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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, 2000
COMMISSION FILE NUMBER 001-10109
BECKMAN COULTER, INC.
4300 N. HARBOR BOULEVARD, FULLERTON, CALIFORNIA 92834-3100 (714) 871-4848
(PRINCIPAL EXECUTIVE OFFICES)
DELAWARE 95-104-0600
STATE OF INCORPORATION I.R.S. EMPLOYER IDENTIFICATION NO.
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
COMMON STOCK, $.10 PAR VALUE NEW YORK STOCK EXCHANGE
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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 15, 2001: $2,278,596,249.38.
Common Stock, $.10 par value, outstanding as of January 15, 2001:
59,766,459 shares.
Documents incorporated by reference in this report:
Documents incorporated...................................... Form 10-K Part Number
Those portions of the Annual Report to
Stockholders for the fiscal year ended
December 31, 2000 referenced herein....................... Part I and Part II
Proxy Statement for the 2001 Annual
Meeting of Stockholders to be held on
April 5, 2001............................................. Part III
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BECKMAN COULTER, INC.
PART I
ITEM 1. BUSINESS
OVERVIEW
Beckman Coulter simplifies and automates laboratory processes used in all
phases of the battle against disease. The company designs, manufactures, and
markets systems which consist of instruments, chemistries, software, and
supplies that meet a variety of laboratory needs. Its products are used in a
range of applications, from instruments used for pioneering medical research,
clinical trials and drug discovery to diagnostic tools found in hospitals and
physicians' offices. Beckman Coulter competes in market segments that total
approximately $31 billion in annual sales worldwide and currently has products
which address approximately half of that market.
Beckman Coulter's product lines include virtually all blood tests routinely
performed in hospital laboratories and a range of systems for medical and
pharmaceutical research. The Company has more than 125,000 systems operating in
laboratories around the world, with approximately two-thirds of annual revenues
coming from after-market customer purchases of operating supplies, chemistry
kits, and service. Beckman Coulter markets its products in approximately 130
countries, with approximately 45% of revenues coming from outside the United
States.
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.
COMPANY HISTORY
Beckman Coulter adopted its current name in April, 1998. The name change
followed the October, 1997 acquisition of Coulter Corporation by what was then
Beckman Instruments, Inc.
Beckman Instruments, Inc. was founded by Dr. Arnold O. Beckman in 1935, and
entered the laboratory market by introducing the world's first pH meter. Beckman
Instruments became a publicly-traded corporation in 1952. In 1968, Beckman
Instruments expanded its laboratory instrument focus to include healthcare
applications in clinical diagnostics. Beckman Instruments was acquired by
SmithKline Corporation to form SmithKline Beckman Corporation in 1982. It was
operated as a subsidiary of SmithKline Beckman until 1989 when it was divested.
Since that time, Beckman Instruments, now Beckman Coulter, Inc., has operated as
a fully independent, publicly-owned company.
Coulter Corporation was founded by Wallace and Joseph Coulter in 1958.
Coulter 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 BIOMEDICAL CONTINUUM
The two primary segments which Beckman Coulter serves are the clinical
diagnostics market and the life science research market. Beckman Coulter'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).
Beckman Coulter's life science research customers include universities
conducting academic research, medical research laboratories, pharmaceutical
companies, and biotechnology firms. Beckman Coulter's customers are continually
searching for processes and systems that can perform tests faster, more
efficiently and at lower costs. Beckman Coulter believes that its focus on
automated, high-throughput systems positions it to capitalize on this need.
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From complex DNA sequencing to simple one-use diagnostic screening kits,
Beckman Coulter is one of the largest companies devoted solely to biomedical
testing. Beckman Coulter serves the estimated $31 billion biomedical testing
market with core competencies in technology, applications, distribution and
service. The Company leverages its investment in research and development to
create a range of systems that integrate instruments, software and chemistries
for use across the spectrum of biomedical testing.
Breakthrough medical research and drug discovery are currently high growth
markets, thanks to advances in genomics. With the rough map of the human genome
complete, the work that will more directly affect patient care begins as
researchers incorporate this information into specific studies to improve
therapeutics. All of Beckman Coulter's Life Science Research products play a
role in the biomedical research and development testing area. These systems help
researchers understand disease by simplifying and automating key testing
processes.
Universities and medical research laboratories represent about 46% of the
market for this type of testing. These groups perform basic medical research to
further understand the molecular basis of disease. Biotechnology firms and
pharmaceutical companies represent the other 54% of the biomedical research
market. They rely on Beckman Coulter's instrument systems to speed the long and
detailed drug discovery process.
More than 75,000 Beckman Coulter systems operate in life science labs
today. The Company is a technological leader in robotic automation/liquid
handling, centrifugation and capillary electrophoresis. Research and development
testing is estimated to be an $8 billion market.
Once new therapeutics and vaccines emerge from the research phase, they
move into clinical trials to evaluate their effectiveness. In this stage,
standard blood chemistry tests are run on patients regularly. At the same time,
specialized tests are performed, based on the particular disease state under
evaluation.
As new diagnostic technologies move from research applications into more
general patient use, they are often performed in private laboratories or
university hospitals. Genetic testing, cancer monitoring and special immune
system testing fall into this category. Beckman Coulter has a menu of more than
1,000 flow cytometry tests currently used in researching, diagnosing and
monitoring diseases such as leukemia, HIV, and various cancers. They are also
critical in the evaluation of bone marrow and other transplants. The P/ACE(TM)
Series capillary electrophoresis technology is being used in some regions of the
world for genetic mutation screening, hemoglobin variant analysis, and drug
screening. The same technology also is used to monitor critical amino acids. The
market for specialty testing is estimated to be $3 billion.
Once diagnostic technologies become generally accepted, they become part of
routine patient care. Physicians order tests such as cholesterol, glucose, and
complete blood cell counts on a daily basis. These tests are used to provide
information for diagnosis and to help monitor the efficacy of therapy. Beckman
Coulter has one of the broadest product lines available to the diagnostic
laboratory. This product breadth allows the Company to provide a systems
approach to improving total laboratory productivity. The Company's systems can
perform nearly 100% of the tests routinely performed on patient samples in the
hospital laboratory. Beckman Coulter has top market positions in hematology,
hemostasis, and routine chemistry testing. It is also a leader in providing
progressive automation solutions that help labs speed test results, lower labor
expenses, ensure the quality of testing and reduce overall healthcare costs.
Beckman Coulter is also active in point-of-care testing. These tests are
used for rapid diagnosis or on-going patient monitoring. Some tests, such as
CBCs (complete blood counts) are performed on analyzers designed for quick,
single sample results. Other tests are disposable, one-use tests to screen for
pregnancy, infectious disease, ulcer-causing bacteria and indications of cancer.
The patient care testing market is estimated to be $20 billion.
The clinical diagnostics and life science research markets both have
significant barriers to entry. One major barrier is the research and development
investment and technical infrastructure required to develop products that
require the integration of chemistry, engineering, cellular analysis, and
computer sciences. In addition, it is necessary to have an extensive worldwide
distribution infrastructure with highly qualified personnel to provide sales,
service, customer training, and technical product support. Also, in some cases,
permission to market clinical diagnostics products must be obtained in the
United States and other countries.
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Nevertheless, both the clinical diagnostics and the life science research
markets are highly competitive. Beckman Coulter encounters significant
competition in each market from many domestic and international manufacturers.
Also, the clinical diagnostics market continues to be unfavorably impacted by
global health care cost containment policies, while the life science research
market continues to be affected by consolidation of pharmaceutical companies and
governmental constraints on research and development spending, primarily outside
of the United States.
Consolidation also is a key factor affecting the clinical diagnostics
market. Attempts to lower costs and increase efficiencies have led to
consolidation among healthcare providers in the United States. One result of
this consolidation is the formation of 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 Beckman Coulter'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, healthcare spending, and physician practice. As a
result of the cost containment pressures and other factors described above,
Beckman Coulter expects both markets to grow in the low single digits over the
short term. In the long term, Beckman Coulter expects worldwide healthcare
expenditures for diagnostic testing to increase, primarily as a result of
growing demand for services generated by the aging of the world population,
increasing expenditures on diseases requiring costly treatment (for example,
diabetes, AIDS and cancer), and expanding demand for improved healthcare
services in developing countries.
PRODUCTS
Beckman Coulter offers a wide range of instrument systems and related
products, including reagents, consumables, accessories, and support services in
both the clinical diagnostics and the life science research segments. 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
2000 1999 1998
---- ---- ----
Clinical Diagnostics............................ 78 78 78
Life Science Research........................... 22 22 22
CLINICAL DIAGNOSTICS PRODUCTS OVERVIEW
The clinical diagnostics market encompasses the detection and monitoring of
disease by means of laboratory evaluation and analysis of bodily fluids, cells,
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 the 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.
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IVD systems are composed of instruments, reagents, consumables, service and
data management systems. They automate repetitive manual tasks, improve test
accuracy, and speed the reporting of results. Instruments typically have a five-
to ten-year life. 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
reduce customer costs through automation.
Beckman Coulter believes that the most important criteria customers use to
evaluate IVD systems are operating costs, reliability, reagent quality and
service. It also believes that by providing a fully integrated system that is
cost effective, reliable and easy to use, it builds loyalty among customers who
value consistency and accuracy in test results.
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 $20 billion in 1999 and is estimated to grow
at a 4% compound annual rate through the year 2002. Beckman Coulter 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. Beckman Coulter divides the market into three major broad
subcategories -- clinical chemistry, immunodiagnostics, and cellular analysis.
It also offers products in areas it identifies as primary care (primarily
physician offices and clinics), hemostasis, and flow cytometry.
CLINICAL CHEMISTRY SYSTEMS
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. Beckman Coulter 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. Beckman
Coulter 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 Beckman
Coulter's clinical chemistry systems. These products range in price from $45,000
to over $300,000.
Beckman Coulter's line of SYNCHRON(R) Automated General Chemistry Systems
is a family of products which include modular automated diagnostic instruments
and the reagents, standards and other consumable products required to perform
commonly requested diagnostic tests. The SYNCHRON systems were 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 is the SYNCHRON CX(R)3 (DELTA)
Analyzer. It is designed to perform a number of the tests routinely ordered by
physicians and has up to nine on-board chemistries. The SYNCHRON CX(R)4, CX(R)5,
CX(R)7, CX(R)7 RTS, CX(R)9 ALX, and SYNCHRON LX(R)20 Analyzers are random access
systems designed to perform routine chemistry profiles as well as some special
chemistry profiles, and can perform over 85% of the laboratory's general
chemistry testing requirements.
IMMUNODIAGNOSTIC SYSTEMS
Immunodiagnostic 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 immunodiagnostic
systems use antibodies and antigens as the central component in analytical
reactions.
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Antibodies are created by an 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. Immunodiagnostic 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. Beckman Coulter
offers over 60 immunodiagnostic test kits for individual analytes. These
automated systems range in price from $60,000 to $90,000.
Beckman Coulter's two primary immunodiagnostic systems are the IMMAGE(R)
Immunochemistry System and the Access(R) Immunoassay System. The IMMAGE system
is a high throughput immunochemistry 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 predecessors, the Array(R), Array(R) 360, and Array(R)
360CE Protein and Therapeutic Drug Monitoring Systems. The Array 360CE 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 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.
During 2000, Beckman Coulter introduced its Access(R) Hybritech(R) PSA and
Access(R) Hybritech(R) free PSA blood tests. These tests were the first PSA and
free PSA pairing of automated tests to receive FDA approval as an aid in the
detection of prostate cancer. These product introductions were followed by FDA's
clearance of the Company's Access(R) OSTASE(R) blood test as the first automated
serum-based assay as an aid in the management of osteoporosis and Paget's
disease.
Electrophoresis systems provide analytical information by using an
electrical charge to separate a sample into its various components. The presence
or absence of various components as well as the relative concentrations of each
provide diagnostic information. The relative concentration of each component is
determined by scanning the test result using a densitometer. Beckman Coulter
sells a variety of manual and automated electrophoresis tests under the name
Paragon(R) Systems. The manual Paragon(R) Electrophoresis Systems allow Beckman
Coulter to offer a full range of electrophoresis products that provide
specialized protein analysis for clinical laboratories. These products use a gel
based material as the separation medium. Paragon reagent kits are used in the
diagnosis of diabetes, as well as cardiac, liver and other diseases. The
APPRAISE(R) Densitometer is used in conjunction with Paragon reagent kits. The
Paragon CZE(R) 2000 System is the first capillary electrophoresis system
specifically designed for the clinical laboratory. 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.
Beckman Coulter also sells a number of manual immunodiagnostic tests.
Paramount among these products are tests for prostate specific antigen (PSA) and
free PSA. The PSA test is utilized as an aid in the detection (in conjunction
with digital rectal examination) and monitoring of prostate cancer. The free PSA
test is used in conjunction with Beckman Coulter's PSA test to assist in
determining which patients require further testing and evaluation. Another
manual immunochemistry 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.
CELLULAR ANALYSIS SYSTEMS
Beckman Coulter'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 flow 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
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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.
Beckman Coulter's hematology product line is structured to address the
differing requirements of the high, medium, and low volume portions of this
market. 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 their near native integrity throughout the analysis. The systems in
the lower volume segment rely exclusively upon electrical aperture-impedance
technology.
Systems designed for the high volume segment include the COULTER(R)
GEN*S(TM) CELL and the COULTER(R) STKS(TM) Hematology Systems. The GEN*S System
was introduced in 1996. It provides walkaway, whole blood analysis for CBCs,
five-part white blood cell differential, red cell morphology and reticulocyte
analysis with automated slidemaking and staining from a single aspiration of
blood. The system automates manual interpretation and result verification
through its data management workstation. The STKS is a cost-effective system
designed for high volume clinical laboratories which provides a CBC and
five-part white blood cell differential; red cell morphology and semi automated
reticulocyte analysis. These high volume hematology systems typically sell in
the $70,000 to $120,000 price range.
Moderate Volume Hematology Systems include the COULTER(R) HmX and the
COULTER(R) MAXM(TM) Hematology Systems. The HmX System was introduced in 1999.
It offers the technology features of the larger systems in a compact bench top
system designed for the moderate volume market segment. The HmX is available in
two configurations, a fully automated walkaway system and a single sample
loading system; both systems come with a data management system. The COULTER HmX
hematology system offers the same comprehensive CBC, five-part white blood cell
differential, red cell morphology and semi-automated reticulocyte analysis as
the COULTER STKS. The system uses Coulter's advanced VCS technology in an
affordable instrument for the moderate volume workload laboratory. The MAXM
hematology system is a cost effective, bench top system designed for the
moderate volume laboratory. The system utilizes Coulter's VCS technology to
produce an accurate and reliable CBC, five-part white blood cell differential
and semi-automated reticulocyte analysis. These moderate volume hematology
systems typically sell in the $40,000 to $75,000 price range.
Low-volume hematology systems include the COULTER(R) A(C)-T(TM) family of
hematology systems. The A(C)-T product range consists of four hematology
analyzers. The COULTER A(C)-T hematology analyzer, was introduced in 1996. It
offers a complete blood count. In 1998, the COULTER A(C)-T diff was released.
This product added three-part white blood differential analysis to the system.
In 1999, the COULTER(R) A(C)-T diff 2(TM) was released. The A(C)-T diff 2 system
added the safety of closed vial sampling to the CBC and three-part white blood
cell differential analysis capabilities. The COULTER(R) A(C)-T 5diff(TM) system
was introduced in 2000. This product offers the capability of CBC and five part
white cell differential using ACV technology. All of the A(C)-T series
hematology analyzers are designed to use a very small sample volume, making them
ideal for analysis of pediatric samples. These low volume hematology systems
typically sell in the range of $10,000 to $35,000.
Beckman Coulter's line of flow cytometry systems includes the COULTER(R)
EPICS(R) ALTRA(TM) HyPerSort Cell Sorting System and the COULTER(R) EPICS(R)
XL(TM) Flow Cytometer. The EPICS ALTRA Cytometer is used for advanced
diagnostics and research. It is designed to perform sophisticated cell analysis
and sorting applications using Beckman Coulter's extensive portfolio of
reagents. The EPICS ALTRA 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. The EPICS XL Cytometer is a bench top 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
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and commercial labs. The Coulter TQ-Prep(TM) provides a consistent, standardized
method for preparing whole blood for flow cytometric analysis. The Coulter
PrepPlus Workstation was introduced in 2000. The PrepPlus(TM) provides precision
pipetting of reagents and controls. Working in concert with the TQ-Prep, the
PrepPlus further simplifies and automates the pre-preparation stage of flow
cytometric analysis. These products sell for $15,000 to $300,000.
Particle characterization products are used to identify specific
characteristics (such as number, size, and relative mobility) of particles
suspended in solution. They are also used to identify characteristics such as
surface area and pore size distribution of powdered or solid materials. This
group offers over eight product lines utilizing seven different technologies to
satisfy markets such as biological research and pharmaceutical development as
well as a host of Industrial segments. With it's origins back to the Coulter
Principle, this group has evolved a large menu of solutions to satisfy customer
needs in analysis of countless materials. Two of the main product lines are the
Multisizer 3 and the Z Series. These "Coulter Counter" based instruments are
considered to be the highest resolution particle and cell size/count analyzers
in the world. They have become standardized systems in areas such as platelet
cell counting and research for body fluids. They also have uses in such
industrial processes as yeast analysis in the beer brewing industry.
Complementing these products are other high resolution instruments such as the
LS Series laser diffraction particle size analyzers. These systems are heavily
used in the pharmaceutical arena as well as general industrial applications such
as paints and cements. Other systems available offer users solutions utilizing
image analysis, surface area analysis, Zeta Potential, and membrane porosity
analysis. System prices range from $9,000 to $80,000.
HEMOSTASIS SYSTEMS
The property of circulation which maintains blood within the blood vessels
is referred to as hemostasis. The hemostatic process depends upon a delicate
balance between a system that promotes clotting and another that removes the
clots after they have formed. A defect in any part of any one of these systems
will result in an imbalance that can lead to either excessive bleeding
(hemophilia) or a propensity to clot (stroke and myocardial infarction) Beckman
Coulter offers a complete line of coagulation analyzers and their corresponding
reagents that monitor both of these systems.
Beckman Coulter is the North American distributor of the Instrumentation
Laboratory ("IL") line of hemostasis products. These hemostasis systems rely on
clotting, chromogenic and immunologic technologies to produce the detailed
information that the clinician requires to be able to make an appropriate
assessment of a patient's hemostatic system. All of these systems utilize an
optical detection method that either detects a clotting or agglutination
process, or a color change, after the appropriate reagents have been mixed with
the patient's blood.
Beckman Coulter's hemostasis product line has suitable systems to meet the
needs of a wide range of customers. These products include Instrumentation
Laboratory's ACL Advance and ELECTRA1800C Systems, which meet the challenges of
the large reference laboratories with requirements for very high volume
analyzers. Instrumentation Laboratory's ACL 9000, ACL Advance, and ACL 7000,
contain a very diverse menu of esoteric tests, which the special coagulation
laboratories require. Instrumentation Laboratory's ACL 7000, ELECTRA 1400C, ACL
1000/100 accommodate the needs of the medium to small sized laboratory.
To complement these analyzers, Beckman Coulter also offers Instrumentation
Laboratory's IL Test and Hemoliance brands of coagulation reagents. Utilizing
these products, a laboratory may perform standard screening tests such as the
activated partial thromboplastin time and prothrombin time in addition to a wide
range of special tests that can detect defects in any area of the of the
hemostatic system.
PRIMARY CARE DIAGNOSTICS
Beckman Coulter offers a number of products used in physicians' offices,
clinics, hospitals and other medical settings. These products include several
single-use self-contained diagnostic test kits, such as the Hemoccult(R) occult
blood test (OBT) and the FlexSure(R) HP test kit. The Hemoccult test is used as
an aid in screening for gastrointestinal disease, most importantly colorectal
cancer, and is the number one seller in the colorectal screening market. The
FlexSure HP test is used as an aid in the diagnosis of H. pylori infection,
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which is associated with several gastrointestinal diseases, including peptic
ulcers and gastric cancer. In addition, Beckman Coulter markets the ICON(R) line
of test kits, featuring a high sensitivity pregnancy test widely used by health
care practitioners.
LIFE SCIENCE RESEARCH PRODUCTS OVERVIEW
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. Beckman Coulter estimates that in 1999
the total market for instruments and related biochemicals and supplies used
primarily for life science research was approximately $10.6 billion. Beckman
Coulter focuses on customers doing research in university and medical school
labs, research institutes, government labs, and biotechnology and pharmaceutical
companies. The market for life science research instruments and related
biochemicals and supplies used by these customers in 1999 was approximately $8.1
billion. The products which Beckman Coulter provides to serve these customers
include centrifuges, liquid handling robotic workstations, capillary
electrophoresis, DNA sequencers, DNA synthesis, spectrophotometers, HPLC
systems, and liquid scintillation counters. Trends in the life science research
market include the growth in funding for genetic analysis and drug discovery
research coupled with an increasing demand for automation and efficiency in high
throughput processes.
Beckman Coulter divides its life science research products into two broad
categories -- robotic automation and genetic analysis, and centrifugation and
analytical systems.
ROBOTIC AUTOMATION AND GENETIC ANALYSIS PRODUCTS
Beckman Coulter's products are used in many parts of the drug discovery
process. An important application for the robotic automation products is in
primary screening. The primary screen is done to test libraries of compounds for
possible interaction with a target protein, which is associated with a disease
state. High-throughput screening is a term that is often used to describe the
primary screen, which can involve the screening of 100,000 or more compounds.
Secondary screening and pre clinical testing can also require samples to be
processed in an automated or high-throughput mode.
The Human Genome Project, the SNP Consortium, and a host of "gene hunter"
companies are currently providing valuable genetic information to pharmaceutical
companies that allows the pharmaceutical company to select relevant target
proteins. The analysis of massive amounts of genetic information also requires
the automation of sample processing in order to meet the aggressive timetables
which have been established for some projects.
DNA sequencers allow researchers to determine a nucleic acid sequence
through an electrophoretic separation. DNA synthesizers provide an essential
component, primers, for many molecular biology reactions. These techniques are
central to molecular biology and the understanding of the genetic component of
life processes. Beckman Coulter's primary entry in the DNA sequencing field is
its CEQ(TM) 2000XL DNA Analysis System, which was introduced in 2000. This
system uses capillary electrophoresis technology along with Beckman Coulter's
proprietary linear polyacrylamide gel to obtain large reads of genetic code in
less time. DNA analysis systems sell in the range of $80,000 to $120,000.
SNPs are variations in genetic code that can predispose people to certain
illnesses and cause unique responses to treatment. Scientists hope these
variations will help them to understand how and when the genetic variations are
manifested differently in chronic conditions like asthma, diabetes, heart
disease, and cancer. Beckman Coulter has collaborated with companies such as
Third Wave Technologies, Orchid BioSciences, and Sequenom to develop new methods
for faster SNP detection which rely on products such as Beckman Coulter's
Biomek(R) Automated Workstations and Sagian(TM) Core systems to streamline the
task. These products provide customers with the means to perform low-cost,
automated assay development as well as accurate analysis of tens of thousands
human genetic variations.
Liquid handling robotic workstations and integrated systems automatically
perform exacting and repetitive processes in biotechnology and drug discovery
laboratories. Operations include the dispensing,
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measuring, dilution and mixing of samples and analysis of reactions as well as
robotic manipulation of samples. Key products in this area are Beckman Coulter's
Sagian(TM) Core Systems and Biomek(R) FX workstation, which was introduced in
2000. These products help biotechnology and pharmaceutical firms substantially
reduce the time to market for new drugs by allowing them to process assays 24
hours a day. These systems use sophisticated scheduling and data handling
software. In 2000, Beckman Coulter signed distribution agreements with Cellomics
and Promega to sell their specialized products in concert with its automation
systems. Prices range from $50,000 to $500,000.
CENTRIFUGATION AND ANALYTICAL SYSTEMS
Beckman Coulter offers a wide range of life science research systems that
are used to advance basic understanding of life processes. Much of this basic
research is done in university and medical school labs, research institutes and
government labs. The same research systems are also used for applied research in
pharmaceutical and biotechnology companies. Product categories include
centrifuges, flow cytometers, high performance liquid chromatography ("HPLC"),
capillary electrophoresis, spectrophotometers and liquid scintillation counters.
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. Centrifuge models range from
small table top units, such as the Microfuge(R) line of products to larger,
free-standing units, such as the Avanti(R) J Series. During 2000, Beckman
Coulter introduced its Avanti J-20XP high performance centrifuge, which is used
for processing large-volume samples. Centrifuges are 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 similar
to those used in clinical applications and sell in the $70,000 to $400,000
range.
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.
Beckman Coulter focuses on biologically related applications and sells a variety
of products under the System Gold(R) name. These systems range in price from
$20,000 to $50,000.
Beckman Coulter also provides specialized software that is capable of
recording, manipulating and archiving data from multiple chromatographic
systems, and other instruments. This type of software is essential to the
pharmaceutical production 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. Beckman Coulter
has systems for basic research, pharmaceutical methods development, and quality
control. These systems are based on the P/ACE(TM) Series platform. Capillary
electrophoresis systems sell in the range of $30,000 to $90,000.
Spectrophotometry is the optical measurement of compounds in liquid
mixtures. Monitoring biological reactions is a typical application for this
technology. Beckman Coulter's DU(R) series of 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.
Researchers often insert radioactive atoms into compounds that are then
introduced into biological systems. The compounds can be traced to a specific
tissue or waste product by measuring the amount and type of radioactive label
that is present with a liquid scintillation counter. Beckman Coulter's LS(TM)
6500 Series Liquid scintillation systems sell in the $16,000 to $30,000 range.
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IMMUNOMICS
In 2000, Beckman Coulter formed its Immunomics Operations to develop and
introduce products based on a proprietary technology which allows direct ex vivo
quantitation of antigen specific T cells. Current methods for detecting these
antigen specific T cells, such as Cytotoxicity Assay, Limiting Dilution Assay
(LDA), and ELISpot, are cumbersome and convenient reagents for them have not
been available. Beckman Coulter's products, on the other hand, will be suitable
for routine laboratory use, measure all antigen specific cells, and allow
multiparametric flow analysis for functional determinations.
This line of products -- called iTAg(TM) MHC Tetramers -- will bridge both
the life science research and clinical diagnostics markets. Initially, they will
include standard research products and custom products designed to meet the
needs of researchers measuring the response to specific peptides. Performed on
flow cytometers, these cellular immune response tests can be used in a variety
of clinical research activities, such as in clinical trials to quickly determine
if new vaccines or therapies are creating the appropriate response in the body.
Ultimately, Beckman Coulter anticipates that complementary in vitro diagnostic
tests will be developed using the same technology.
COMPETITION
The markets for Beckman Coulter'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
(Diagnostics Division), Bayer/Chiron, Dade International/Behring Diagnostics
Division, Becton Dickinson and Company, Johnson & Johnson (Ortho Diagnostics
Division), Roche (Roche Boehringer Mannheim Diagnostics Division) Diagnostica
Stago and Sysmex Corporation of America (a subsidiary of TOA Medical Electronics
Co. Ltd.).
Competitors focused more directly in the life science research market
include, Agilent Technologies, Amersham Pharmacia Biotech p.l.c., Becton
Dickinson, Bio-Rad Laboratories, Inc., Hitachi, Packard BioScience Company,
Jouan, Kendro Laboratory Products, Applied Biosystems, Shimadzu, Tecan, and
Waters Corporation. Some of these competitors are divisions or subsidiaries of
corporations with substantial resources. In addition, Beckman Coulter competes
with several companies that offer reagents, consumables and service for
laboratory instruments that are manufactured by Beckman Coulter and others.
RESEARCH AND DEVELOPMENT
Beckman Coulter'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. Beckman
Coulter'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. Beckman Coulter's
research and development expenditures were $185 million in 2000, $173.4 million
in 1999 and $171.4 million in 1998.
SALES AND SERVICE
Beckman Coulter has sales in approximately 130 countries and maintains its
own marketing, service and sales forces in major markets throughout the world.
Most of Beckman Coulter's products are distributed by Beckman Coulter's sales
groups; however, Beckman Coulter employs independent distributors to serve those
markets that are more efficiently reached through such channels. In addition to
direct sales of its instruments, Beckman Coulter leases certain instruments to
its customers, principally those used for clinical diagnostic applications in
hospitals.
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Beckman Coulter's sales representatives are technically educated and
trained in the operation and application of Beckman Coulter'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 Beckman
Coulter's products. These individuals give Beckman Coulter the ability to
provide immediate after sales service and technical support, elements which 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.
Beckman Coulter's large, existing installed base of instruments makes the
required service and support infrastructure financially viable. Beckman Coulter
considers its reputation for service responsiveness and competence and its
worldwide sales and service network to be important competitive assets.
PATENTS AND TRADEMARKS
Beckman Coulter's primary trademark and trade name are "Beckman Coulter".
The company vigorously protects its primary trademark, which is used on Beckman
Coulter's products and is recognized throughout the worldwide scientific and
diagnostic community. Beckman Coulter owns and uses secondary trademarks on
various products, but none of these secondary trademarks is considered of
primary importance to the business.
To complement and protect the innovations created by Beckman Coulter's
research and development efforts, Beckman Coulter has a patent protection
program which includes approximately 600 active U.S. patents and patent
applications. Of this number, approximately 235 relate to the life science
research segment and the remaining 365 relate to the clinical diagnostics
segment. Beckman Coulter also files important corresponding applications in
principal foreign countries. Beckman Coulter has taken an aggressive posture in
protecting its patent rights.
While no one patent is considered essential to the success of the business,
a number of patents relating to major product lines or which provide significant
sources of licensing revenue will expire in 2001. These include patents covering
some of the reagents used with the cellular analysis products and patents
covering certain fundamental immunoassay technologies. Some of these patents
have been the basis for substantial licensing revenues in the past.
GOVERNMENT REGULATIONS
Beckman Coulter's products and operations are subject to a number of
federal, state, local and foreign laws and regulations. It believes that its
products and operations comply in all material respects with these laws and
regulations. Although Beckman Coulter continues to make expenditures to comply
with these requirements, it does not anticipate any expenditures which would
have a material impact on Beckman Coulter's operations or financial position.
All clinical diagnostics products sold in the United States are subject to
laws and regulations administered by the United States Food & Drug
Administration ("FDA"). These laws and regulations require the products to be
safe and effective for their intended uses and to be developed and manufactured
in accordance with "good manufacturing practices". They also require the
labeling for the products to contain specified information and, in some cases,
the FDA must review and approve the quality assurance protocols specified in the
labeling. In addition, certain products must meet performance standards or
conform to other special controls adopted by the FDA, and some products are
subject to a formal premarket approval process.
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"). Beckman Coulter's major manufacturing operations and
development centers have been certified as complying with the requirements of
the appropriate ISO 9000 standard. Many of Beckman Coulter's international sales
and service subsidiaries also have been certified as complying.
The European Union also has adopted a number of "directives" that specify
requirements for medical devices and other products. Beckman Coulter's products
that are covered by these directives must comply
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with their requirements in order to be sold in the European Union. The key
directives that have been applicable to Beckman Coulter's products include those
establishing requirements for electromechanical compatibility, packaging and
packaging waste, and non-implantable medical devices. In order to comply with
these requirements, the company has taken steps such as modifying certain of its
designs, obtaining specialized test equipment, generating information about its
packaging materials, and modifying its product labeling. In 1999, the European
Union adopted a new directive establishing requirements for in vitro diagnostic
products. This directive is being phased in, beginning in June, 2000, and will
become mandatory in June, 2003.
The design of Beckman Coulter'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 series of clinical analyzers, reflects Beckman
Coulter'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, Beckman
Coulter 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. Beckman Coulter is closely
following these developments so that it may position itself to take advantage of
them. However, Beckman Coulter cannot predict the effect on its business of
these reforms should they occur nor of any other future government regulation.
ENVIRONMENTAL MATTERS
Beckman Coulter is subject to federal, state, local and foreign
environmental laws and regulations. Although Beckman Coulter continues to make
expenditures for environmental protection, it does not anticipate any
expenditures to comply with such laws and regulations which would have a
material impact on Beckman Coulter's operations or financial position. Beckman
Coulter believes that its operations comply in all material respects with
applicable federal, state, and local environmental laws and regulations.
To address contingent environmental costs, Beckman Coulter establishes
reserves when the costs are probable and can be reasonably estimated. Beckman
Coulter believes that, based on current information and regulatory requirements
(and taking third party indemnities into consideration), the reserves
established by Beckman Coulter 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 Beckman Coulter's operations, financial condition, or
liquidity, although no assurance can be given in this regard.
In 1983, Beckman Coulter 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. Beckman Coulter believes that it has completed all of
the required work and has initiated discussions with the EPA regarding the
criteria to be used in making this determination. SmithKline Beckman, Beckman
Coulter's former controlling stockholder, agreed to indemnify Beckman Coulter
with respect to this matter for any costs incurred in excess of applicable
insurance, eliminating any impact on Beckman Coulter's earnings or financial
position. SmithKline Beecham p.l.c., the surviving entity of the 1989 merger
between SmithKline Beckman and Beecham and GlaxoSmithKline p.l.c., the surviving
entity of the 2000 merger between SmithKline Beecham and Glaxo Wellcome, assumed
the obligations of SmithKline Beckman in this respect.
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In 1987, soil and groundwater contamination was discovered on property in
Irvine, California formerly owned by Beckman Coulter. In 1988, The Prudential
Insurance Company of America ("Prudential"), which had purchased the property
from Beckman Coulter, filed suit against Beckman Coulter 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, Beckman Coulter 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 Irvine 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. During 1998, two additional areas of soil requiring remediation
were identified. Work on one area was completed in 1998 and work on the second
area was completed in 1999. 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. Beckman Coulter and Prudential
continued to operate a groundwater treatment system throughout most of 1999. In
October, 1999, the Regional Water Quality Control Board agreed that the system
could be shut down. Continued monitoring will be necessary for a period of time
to verify that groundwater conditions remain acceptable.
Beckman Coulter 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 Beckman Coulter'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, 2000, Beckman Coulter had approximately 6,945 employees
located in the United States and approximately 2,575 employees in international
operations. Beckman Coulter 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 15, "BUSINESS SEGMENT INFORMATION" of the Consolidated
Financial Statements of Beckman Coulter's Annual Report to Stockholders for the
year ended December 31, 2000.
FORWARD-LOOKING STATEMENTS
This report on Form 10-K, the Company's quarterly reports on Form 10-Q, its
other SEC filings, its press releases, and its other written and oral statements
throughout the year may contain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements may be
recognized by the use of terms such as "should", "outlook", "anticipates",
"expects", and "foresees". All forward-looking statements are based on
information available and the Company's expectations at the time they are made,
and are subject to a number of risks and uncertainties, some of which are beyond
the Company's control.
1. Sales. The Company's ability to achieve its anticipated level of
sales is affected by factors such as capital spending policies and the
availability of government funding. In particular, many life science
research customers are reliant on government funding and a number of
clinical diagnostics customers rely on prompt and full reimbursement by
Medicare and equivalent programs in other countries. Sales also are
impacted by the effect of potential health care reforms, loss of market
share through aggressive competition, the rate at which new products are
introduced by the Company and its competitors, comparative pricing,
especially in areas where currency has an effect, and general economic
conditions in significant foreign countries in which we do business, such
as, Japan and Germany.
2. Earnings and Financial Results of Operations. Actual earnings may
differ from those estimated due to factors such as changes in exchange
rates between the time sales are recorded and financial statements are
prepared. Earnings also may be impacted by unanticipated increases in
interest rates on
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the portion of the Company's debt that is not fixed, thereby increasing the
Company's interest expense. Earnings per share (EPS) may be affected by the
number of shares outstanding and, with respect to diluted EPS, the number
and value of options outstanding. The effect of taxes and changes in tax
policy also may have an effect as may unanticipated increases in labor and
other costs. In recent years, consolidation among health care providers and
the formation of buying groups has put pressure on pricing. These pressures
challenge the Company's ability to maintain historical profit margins,
unless it can also obtain equivalent decreases in operating costs.
3. Products. Expected introductions of new products may be impacted by
complexity and uncertainty regarding development of new high-technology
products. In addition, the Company's ability to introduce new products and
to continue marketing existing products may be affected by patents and
other intellectual property. Introduction of new products may be affected
by delays in obtaining any government approvals necessary to market the
products, particularly in clinical diagnostics. Introduction of new
products also may be delayed due to shortages in qualified engineers,
programmers, and other key labor categories. The ability to obtain raw
materials and components, especially in the rapidly evolving electronic
components market, usually does not affect the introduction of new
products, but may affect the Company's ability to achieve anticipated
production levels.
ITEM 2. PROPERTIES
Beckman Coulter's primary instrument assembly and manufacturing facilities
are located in Fullerton, Brea, and Palo Alto, California; Chaska, Minnesota;
and Hialeah and Opa Locka, Florida. Components, parts, and electronic
subassemblies are manufactured in facilities located in Fullerton and
Porterville, California and Hialeah, Florida. An additional manufacturing
facility is located in Galway, Ireland. Reagents are manufactured in Fullerton,
Carlsbad, and Palo Alto, California; Chaska, Minnesota; Miami, Florida;
Florence, Kentucky; Galway, Ireland; Germany; France; Japan; Australia; and
China.
Part of Beckman Coulter'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
Beckman Coulter's laboratory robotics operations are conducted in leased
facilities in Indianapolis, Indiana. Beckman Coulter's principal distribution
locations are in Brea and Fullerton, California; Chaska, Minnesota; Somerset,
New Jersey; Florence, Kentucky; Frankfurt, Germany; and Paris, France. Beckman
Coulter's European Administration Center is located in Nyon, Switzerland.
Beckman Coulter owns the facilities located in Carlsbad, Fullerton, and
Porterville, California; and some of the facilities in Hialeah, Florida. All of
the other facilities are leased. The Brea and Palo Alto, California; Miami,
Florida; and Chaska, Minnesota facilities, which previously were owned by
Beckman Coulter and sold in 1998, are leased for initial terms of twenty years
with options to renew for up to an additional thirty years. All manufacturing
facilities located outside of the U.S. are leased with the exception of Germany,
France, and Japan. During 2000, as part of previously announced restructuring
activities, Beckman Coulter closed its manufacturing operations in Hong Kong,
Brazil and Argentina.
Beckman Coulter 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
Beckman Coulter and its subsidiaries are involved in a number of lawsuits
which Beckman Coulter considers ordinary and routine in view of its size and the
nature of its business. Beckman Coulter 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 Beckman Coulter's operating
results for any particular period, depending upon the level of income for such
period.
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In December 1999, Streck Laboratories, Inc. served Beckman Coulter and
Coulter Corporation with a complaint filed in the United States District Court
for the District of Nebraska. The complaint alleges that control products sold
by Beckman Coulter and/or Coulter Corporation infringe each of five patents
owned by Streck, and seeks injunctive relief, damages, attorney fees and costs.
We, on behalf of ourselves and on behalf of Coulter Corporation have answered
the complaint and have filed a counterclaim against Streck for patent
infringement. We continue to believe that there is no reasonable basis for us to
conclude that this litigation could lead to an outcome that would have a
material adverse effect on our consolidated operations or financial position.
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 2000.
EXECUTIVE OFFICERS OF BECKMAN COULTER
The following is a list of the executive officers of Beckman Coulter as of
February 2, 2001, showing their ages, present positions and offices with Beckman
Coulter 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, 59, Chairman of the Board, President and Chief Executive
Officer
Mr. Wareham is Chairman, President and Chief Executive Officer of Beckman
Coulter. He became Chairman in February 1999, Chief Executive Officer in
September 1998 and President in October 1993. He also served as Beckman
Coulter's Chief Operating Officer from October 1993 to September 1998 and as
Vice President, Diagnostic Systems Group from 1984 to 1993. Prior to 1984, he
had served as President of Norden Laboratories, Inc., a wholly owned subsidiary
of SmithKline Beckman Corporation engaged in developing, manufacturing and
marketing veterinary pharmaceuticals and vaccines, having first joined
SmithKline Corporation, a predecessor of SmithKline Beckman Corporation, in
1968. He is a director and Chairman of AdvaMed (formerly the Health Industry
Manufacturers Association), a member of the Center for Corporate Innovation, a
member of the Chief Executive Roundtable of the University of California at
Irvine, and a member of the board of Steris Corporation. He has been a director
of Beckman Coulter since 1993.
JACK FINNEY, 62, Vice President, Bioresearch Division
Mr. Finney has been Vice President, Bioresearch Division since 1997. He
first joined Beckman Coulter 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, 51, Vice President and Treasurer
Mr. Glover was named Vice President and Treasurer in December, 1999. He had
been Vice President and Controller of Beckman Coulter since 1993, and previously
Vice President, Controller -- Diagnostic Systems Group from 1989. Mr. Glover
joined Beckman Coulter 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.
AMIN I. KHALIFA, 47, Vice President and Chief Financial Officer
Mr. Khalifa has been Vice President and Chief Financial Officer since
December, 1999. He first joined Beckman Coulter in June, 1999 as Vice President,
Chief Financial Officer and Treasurer. Prior to joining
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Beckman Coulter he had been Chief Financial Officer of the Agricultural Sector
of Monsanto Company, head of Investor Relations and Strategy for Aetna, Inc.,
Senior Vice President and Chief Financial Officer of Aetna Health Plans, and
held various positions of increasing responsibility during a sixteen year career
at PepsiCo.
FIDENCIO MARES, 54, Vice President, Human Resources and Corporate Communications
Mr. Mares was named Vice President, Human Resources and Corporate
Communications of Beckman Coulter 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, 58, Vice President, General Counsel and Secretary
Mr. May has been Vice President, General Counsel and Secretary of Beckman
Coulter since 1985 and has been General Counsel and Secretary of Beckman Coulter
since 1984. Mr. May also is a member of the Board of the Arnold and Mabel
Beckman Foundation. Mr. May first joined Beckman Coulter in 1976.
EDGAR E. VIVANCO, 57, 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 Coulter 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.
ALBERT R. ZIEGLER, 62, 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 Beckman Coulter 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 in 1971.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
As of January 12, 2001 there were approximately 6,551 holders of record of
Beckman Coulter's common stock. During 2000, Beckman Coulter paid three
quarterly dividends of sixteen cents per share (eight cents per share post
split) and one quarterly dividend of seventeen cents per share (eight and
one-half cents per share post split) for a total of sixty-five cents per share
(thirty-two and one-half cents per share post split) of common stock for the
year. During 1999 Beckman Coulter paid four consecutive quarterly dividends of
sixteen cents per share of common stock, for a total of sixty-four cents per
share for the year. During 2000, Beckman Coulter also conducted a stock split in
the form of a two-for-one stock dividend distributed on December 7, 2000 to
stockholders of record on November 15, 2000. Under the terms of Beckman
Coulter'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 Beckman Coulter'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 Beckman Coulter's Annual Report to
Stockholders for the year ended December 31, 2000.
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 Beckman
Coulter's Annual Report to Stockholders for the year ended December 31, 2000.
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
Beckman Coulter's Annual Report to Stockholders for the year ended December 31,
2000.
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 Beckman
Coulter's Annual Report to Stockholders for the year ended December 31, 2000.
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
Beckman Coulter's Annual Report to Stockholders for the year ended December 31,
2000.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
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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 Beckman Coulter's
Proxy Statement for the Annual Meeting of Stockholders to be held April 5, 2001
entitled "ELECTION OF DIRECTORS" and "ADDITIONAL INFORMATION ABOUT THE 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 Beckman Coulter's Proxy
Statement for the Annual Meeting of Stockholders to be held April 5, 2001
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 Beckman Coulter's Proxy Statement for
the Annual Meeting of Stockholders to be held April 5, 2001 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
Beckman Coulter's Proxy Statement for the Annual Meeting of Stockholders to be
held April 5, 2001 entitled "ADDITIONAL INFORMATION ABOUT THE BOARD OF
DIRECTORS, 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 Beckman Coulter,
dated as of August 29, 1997 (incorporated by reference to
Exhibit 2.1 of Beckman Coulter'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 Amended and Restated By-Laws of Beckman Coulter, 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).
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20
3.2 Fifth Restated Certificate of Incorporation dated April 24,
2000 (incorporated by reference to Exhibit 3.1 of the
Company's submission on Form S-3 files with the Securities
and Exchange Commission on May 5, 2000, File No. 333-02317).
4.1 Specimen Certificate of Common Stock (incorporated by
reference to Exhibit 4.1 of Amendment No. 1 to Beckman
Coulter's Form S-1 registration statement, File No.
33-24572).
4.2 Rights Agreement between Beckman Coulter 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 Beckman Coulter 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 Beckman Coulter'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 Beckman Coulter 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 Beckman Coulter'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
Beckman Coulter'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 Beckman Coulter'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).
4.8 Stockholder Protection Rights Agreement (incorporated by
reference to Exhibit 4 of Beckman Coulter's report on Form
8-K filed with the Securities and Exchange Commission on
February 8, 1999, 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 Beckman
Coulter'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 Beckman Coulter, in favor of the Lender Parties
(as defined in the Credit Agreement) (incorporated by
reference to Exhibit 10.2 of Beckman Coulter'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.
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10.4 Benefit Equity Amended and Restated Trust Agreement between
Beckman Coulter 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 Beckman Coulter'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).
*10.5 Beckman Coulter's Annual Incentive Plan for 1997, adopted by
Beckman Coulter in 1997 (incorporated by reference to
Exhibit 10.1 of Beckman Coulter'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.
*10.6 Beckman Coulter'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 Beckman
Coulter'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).
*10.7 Amendment to Beckman Coulter'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.
*10.8 Beckman Coulter's Incentive Compensation Plan, as amended by
the Beckman Coulter's Board of Directors on October 26, 1988
and as amended and restated by Beckman Coulter's Board of
Directors on March 28, 1989 (incorporated by reference to
Exhibit 10.16 of Beckman Coulter'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).
*10.9 Amendment to Beckman Coulter'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).
*10.10 Restricted Stock Agreement and Election (Cycle
Three -- Economic Value Added Incentive Plan), adopted by
Beckman Coulter 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).
*10.11 Form of Restricted Stock Agreement, dated as of January 3,
1997, between Beckman Coulter and certain of its Executive
Officers and certain other key employees (incorporated by
reference to Exhibit 10.1 of Beckman Coulter'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).
*10.12 Beckman Coulter's Supplemental Pension Plan, adopted by the
Company October 24, 1990 (incorporated by reference to
Exhibit 10.4 of Beckman Coulter'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).
*10.13 Amendment 1995-1 to Beckman Coulter's Supplemental Pension
Plan, adopted by Beckman Coulter 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).
*10.14 Amendment 1996-1 to Beckman Coulter's Supplemental Pension
Plan, dated as of December 9, 1996 (incorporated by
reference to Exhibit 10.18 of Beckman Coulter'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).
20
22
*10.15 Stock Option Plan for Non-Employee Directors (Amended and
Restated effective as of August 7, 1997), incorporated by
reference to Exhibit 4.1 of Beckman Coulter's Registration
Statement on Form S-8 filed with the Securities and Exchange
Commission on October 8, 1997, Registration No. 333-37429.
*10.16 Agreement Regarding Retirement Benefits of Albert Ziegler,
dated June 16, 1995, between Beckman Coulter and Albert
Ziegler (incorporated by reference to exhibit 10.22 of
Beckman Coulter'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).
*10.17 Agreement Regarding Retirement Benefits of Fidencio M.
Mares, adopted and dated April 30, 1996, between Beckman
Coulter and Fidencio M. Mares (incorporated by reference to
Exhibit 10.3 of Beckman Coulter'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).
10.18 Amendment 1997-1 to Beckman Coulter'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).
*10.19 Beckman Coulter's Amended and Restated Deferred Directors'
Fee Program, amended as of June 5, 1997 (incorporated by
reference to Exhibit 10.6 of Beckman Coulter'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).
*10.20 Amendment 1997-2 to Beckman Coulter's Supplemental Pension
Plan, adopted as of October 31, 1997 (incorporated by
reference to Exhibit 10.7 of Beckman Coulter'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).
*10.21 Form of Restricted Stock Award Agreement between Beckman
Coulter 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).
*10.22 Form of Stock Option Grant for non-employee Directors
(incorporated by reference to Exhibit 4.3 of Beckman
Coulter's Registration Statement on Form S-8 filed with the
Securities and Exchange Commission on October 8, 1997,
Registration No. 333-37429).
*10.23 Beckman Coulter'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 Beckman Coulter'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).
*10.24 Beckman Coulter'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).
*10.25 Form of Coulter's Special Incentive Plan and Sharing Bonus
Plan, assumed by Beckman Coulter October 31, 1997
(incorporated by reference to Exhibit 10.38 of Beckman
Coulter'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).
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23
10.26 Distribution Agreement, dated as of April 11, 1989, among
SmithKline Beckman Corporation Beckman Coulter 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).
10.27 Amendment to the Distribution Agreement effective as of June
1, 1989 between SmithKline Beckman Corporation, Beckman
Coulter and Allergan, Inc. (incorporated by reference to
Exhibit 10.26 of Amendment No. 2 to Beckman Coulter's Form
S-1 registration statement, File No. 33-28853).
10.28 Cross-Indemnification Agreement between Beckman Coulter and
SmithKline Beckman Corporation (incorporated by reference to
Exhibit 10.1 of Amendment No. 1 to Beckman Coulter's Form
S-1 registration statement, File No. 33-24572).
10.29 Amendment No. 1 dated April 3, 1998 to the Credit Agreement
by and among Beckman Coulter, 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 Beckman Coulter's Quarterly
Report to the Securities and Exchange Commission on Form
10-Q for the quarter ended March 31, 1998, File No.
001-10109).
*10.30 Amendment No. 1998-1, adopted and effective as of April 2,
1998 to Beckman Coulter's 1998 Incentive Compensation Plan
(incorporated by reference to Exhibit 10.2 of Beckman
Coulter's Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarter ended March 31,
1998, File No. 001-10109).
*10.31 1998 Annual Incentive Plan (AIP) (incorporated by reference
to Exhibit 10.3 of Beckman Coulter's Quarterly Report to the
Securities and Exchange Commission on Form 10-Q for the
quarter ended March 31, 1998, File No. 001-10109).
10.32 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 Beckman
Coulter's current report on Form 8-K filed with the
Securities and Exchange Commission on July 9, 1998, File No.
001-10109).
10.33 Lease Agreement made as of June 25, 1998 between Beckman
Coulter, Inc., and Cardbeck Chaska Trust (incorporated by
reference to Exhibit 2.6 of Beckman Coulter's current report
on Form 8-K filed with the Securities and Exchange
Commission on July 9, 1998, File No. 001-10109).
10.34 Lease Agreement made as of June 25, 1998 between Coulter
Corporation and Cardbeck Miami Trust (incorporated by
reference to Exhibit 2.7 of Beckman Coulter's current report
on Form 8-K filed with the Securities and Exchange
Commission on July 9, 1998, File No. 001-10109).
10.35 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).
10.36 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).
10.37 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 Beckman
Coulter's current report on Form 8-K filed with the
Securities and Exchange Commission on July 9, 1998, File No.
001-10109).
22
24
10.38 Lease Modification Agreement made as of June 25, 1998 among
Coulter Corporation and Cardbeck Miami Trust (incorporated
by reference to Exhibit 2.11 of Beckman Coulter'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 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 Beckman Coulter's current report on Form 8-K filed with
the Securities and Exchange Commission on July 9, 1998, File
No. 001-10109).
10.40 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 Beckman
Coulter's current report on Form 8-K filed with the
Securities and Exchange Commission on July 9, 1998, File No.
001-10109).
*10.41 Beckman Coulter'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 Beckman Coulter's Registration Statement on Form S-8
filed with the Securities and Exchange Commission on
December 18, 1998, Registration No. 333-69249).
*10.42 Beckman Coulter'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).
*10.43 Beckman Coulter's Amended and Restated Savings Plan dated
December 24, 1998, effective as of September 1998
(incorporated by reference to Exhibit 4.1 of Beckman
Coulter's Registration Statement on Form S-8 filed with the
Securities and Exchange Commission on February 10, 1999,
Registration No. 333-72081).
*10.44 Amendment 1998-1, adopted and effective as of April 2, 1998
to Beckman Coulter's 1998 Incentive Compensation Plan
(incorporated by reference to Exhibit 10.2 of Beckman
Coulter'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)
*10.45 1999 Annual Incentive Plan (AIP) (incorporated by reference
to Exhibit 10.1 of Beckman Coulter's Quarterly Report to the
Securities and Exchange Commission on Form 10-Q for the
quarter ended September 30, 1999, File No. 001-10109).
*10.46 Amendment 1999-1, adopted October 22, 1999 and effective as
of September 1, 1998, to the Beckman Coulter, Inc. Executive
Restoration Plan (incorporated by reference to Exhibit 10.2
of Beckman Coulter's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarter ended
September 30, 1999, File No. 001-10109).
*10.47 Amendment 1999-2, adopted November 23, 1999, to the Beckman
Coulter, Inc. 1998 Incentive Compensation Plan (incorporated
by reference to Exhibit 10.51 of Beckman Coulter's Annual
Report to the Securities and Exchange Commission on Form
10-K for the fiscal year ended December 31, 1999, File No.
001-10109).
*10.48 Amendment 1999-1, adopted December 20, 1999, to the Beckman
Coulter, Inc. Savings Plan. (incorporated by reference to
Exhibit 10.52 of Beckman Coulter's Annual Report to the
Securities and Exchange Commission on Form 10-K for the
fiscal year ended December 31, 1999, File No. 001-10109).
*10.49 Change of Control Agreement between Beckman Coulter, Inc.
and John P. Wareham, dated as of January 1, 2000
(incorporated by reference to Exhibit 10.53 of Beckman
Coulter's Annual Report to the Securities and Exchange
Commission on Form 10-K for the fiscal year ended December
31, 1999, File No. 001-10109).
23
25
*10.50 2000 Annual Incentive Plan (AIP)(incorporated by reference
to Exhibit 10.1 of Beckman Coulter's Quarterly Report to the
Securities and Exchange Commission on Form 10-Q for the
quarter ended March 31, 2000, File No. 001-10109).
*10.51 Beckman Coulter, Inc. Savings Plan, Amendment 2000-1, dated
June 5, 2000. (incorporated by reference to Exhibit 10.1 of
Beckman Coulter's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarter ended June
30, 2000, File No. 001-10109).
*10.52 Beckman Coulter, Inc. Executive Deferred Compensation Plan,
Amendment 2000-1, dated October 19, 2000 (incorporated by
reference to Exhibit 10.1 of Beckman Coulter's Quarterly
Report to the Securities and Exchange Commission on Form
10-Q for the quarter ended September 30, 2000, File No.
001-10109).
*10.53 Beckman Coulter, Inc. Executive Deferred Compensation Plan,
Amendment 2000-2, dated October 19, 2000 (incorporated by
reference to Exhibit 10.1 of Beckman Coulter's Quarterly
Report to the Securities and Exchange Commission on Form
10-Q for the quarter ended September 30, 2000, File No.
001-10109).
*10.54 Beckman Coulter, Inc. Executive Restoration Plan, Amendment
2000-1, dated October 19, 2000 (incorporated by reference to
Exhibit 10.3 of Beckman Coulter's Quarterly Report to the
Securities and Exchange Commission on Form 10-Q for the
quarter ended September 30, 2000, File No. 001-10109).
*10.55 Form of Change in Control Agreement, dated as of January 1,
2001, between Beckman Coulter, certain of its Executive
Officers and certain other key employees.
*10.56 Amendment 2000-2 adopted December 21, 2000 to the Beckman
Coulter, Inc. Savings Plan
*10.57 Executive Retention Incentive Program Summary (February
2001)
11. Statement regarding computation of per share earnings: This
information is incorporated by reference to the discussions
of "Earnings (Loss) Per Share" located in Note 14 of the
Consolidated Financial Statements of Beckman Coulter's
Annual Report to Stockholders for the year ended December
31, 1999.
13. The portion of Beckman Coulter's Annual Report to
Stockholders for the year ended December 31, 2000 titled
"Financial Results".
21. Subsidiaries.
23. Consent of KPMG LLP
24. Power of Attorney (included herein on the signature page).
99.1 II. Valuation and Qualifying Accounts.
(b) Reports on Form 8-K During Fourth Quarter ended December 31, 2000.
The following reports on Form 8-K were filed since September 30, 2000:
"Beckman Coulter Announces Two-For-One Stock Split, Increases Dividend"
filed October 6, 2000.
BECKMAN COULTER, INC.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
The consolidated financial statements of Beckman Coulter and the related
report of KPMG LLP, dated January 25, 2001 are incorporated by reference to the
section entitled "Financial Results" filed as Exhibit 13 to this Form 10-K.
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.
24
26
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 /s/ 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, Amin I.
Khalifa, William H. May, 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
--------- ----- ----
/s/ JOHN P. WAREHAM Chairman of the Board, February 1, 2001
- ----------------------------------------------------- President and Chief Executive
John P. Wareham Officer
/s/ AMIN I. KHALIFA Vice President, Finance and February 1, 2001
- ----------------------------------------------------- Chief Financial Officer
Amin I. Khalifa (Principal Financial Officer)
/s/ JAMES B. GRAY Director/Controller (Principal February 1, 2001
- ----------------------------------------------------- Accounting Officer)
James B. Gray
/s/ HUGH K. COBLE Director February 1, 2001
- -----------------------------------------------------
Hugh K. Coble
/s/ CAROLYNE K. DAVIS Director February 1, 2001
- -----------------------------------------------------
Carolyne K. Davis, Ph.D.
/s/ PETER B. DERVAN Director February 1, 2001
- -----------------------------------------------------
Peter B. Dervan, Ph.D.
Director , 2001
- -----------------------------------------------------
Ronald W. Dollens
25
27
SIGNATURE TITLE DATE
--------- ----- ----
/s/ CHARLES A. HAGGERTY Director February 1, 2001
- -----------------------------------------------------
Charles A. Haggerty
/s/ GAVIN HERBERT Director February 1, 2001
- -----------------------------------------------------
Gavin S. Herbert
/s/ VAN B. HONEYCUTT Director February 1, 2001
- -----------------------------------------------------
Van B. Honeycutt
Director , 2001
- -----------------------------------------------------
William N. Kelley, M.D.
/s/ C. RODERICK O'NEIL Director February 1, 2001
- -----------------------------------------------------
C. Roderick O'Neil
/s/ BETTY WOODS Director February 1, 2001
- -----------------------------------------------------
Betty Woods
26
28
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
- ------- -------
10.55 Form of Change in Control Agreement, dated as of January 1,
2001, between Beckman Coulter, certain of its Executive
Officers and certain other key employees.
10.56 Amendment 2000-2 adopted December 21, 2000 to the Beckman
Coulter, Inc. Savings Plan
10.57 Executive Retention Incentive Program Summary (February
2001)
13. The portion of Beckman Coulter's Annual Report to
Stockholders for the year ended December 31, 2000 titled
"Financial Results".
21. Subsidiaries
23. Consent of KPMG LLP
99.1 II. Valuation and Qualifying Accounts
27