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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, 1998
Commission File Number 001-10109
BECKMAN COULTER, INC.
4300 N. Harbor Boulevard, Fullerton, California 92834-3100
(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 22, 1999: $1,505,218,255.00
Common Stock, $.10 par value, outstanding as of January 22, 1999:
28,636,732 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, 1998 Part I and Part II
Proxy Statement for the 1998 Annual
Meeting of Stockholders to be held on
April 8, 1999 Part III
BECKMAN COULTER, INC.
PART I
Item 1. Business
Overview
Beckman Coulter, Inc. (including its subsidiaries, 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 80% of the
Company's 1998 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 clinical 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 automating 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 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 science research market include centrifuges, pH meters, flow
cytometers, high performance liquid chromatographs,
spectrophotometers, laboratory robotic workstations, capillary
electrophoresis systems, liquid scintillation 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. Approximately 67% of the
Company's 1998 sales were derived from these "after sales", while
the remaining sales were derived from the direct placement of
systems.
Beckman Coulter's principal executive offices are located at 4300
N. Harbor Blvd., Fullerton, California 92835. Its mailing address
is P. O. Box 3100, Fullerton, CA 92834-3100. The telephone number
is (714) 871-4848.
Background
The formation of Beckman Coulter began on October 31, 1997 when
what was then Beckman Instruments, Inc. acquired Coulter
Corporation. Coulter became a wholly owned subsidiary of Beckman
Instruments, Inc. Beckman Instruments, Inc. changed its name to
Beckman Coulter, Inc. on April 2, 1998.
The acquisition of Coulter was an 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 to Beckman's
established positions in clinical chemistry and life sciences.
Beckman and Coulter served substantially the same customer base
but had 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. To accomplish these objectives, the
Company initiated a program to streamline Coulter's operations
and then integrate the two companies. This program, which was
substantially completed in 1998, included a global evaluation of
all subsidiary structures, sales and service approaches, and
staffing levels. In particular, the Company's clinical
diagnostics commercial operations have been consolidated. These
customers now deal with a single sales force, a single sales
administration contact, and a single service organization.
Beckman Instruments, Inc. was founded by Dr. Arnold O. Beckman in
1934, and entered the laboratory market by introducing the
world's first pH meter. 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 was operated as
a subsidiary of SmithKline Beckman until 1989 when it was
divested. Since that time, Beckman, now Beckman Coulter, Inc. has
operated as a fully independent, publicly-owned company.
Coulter Corporation was founded by Wallace and Joseph Coulter in
1958. The company was formed to market the "Coulter Counter," an
instrument used to determine the distribution of red and white
cells in blood. This instrument was based on the "Coulter
Principle," which was developed by Wallace Coulter in 1948. The
Coulter Principle involved an electronic, automatic way of
counting and measuring the size of microscopic particles. Coulter
Corporation was a private company and remained under the control
of the Coulter family until it was acquired by Beckman in 1997.
Customers and Markets
The two primary segments which the Company serves are the
clinical diagnostics market and the life science research market.
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). The Company's
life science research 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, 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 the life science research 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 government cost containment initiatives in
Europe as well as health care cost containment generally. The
life science research market also continues to be affected by
consolidation of pharmaceutical companies and governmental
constraints on research and development spending, especially
outside of the United States.
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 sales force 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, such as 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. As a result of the cost containment pressures and other
factors described above, the Company expects growth in both
markets to be flat or grow in the low single digits over the
short term. 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, diabetes, 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. These can be grouped into the clinical diagnostics and
the life science research segments, by type of application. The
following table shows the breakdown of sales between the two
market segments.
PRODUCT SALES AS A PERCENT OF TOTAL PRODUCT SALES
FOR CATEGORIES REPRESENTING
MORE THAN 10 PERCENT OF SALES
1998 1997 1996
---- ---- ----
Clinical Diagnostics 78 68 63
Life Science Research 22 32 37
Products - Overview - Clinical Diagnostics
The clinical diagnostics market encompasses the detection and
monitoring of disease by means of laboratory evaluation and
analysis of bodily fluids and other substances from patients.
This type of testing is referred to as "in vitro diagnostic" or
"IVD" testing. Due to its important role in the diagnosis and
treatment of patients, IVD testing is an integral part of overall
management of patient care. Additionally, IVD testing is
increasingly valued as an effective method of reducing healthcare
costs by reducing the length of hospital stays through accurate,
early detection of health disorders and management of treatment.
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 $18 billion in 1998 and is estimated to grow at a
4% compound annual rate through the year 2002. 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, and pipette tips 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 enhancements further improve safety and
reduce customer 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.
Products - Overview - Life Science Research
Life science research is the study of the characteristics,
behavior and structure of living organisms and their component
systems. Life science 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 1997 annual sales to the global life science
research market for instrumentation and related service and
biochemicals totaled approximately $7.4 billion.
The portions of this market on which the Company focuses are
centrifugation and other separation systems, biorobotics for drug
screening, electrophoresis for research and development and
quality control uses, spectrophotometry, DNA sequencing and
synthesis, and liquid scintillation. The Company estimates that
1998 industry wide sales of these portions totaled approximately
$5.5 billion in the aggregate. Trends in the life science
research 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 in 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 (referred to as "analytes") in
blood, urine or other body fluids. Commonly performed tests
include protein, glucose, cholesterol, triglycerides,
electrolytes, 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 barcodes. Automated clinical chemistry
systems are designed to be available for testing on short notice
twenty-four 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
$45,000 to over $300,000.
Clinical Chemistry Systems for Automated General Chemistry
SYNCHRON(R) Systems
The Company's SYNCHRON 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)
Analyzer, introduced in 1994, is an extension of the original
SYNCHRON CX(R)3 Analyzer that adds computer enhanced software
features, including sample identification using bar codes and up
to nine "on-board" chemistries.
The SYNCHRON CX(R)4, CX(R)5, and CX(R)7 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 improve
laboratory efficiency and 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 increase
throughput capabilities. These enhanced systems are designated
the SYNCHRON CX(R)9 ALX and the SYNCHRON CX(R)7 RTS. SYNCHRON CX
Systems range in price from $49,000 to $185,000.
The launch in 1997 of the SYNCHRON LX(R)20 Clinical System
extended the product line into high volume laboratories. 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 $150,000 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,
and screen and monitor for cancer and cardiac risk.
Immunochemistry systems have been designed 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 the laboratory's central computer. 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, is a 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 IMMAGE
System builds on the extensive installed base of its predecessor
immunochemistry analyzer, the ARRAY(R) 360 Protein and
Therapeutic Drug Monitoring System. The ARRAY 360 was the
world's first computer enhanced, immunochemistry system offering
sample identification using bar codes and bidirectional
communication with a laboratory's central computer. The IMMAGE
System sells for $70,000 to $90,000.
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. Paramount among these products are 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. Another test is the OSTASE(R)
assay, which is used for the management of postmenopausal
osteoporosis, making it the first blood test cleared for such
use. During 1998, the Company obtained clearance for a test for
free PSA. This test is used in conjunction with the Company's PSA
test to assist in determining which patients require further
testing and evaluation.
In May of 1997, the Company acquired the Access(R) Immunoassay
System product line from Sanofi Diagnostics Pasteur. This product
line 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, 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 and blood viruses.
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, as well as cardiac, liver and other
diseases. The Appraise Densitometer can be used in conjunction
with Paragon reagent 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 System. This system is
designed to fully automate the manual and somewhat labor
intensive conventional electrophoresis analysis of serum protein
electrophoresis (SPE) and immunofixation electrophoresis (IFE).
Positioned to complement the Paragon gels and the APPRAISE
Densitometer, the Paragon CZE 2000 System is targeted at high volume
electrophoresis labs worldwide and sells for approximately $95,000.
Primary Care Diagnostics
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) occult blood test (OBT) 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. This test is 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
test was launched in 1996. In 1997, the Company released the
FlexSure(R) OBT immunochemical test. This test is specific for
human blood and can detect lower gastrointestinal diseases like
colorectal cancer more accurately than the Hemoccult(R) test. In
addition, 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.
The Company also recently began to introduce the COULTER(R)
Ac.T(TM) Hematology Analyzers. These products are low cost
automated hematology systems designed to address the low volume
market. Models of this system also offer features such as closed
tube sampling, which enhances bio-safe operation by reducing the
need to handle open sample tubes.
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 blood cells and platelets. The most common
diagnostic result is a "CBC" or complete blood count, which
provides eight to twenty-three 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
was introduced in 1996. It is the Company's state-of-the-art
automated hematology system, providing 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. The System automates
manual interpretation and result verification through its data
management workstation.
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, 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 $40,000 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) II Hematology Instruments - The COULTER MD II,
which was introduced in 1994, is designed to meet the needs of
the low volume and "stat" test market. The COULTER MD II
analyzer is simple to operate and cost effective, making it ideal
for the hospital laboratory second and third shift or by a
physician office or group practice. The COULTER MD II analyzer
interfaces with a unique software module (called the "Remote
Access Laboratory System" or "RALS"). The RALS 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, quality
assurance, and centralized data management at reduced cost.
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) ALTRA(TM) Cell Sorter/Flow Cytometer - The
COULTER EPICS ALTRA Cytometer is a state-of-the-art cell sorter
and 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 ALTRA 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. ALTRA
systems typically sell for $200,000 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. These systems generally
sell for $65,000 to $110,000.
COULTER TQ-Prep(TM) - The Coulter TQ-Prep was introduced in 1997.
This third generation product provides a consistent, standardized
method for preparing whole blood for flow cytometric analysis.
These products sell for $15,000 to $20,000.
Product Descriptions - Life Science Research Products
The Company offers a wide range of life science research
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 sequencers
and synthesizers, 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 130,000 revolutions per
minute to create forces that exceed 1,000,000 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 $250,000.
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 $70,000 to $400,000 range.
Life science research 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 sequencers and synthesizers allow researchers to determine
their component sequence through electrophoretic separation or to
assemble strands of DNA molecules. These techniques are central
to biotechnology science and the genetic understanding of life
processes. Systems sell in the range of $12,000 to $90,000.
HPLC uses pressurized solvents to mobilize sample mixtures
through columns packed with solid or gel phase 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 parts of each
market segment. 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 science research
market include Amersham Pharmacia Biotech p.l.c., 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: (1)
internal research and development programs; (2) external
collaborative efforts with individuals in academic institutions
and technology companies; (3) devices or techniques that are
generated in customers' laboratories; and (4) 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 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 were $171.4 million in fiscal 1998, $123.6 million
in 1997, and $108.4 million in 1996.
Sales and Service
The Company has sales in over 120 countries and maintains its own
marketing, service and sales forces in major markets 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 is 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 research and development efforts, the Company has an
active patent protection program which includes approximately 750
active U.S. patents and patent applications. Of this number,
approximately 280 relate to the life science research segment and
the remaining 470 relate to the clinical diagnostics segment. 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 being "Beckman Coulter". During 1998, the
Company also adopted a new logo. 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
Information with respect to this subject is incorporated by
reference to the section entitled "Management's Discussion and
Analysis" of the Company's Annual Report to Stockholders for the
year ended December 31, 1998.
Government Regulations
Certain of the Company's products are subject to regulations of
the U.S. Food and Drug Administration (the "FDA"). These laws
and regulations require products to be developed and manufactured
in accordance with "good manufacturing practices". The laws and
regulations also require the products to be safe and effective
and require the labeling of the products to 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, if 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, and South Africa
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 the 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, the amounts are not
expected to have a material adverse effect on the Company's
operations, financial condition, or liquidity, 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. Soil and groundwater
remediation have been underway at the site since 1983. In 1989,
the U.S. Environmental Protection Agency issued a final Record of
Decision specifying the soil and groundwater remediation
activities to be conducted at the site. The Company has
completed substantially all of the required work. 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 1998 and expect to
continue its operation in 1999.
Investigations on the property are continuing. During 1998, two
additional areas of soil requiring remediation were identified.
Work on one area was completed in 1998. Work on the second area
should be completed in 1999. 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, financial position, or liquidity. However,
there can be no assurance that further investigation will not reveal
additional soil or groundwater contamination or result in additional
costs.
Employee Relations
As of December 31, 1998, the Company had approximately 7,300
employees located in the United States and approximately 2,700
employees 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 16, "BUSINESS SEGMENT
INFORMATION" of the Consolidated Financial Statements of the
Company's Annual Report to Stockholders for the year ended
December 31, 1998.
Forward Looking Statements
This 10-K report and its exhibits contain forward-looking
statements, including among other items, statements regarding the
potential growth of the Company's markets, the position of the
Company's products in those markets, and the expected results of
the Company's marketing strategies. These forward-looking
statements are based on the Company's expectations and are
subject to a number of risks and uncertainties, some of which are
beyond the Company's control. Actual outcomes could differ from
those anticipated by these forward-looking statements as a result
of a number of factors, including, among other things, the impact
of economic conditions in Europe and Asia, government cost
containment initiatives, reduction in potential market as a
result of consolidation among customers, introduction of
competitive systems or products, and the actual extent and timing
of cost savings.
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. 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; Mexico; Japan; Brazil; Australia; Argentina
Venezuela and Hong Kong.
Part of 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. The Company's principal
distribution locations are in Brea and Fullerton, California;
Chaska, Minnesota; Somerset, New Jersey; Frankfurt, Germany; and
Paris, France. The Company's European Administration Center is
located in Nyon, Switzerland.
The Company owns the facilities located in Carlsbad, Fullerton,
and Porterville, California; Naguabo, Puerto Rico; and some of
the facilities in Hialeah, Florida. All of the other facilities
are leased. All manufacturing facilities located outside of the
U.S. are leased with the exception of Germany, France, Japan,
Brazil and Australia. In October 1998, the Company announced
that it was relocating the reagent manufacturing operations
conducted in San Diego, California and Naguabo, Puerto Rico to
the Carlsbad, California and Chaska, Minnesota facilities. These
relocations are expected to be completed by the end of 1999.
The Brea and Palo Alto, California; Miami, Florida; and Chaska,
Minnesota facilities previously were owned by the Company. On
June 25, 1998, the Company sold the four properties. At the same
time, the Company entered into long-term ground leases for the
California and Minnesota properties and Coulter entered into a
long-term ground lease for the Miami property. The initial term
of each of the leases is twenty years, with options to renew for
up to an additional thirty years. The aggregate proceeds from
the sale of the four properties (paid in cash at closing) totaled
$242.8 million before closing costs and transaction expenses.
These proceeds were used to reduce the debt incurred in financing
the acquisition of Coulter.
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 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 its operations,
financial position, or liquidity. However, no assurance can be given
as to the ultimate outcome with respect to such lawsuits. The resolution
of such lawsuits could be material to the Company's operating
results for any particular period, depending upon the level of
income for such period.
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 1998.
Executive Officers of the Company
The following is a list of the executive officers of the Company
as of February 4, 1999, 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.
John P. Wareham, 57, Chairman of the Board, President and
Chief Executive Officer
Mr. Wareham has been Chairman of the Board since February, 1999,
Chief Executive Officer since September 1998, and President of the
Company since 1993. He served as the Company's Chief Operating
Officer from 1993 to September 1998 and as 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 Health Industry Manufacturers Association.
Mr. Wareham has been a director of the Company since 1993.
Albert R. Ziegler, 60, Senior Vice President, Diagnostics Commercial
Operations
Mr. Ziegler was named Senior Vice President, Diagnostics
Commercial Operations in January, 1999. He had been Vice
President, Clinical Chemistry Division since October 1997 and
Vice President, Diagnostics Development Center 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.
Edgar E. Vivanco, 55, Senior Vice President, Diagnostics Development and
Corporate Manufacturing
Mr. Vivanco was named Senior Vice President, Diagnostics
Development and Corporate Manufacturing in January, 1999. He had
been President of Coulter Corporation and Vice President of the
Cellular Analysis Division since November 1997, and previously
was Vice President of the Biotechnology Development Center. Mr.
Vivanco joined Beckman in 1971 as a microbiologist at the
Microbics Operations in La Habra, California. In 1973, he moved
to Carlsbad as a Development Microbiologist and became Production
Manager in 1975, Manufacturing Manager in 1978, and Site Manager
in 1986. In 1987, he became Technical Operations Manager for the
Diagnostics Operations and in 1990, became Director of Worldwide
Reagents and Chemical Processing.
Dennis K. Wilson, 63, Vice President, Finance and Chief Financial Officer
Mr. Wilson has been Vice President, Finance and Chief 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.
Jack Finney, 60, Vice President, Bioresearch Division
Mr. Finney has been Vice President, Bioresearch Division since
1997. He first joined the Company in 1962 as a customer service
specialist, became product line manager in 1965 and marketing
manager in 1971 at Beckman's Spinco Division in Palo Alto,
California. He became Manager in 1981 of Altex Scientific
Operations in Berkeley, California and in 1985 Vice President and
Manager of the Altex Division in San Ramon, California. In 1991,
he was named Vice President of Product Development for the Spinco
Business Unit, and in 1994, was assigned overall responsibility
for the centrifuge business.
James T. Glover, 48, Vice President and Controller
Mr. Glover has been Vice 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 LLP and another Fortune 500 Company.
William H. May, 56, Vice President, General Counsel and Secretary
Mr. May has been Vice President, General Counsel and Secretary of
the Company since 1985 and has been General Counsel and Secretary
of the Company since 1984. Mr. May first joined the Company in 1976.
Fidencio Mares, 52, Vice President, Human Resources and Corporate
Communications
Mr. Mares was named Vice President, Human Resources and Corporate
Communications 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.
Paul Glyer, 42, Treasurer
Mr. Glyer has been Treasurer of the Company since 1993. From 1995
to 1998 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.
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters
As of January 22, 1999 there were approximately 7,614 holders of record of
the Company's common stock. During 1998 the Company paid three consecutive
quarterly dividends of fifteen cents per share of common stock, and one
dividend of sixteen cents per share, for a total of sixty-one
cents per share for the year. During 1997, the Company paid four
consecutive quarterly dividends of fifteen cents per share of
common stock, for a total of sixty cents 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. Additional 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, 1998.
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, 1998.
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
"MANAGEMENT'S DISCUSSION AND ANALYSIS" of the Company's Annual
Report to Stockholders for the year ended December 31, 1998.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Information with respect to the above-captioned Item is
incorporated by reference to the section entitled "FINANCIAL RISK
MANAGEMENT" of the Company's Annual Report to Stockholders for
the year ended December 31, 1998.
Item 8. Financial Statements and Supplementary Data
Information with respect to the above-captioned Item is
incorporated by reference to the sections entitled "FINANCIAL
REVIEW", "CONSOLIDATED BALANCE SHEETS", "CONSOLIDATED STATEMENTS
OF OPERATIONS", "CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
EQUITY", "CONSOLIDATED STATEMENTS OF CASH FLOWS", "QUARTERLY
INFORMATION", "INDEPENDENT AUDITORS' REPORT" and the notes to
these sections of the Company's Annual Report to Stockholders for
the year ended December 31, 1998.
Item 9. Changes In and Disagreements With Accountants On Accounting and
Financial Disclosures
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 8, 1999 entitled "ELECTION OF
DIRECTORS" and "ADDITIONAL INFORMATION ABOUT BOARD OF DIRECTORS."
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 8, 1999 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 8, 1999 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 8, 1999 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 obtained 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).
3.3 Fourth Restated Certificate of Incorporation dated April 2,
1998 (incorporated by reference to Exhibit 3 of the
Company's Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarter ended March 31,
1998, 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 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).
4.5 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).
4.6 Amendment 1998-1 to the Company's Employees' Stock Purchase
Plan dated December 9, 1998.
4.7 Stockholder Protection Rights Agreement dated as of February
4, 1999 (incorporated by reference to Exhibit 4 of the
Company's Form 8-K filed with the Securities and Exchange
Commission on February 8, 1999, File No. 99523266).
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 Agreement dated as of June 26, 1998 and Line
of Credit Promissory Note in favor of Mellon Bank, N.A.,
dated as of March 25, 1998.
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
10.31 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 (incorporated by
reference to Exhibit 10.7 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).
* 10.8 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.
* 10.9 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).
* 10.10 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.
* 10.11 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).
* 10.12 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).
* 10.13 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).
* 10.14 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).
* 10.15 The Company's Supplemental Pension Plan, adopted by the
Company October 24, 1990 (incorporated by reference to
Exhibit 10.4 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K for the
fiscal year ended December, 31 1990, File No. 001-10109).
* 10.16 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).
* 10.17 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).
* 10.18 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.
* 10.19 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).
* 10.20 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 for the fiscal year ended December 31, 1995, File
No. 001-10109).
* 10.21 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).
10.22 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).
* 10.23 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).
* 10.24 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).
* 10.25 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).
* 10.26 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).
* 10.27 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).
* 10.28 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).
* 10.29 Form of Coulter's Special Incentive Plan and Sharing Bonus
Plan, assumed by the Company October 31, 1997 (incorporated
by reference to Exhibit 10.38 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).
10.30 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).
10.31 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).
10.32 Cross-Indemnification Agreement between the Company and
SmithKline Beckman Corporation (incorporated by reference to
Exhibit 10.1 of Amendment No. 1 to the Company's Form S-1
registration statement, File No. 33-24572).
10.33 Amendment No. 1 dated April 3, 1998 to the Credit Agreement
by and among the Company, as borrower, the Initial Lenders
and the Issuing Banks named therein, and Citicorp USA, Inc.
as Agent dated October 31, 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
quarter ended March 31, 1998, File No. 001-10109).
* 10.34 Amendment No. 1998-1, adopted and effective as of April 2,
1998 to the Company's 1998 Incentive Compensation Plan
(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 quarter ended March 31, 1998, File No.
001-10109).
* 10.35 1998 Annual Incentive Plan (AIP) (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
quarter ended March 31, 1998, File No. 001-10109).
10.36 Lease Agreement made as of June 25, 1998 among Beckman
Coulter, Inc., NPDC-EY Brea Trust, and NPDC-RI Brea Trust
(incorporated by reference to Exhibit 2.5 of the Company's
current report on Form 8-K filed with the Securities and
Exchange Commission on July 9, 1998, File No. 001-10109).
10.37 Lease Agreement made as of June 25, 1998 between Beckman
Coulter, Inc., and Cardbeck Chaska Trust (incorporated by
reference to Exhibit 2.6 of the Company's current report on
Form 8-K filed with the Securities and Exchange Commission
on July 9, 1998, File No. 001-10109).
10.38 Lease Agreement made as of June 25, 1998 between Coulter
Corporation and Cardbeck Miami Trust (incorporated by
reference to Exhibit 2.7 of the Company's current report on
Form 8-K filed with the Securities and Exchange Commission
on July 9, 1998, File No. 001-10109).
10.39 Lease Agreement made as of June 25, 1998 among Beckman
Coulter, Inc., NPDC-EY Palo Alto Trust, and NPDC-RI Palo
Alto Trust (incorporated by reference to Exhibit 2.8 of the
Company's current report on Form 8-K filed with the
Securities and Exchange Commission on July 9, 1998, File No.
001-10109).
10.40 Lease Modification Agreement made as of June 25, 1998 among
Beckman Coulter, Inc., NPDC-EY Brea Trust, and NPDC-RI Brea
Trust (incorporated by reference to Exhibit 2.9 of the
Company's current report on Form 8-K filed with the
Securities and Exchange Commission on July 9, 1998, File No.
001-10109).
10.41 Lease Modification Agreement made as of June 25, 1998 among
Beckman Coulter, Inc. and Cardbeck Chaska Trust
(incorporated by reference to Exhibit 2.10 of the Company's
current report on Form 8-K filed with the Securities and
Exchange Commission on July 9, 1998, File No. 001-10109).
10.42 Lease Modification Agreement made as of June 25, 1998 among
Coulter Corporation and Cardbeck Miami Trust (incorporated
by reference to Exhibit 2.11 of the Company's current report
on Form 8-K filed with the Securities and Exchange
Commission on July 9, 1998, File No. 001-10109).
10.43 Lease Modification Agreement made as of June 25, 1998 among
Beckman Coulter, Inc., NPDC-EY Palo Alto Trust, and NPDC-RI
Palo Alto Trust (incorporated by reference to Exhibit 2.12
of the Company's current report on Form 8-K filed with the
Securities and Exchange Commission on July 9, 1998, File No.
001-10109).
10.44 Guaranty of Lease, executed as of June 25, 1998, by Beckman
Coulter, Inc. for the benefit of Cardbeck Miami Trust
(incorporated by reference to Exhibit 2.13 of the Company's
current report on Form 8-K filed with the Securities and
Exchange Commission on July 9, 1998, File No. 001-10109).
* 10.45 The Company's Amended and Restated Executive Deferred
Compensation Plan dated October 28, 1998, effective as of
September 1, 1998 (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 December 18,
1998, Registration No. 333-69249).
* 10.46 The Company's Amended and Restated Executive Restoration
Plan dated October 28, 1998, effective as of September 1,
1998 (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 December 18,1998,
Registration No. 333-69251).
* 10.47 The Company's Amended and Restated Savings Plan dated
December 24, 1998, effective as of September 1998
(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 February 10, 1999, Registration
No. 333-72081).
* 10.48 Amendment 1998-1, adopted and effective as of April 2, 1998
to the Company's 1998 Incentive Compensation Plan
(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 March 31, 1998,
File No. 001-10109)
11. Statement regarding computation of per share earnings: This
information is incorporated by reference to the discussions
of "Earnings (Loss) Per Share" located in Notes 1 and 15 of
the Consolidated Financial Statements of the Company's
Annual Report to Stockholders for the year ended December
31, 1998.
13. WORDS ON NUMBERS
21. Subsidiaries.
23. Consent of KPMG LLP
24. Power of Attorney (included herein on the signature page).
27. Financial Data Schedule.
(b) Reports on Form 8-K During Fourth Quarter ended December 31, 1998.
The following reports on Form 8-K were filed since September 30,
1998
Item 5. Other Events. Stockholder Protection Rights Agreement
dated as of February 4, 1999 filed February 8, 1999
Beckman Coulter, Inc.
INDEX TO
FINANCIAL STATEMENTS AND SCHEDULES
The consolidated financial statements of the Company and the
related report of KPMG LLP, dated January 22, 1999 are
incorporated by reference to the section entitled "WORDS ON
NUMBERS" filed as Exhibit 13 to this Form 10-K.
The information required to be reported in the Supplementary
Financial Schedule entitled, II Valuation and Qualifying Accounts
Accounts, for the three year period ended December 31, 1998 is
set forth in Note 17 Supplementary Information of the "NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS" of the Company's Annual Report
to Stockholders for the year ended December 31, 1998. 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 COULTER, INC.
By JOHN P. WAREHAM
John P. Wareham
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints John P.
Wareham, Dennis K. Wilson, William H. May, Paul Glyer and James
T. Glover, and each of them, as his or her true and lawful
attorneys-in-fact and agents with full power of substitution and
resubstitution, for him or her and in his or her name, place and
stead, in any and all capacities, to sign any or all amendments
to this Annual Report on Form 10-K, and to file the same, with
all exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the foregoing, as
fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or their
substitutes, may lawfully do or cause to be done by virtue hereof.
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
- --------- ----- ----
JOHN P. WAREHAM Chairman of the Board, President February 4, 1999
John P. Wareham and Chief Executive Officer
D. K. WILSON Vice President, Finance and Chief February 4, 1999
Dennis K. Wilson Financial Officer
(Principal Financial Officer)
JAMES T. GLOVER Vice President and Controller February 4, 1999
James T. Glover (Principal Accounting Officer)
HUGH K. COBLE Director February 4, 1999
Hugh K. Coble
CAROLYN K. DAVIS Director February 4, 1999
Carolyne K. Davis, Ph.D.
Signature Title Date
- --------- ----- ----
PETER B. DERVAN Director February 4, 1999
Peter B. Dervan, Ph.D.
RONALD W. DOLLENS Director February 4, 1999
Ronald W. Dollens
CHARLES A. HAGGERTY Director February 4, 1999
Charles A. Haggerty
GAVIN HERBERT Director February 4, 1999
Gavin S. Herbert
VAN B. HONEYCUTT Director February 4, 1999
Van B. Honeycutt
WILLIAM N. KELLEY Director February 4, 1999
William N. Kelley, M.D.
C. RODERICK O'NEIL Director February 4, 1999
C. Roderick O'Neil
BETTY WOODS Director February 4, 1999
Betty Woods
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------ -------
4.6 Amendment 1998-1 to the Company's Employees' Stock Purchase Plan
dated December 9, 1998.
10.3 Line of Credit Agreement dated as of June 26, 1998 and Line of
Credit Promissory Note in favor of Mellon Bank, N.A., dated as of
March 25, 1998
13. WORDS ON NUMBERS
21. Subsidiaries
23. Consent of KPMG Peat Marwick LLP
27. Financial Data Schedule