference to Exhibit 4.2 of the
Company's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarterly
period ended June 30, 1997, File No. 001-10109).
4.9 Amendment 1997-2 to the Company's Savings and
Investment Plan, adopted June 9, 1997 (incorporated
by reference to Exhibit 4.3 of the Company's Quarterly
Report to the Securities and Exchange Commission on
Form 10-Q for the quarterly period ended June 30,
1997, File No. 001-10109).
4.10 Amendment 1997-3 to the Company's Savings and
Investment Plan, adopted December 3, 1997, 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.
4.11 Amendment 1997-4 to the Company's
Savings and Investment Plan, adopted December 17,
1997, 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.
4.12 Senior Indenture between the Company and
The First National Bank of Chicago as Trustee,
dated as of May 15, 1996, filed in connection with
the Form S-3 Registration Statement filed with the
Securities and Exchange Commission on April 5,
1996, File No. 333-02317 (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, 1996, File No. 001-10109).
4.13 7.05% Debentures Due June 1, 2026, filed in
connection with the Form S-3 Registration
Statement filed with the Securities and Exchange
Commission on April 5, 1996, File No. 333-02317
(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, 1996, File No. 001-10109).
10.1 Credit Agreement dated as of October 31,
1997 among the Company as Borrower, the Initial
Lenders and the Initial Issuing Banks 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, 1997, File No. 001-
10109).
10.2 Guaranty dated as of October 31, 1997 made by each
Guarantor Subsidiary (as defined in the Credit
Agreement, Exhibit 10.1 herein) of the Company, in
favor of the Lender Parties (as defined in the
Credit Agreement) (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, 1997,
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 Benefit Equity Amended and Restated Trust Agreement
between the Company and Mellon Bank, N.A., as Trustee,
for assistance in meeting stock-based obligations of
the Company, dated as of February 10, 1997.
* 10.8 The Company's Executive Incentive Plan,
adopted by the Company in 1996 (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 March
31, 1996, File No. 001-10109).
* 10.9 Amendment No. 1 to the Company's Executive Incentive
Plan, adopted in 1996 (incorporated by reference to
Exhibit 10.9 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K for the
fiscal year ended December 31, 1996, File No. 001-10109).
* 10.10 The Company's Annual Incentive Plan for 1997,
adopted by the Company in 1997 (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, 1997, File No. 001-10109.
* 10.11 The Company's Incentive Compensation Plan of
1990, amended and restated April 4, 1997, with
amendments approved by stockholders April 3,
1997 and effective January 1, 1997 (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 March 31, 1997, File No. 001-10109).
* 10.12 Amendment to the Company's Incentive Compensation
Plan of 1990 adopted December 5, 1997 (incorporated
by reference to Exhibit 4.1 to Post-Effective
Amendment No. 1 to the Form S-8 Registration
Statement filed January 13, 1998, Registration
No. 333-24851.
* 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 Amendment to the Company's Incentive Compensation
Plan, adopted December 5, 1997 (incorporated by
reference to Exhibit 4.2 to Post Effective
Amendment No. 1 to the Form S-8 Registration
statement, filed January 13, 1998, Registration
No. 33-31573).
* 10.15 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).
* 10.16 Restricted Stock Agreement and Election
(Cycle Three - Economic Value Added Incentive
Plan), adopted by the Company in 1996
(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 period ended December 31, 1996, File No. 001-
10109).
* 10.17 Form of Restricted Stock Agreement, dated as
of January 3, 1997, between the Company and
certain of its Executive Officers and certain
other key employees (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, 1997,
File No. 001-10109).
* 10.18 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).
* 10.19 Amendment 1995-1 to the Company's Supplemental
Pension Plan, adopted by the Company in 1995,
effective as of October 1, 1993 (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, 1996, File No. 001-10109).
* 10.20 Amendment 1996-1 to the Company's Supplemental
Pension Plan, dated as of December 9, 1996
(incorporated by reference to Exhibit 10.18
of the Company's Annual Report to the Securities
and Exchange Commission on Form 10-K for the
fiscal year ended December 31, 1996, File No. 001-
10109).
* 10.21 Stock Option Plan for Non-Employee Directors
(Amended and Restated effective as of
August 7, 1997), incorporated by reference to
Exhibit 4.1 of the Company's Registration
Statement on Form S-8 filed with the Securities
and Exchange Commission on October 8, 1997,
Registration No. 333-37429.
* 10.22 Form of Change in Control Agreement, dated
as of May 1, 1989, between the Company,
certain 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).
* 10.23 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).
* 10.24 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).
* 10.25 Second Amendment to the December 1, 1993
Agreement Regarding Retirement Benefits of Arthur
A. Torrellas, dated as of December 16, 1996,
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, 1996, File No. 001-
10109).
* 10.26 Third Amendment to the December 1, 1993
Agreement Regarding Retirement Benefits of Arthur
A. Torrellas, dated as of July 18, 1997, between
the Company and Arthur A. Torrellas.
* 10.27 Agreement Regarding Retirement Benefits
of Albert Ziegler, dated June 16, 1995, between
the Company and Albert Ziegler (incorporated by
reference to exhibit 10.22 of the Company's Annual
Report to the Securities and Exchange Commission
on Form 10-K/A for the fiscal year ended December
31, 1995, File No. 001-10109).
* 10.28 Agreement Regarding Retirement Benefits of
Fidencio M. Mares, adopted and dated April 30,
1996, between the Company and Fidencio M. Mares
(incorporated by reference to Exhibit 10.3 of the
Company's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarterly
period ended June 30, 1996, File No. 001-10109).
10.29 Amendment 1997-1 to the Company's Employees'
Stock Purchase Plan, adopted effective
January 1, 1998 and dated October 20, 1997
(incorporated by reference to Exhibit 10.3 of the
Company's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarterly
period ended September 30, 1997, File No. 001-
10109).
* 10.30 The Company's Executive Deferred Compensation Plan,
effective January 1, 1998, dated November 5, 1997
(incorporated by reference to Exhibit 10.4 of the
Company's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarterly
period ended September 30, 1997, File No. 001-10109).
* 10.31 The Company's Executive Restoration Plan, effective
January 1, 1998, dated November 5, 1997 (incorporated
by reference to Exhibit 10.5 of the Company's Quarterly
Report to the Securities and Exchange Commission on
Form 10-Q for the quarterly period ended September 30,
1997, File No. 001-10109).
* 10.32 The Company's Amended and Restated Deferred
Directors' Fee Program, amended as of June 5,
1997 (incorporated by reference to Exhibit
10.6 of the Company's Quarterly Report to the
Securities and Exchange Commission on Form 10-Q
for the quarterly period ended September 30, 1997,
File No. 001-10109).
* 10.33 Amendment 1997-2 to the Company's Supplemental
Pension Plan, adopted as of October 31,
1997 (incorporated by reference to Exhibit 10.7
of the Company's Quarterly Report to the Securities
and Exchange Commission on Form 10-Q for the
quarterly period ended September 30, 1997, File
No. 001-10109).
* 10.34 Form of Restricted Stock Award Agreement
between the Company and its non-employee
Directors, effective as of October 3, 1997
(incorporated by reference to Exhibit 4.1 of the
Company's Registration Statement on Form S-8 filed
with the Securities and Exchange Commission on
October 8, 1997, Registration No. 333-37429).
* 10.35 Form of Stock Option Grant for non-employee
Directors (incorporated by reference to
Exhibit 4.3 of the Company's Registration
Statement on Form S-8 filed with the Securities
and Exchange Commission on October 8, 1997,
Registration No. 333-37429).
10.36 The Company's Employees' Stock Purchase Plan,
amended and restated as of November 1, 1996,
filed in connection with the Form S-8 Registration
Statement filed with the Securities and Exchange
Commission on December 19, 1995, File No. 33-65155
(incorporated by reference to Exhibit 10.29 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December 31, 1997, File No. 001-10109).
* 10.37 The Company's Option Gain Deferral Program,
dated January 14, 1998 (incorporated by
reference to Exhibit 4.2 of Post-Effective
Amendment No. 1 to the Form S-8 Registration
Statement filed with the Securities and Exchange
Commission on January 13, 1998, Registration No.
333-24851).
* 10.38 Form of Coulter's Special Incentive Plan and
Sharing Bonus Plan, assumed by the Company
October 31, 1997.
10.39 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).
10.40 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).
10.41 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).
11. Statement regarding computation of per share
earnings: This information is incorporated
by reference to Note 1 Summary of Significant
Accounting Policies and Note 13 Earnings Per
Share of the Consolidated Financial Statements
of the Company's Annual Report to Stockholders
for the year ended December 31, 1997.
13. WORDS ON NUMBERS Section of the Company's Annual
Report to Stockholders for the year ended December
31, 1997.
21. Subsidiaries.
23. Consent of KPMG Peat Marwick LLP, February 9, 1998.
27. Financial Data Schedule.
(b) Reports on Form 8-K During Fourth Quarter ended
December 31, 1997.
The following reports on Form 8-K were filed during the
quarter ended December 31, 1997:
1. Item 5. Other Events. Beckman Instruments, Inc.
Announces Plans for Debt Offering, September 23, 1997.
2. Item 5. Other Events. Summary of the acquisition
of Coulter Corporation by Beckman Instruments, Inc.
and the related financing transactions, October 15,
1997. Includes financial statements for Coulter
Corporation for its last three fiscal years and pro
forma financial statements for the most recent fiscal
year.
3. Item 2. Acquisition of Assets. Beckman
Consummates its Acquisition of Coulter
Corporation, November 13, 1997. Includes pro
forma financial statements for the year ended
December 31, 1996 and for the six month period
ended June 30, 1997.
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 23, 1998
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, 1997.
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, 1997 is
set forth in Note 15 Supplementary Information of the "NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS" of the Company's Annual Report
to Stockholders for the year ended December 31, 1997. 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 5, 1998 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 5, 1998
President,
Chief Operating Officer
JOHN P. WAREHAM and Director
John P. Wareham February 4, 1998
Vice President, Finance
and Chief Financial Officer
D. K. WILSON (Principal Financial Officer)
Dennis K. Wilson February 4, 1998
Vice President and
Controller (Principal
JAMES T. GLOVER Accounting Officer)
James T. Glover February 5, 1998
HUGH K. COBLE Director February 4, 1998
Hugh K. Coble
CAROLYNE K. DAVIS Director February 4, 1998
Carolyne K. Davis, Ph.D.
Signature Title Date
--------- ----- ----
PETER B. DERVAN Director February 4, 1998
Peter B. Dervan, Ph.D.
DENNIS C. FILL Director February 4, 1998
Dennis C. Fill
CHARLES A. HAGGERTY Director February 4, 1998
Charles A. Haggerty
GAVIN HERBERT Director February 4, 1998
Gavin S. Herbert
WILLIAM N. KELLEY Director February 4, 1998
William N. Kelley, M.D.
FRANCIS P. LUCIER Director February 4, 1998
Francis P. Lucier
C. RODERICK O'NEIL Director February 4, 1998
C. Roderick O'Neil
BETTY WOODS Director February 4, 1998
Betty Woods
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------- -------
4.10 Amendment 1997-3 to the Company's Savings and Investment
Plan, adopted December 3, 1997, 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.
4.11 Amendment 1997-4 to the Company's Savings and Investment
Plan, adopted December 17, 1997, 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 Benefit Equity Amended and Restated Trust Agreement
between the Company and Mellon Bank, N.A., as Trustee,
for assistance in meeting stock-based obligations of the
Company, dated as of February 10, 1997.
10.25 Third Amendment to the December 1, 1993 Agreement
Regarding Retirement Benefits of Arthur A. Torrellas,
dated as of July 18, 1997, between the Company and
Arthur A. Torrellas.
10.38 Form of Coulter's Special Incentive Plan and Sharing
Bonus Plan, assumed by the Company October 31, 1997.
13. WORDS ON NUMBERS Section of the Company's Annual Report
to Stockholders forthe year ended December 31, 1997.
21. Subsidiaries.
23. Consent of KPMG Peat Marwick LLP, February 9, 1998.
27. Financial Data Schedule.