SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 23, 2015

 

 

C. R. BARD, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

New Jersey   001-6926   22-1454160

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

730 Central Avenue

Murray Hill, New Jersey

  07974
(Address of Principal Executive Office)   (Zip Code)

(908) 277-8000

(Registrant’s Telephone Number, Including Area Code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

The following information is being furnished pursuant to Item 2.02.

On July 23, 2015, C. R. Bard, Inc. issued a press release reporting earnings and other financial results for the second quarter ended June 30, 2015. A copy of the press release is furnished as Exhibit 99.1 and is incorporated by reference in this Item 2.02. The information in this press release shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
Number

     
99.1    Press Release (This exhibit is furnished not filed.)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

C. R. BARD, INC.
By:  

/S/ CHRISTOPHER S. HOLLAND

Name:   Christopher S. Holland
Title:   Senior Vice President and Chief Financial Officer

July 23, 2015

 


EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1    Press Release


Exhibit 99.1

Contacts:

 

Investor Relations:    Todd W. Garner
   Vice President, Investor Relations
   (908) 277-8065
Media Relations:    Scott T. Lowry
   Vice President and Treasurer
   (908) 277-8365

BARD ANNOUNCES SECOND QUARTER RESULTS

MURRAY HILL, NJ — (July 23, 2015) — C. R. Bard, Inc. (NYSE: BCR) today reported 2015 second quarter financial results. Second quarter 2015 net sales were $859.8 million, an increase of 4 percent over the prior-year period on an as-reported basis. Excluding the impact of foreign exchange, second quarter 2015 net sales increased 8 percent over the prior-year period.

For the second quarter 2015, net sales in the U.S. were $592.0 million, an increase of 7 percent over the prior-year period. Net sales outside the U.S. were $267.8 million, a decrease of 2 percent from the prior-year period on an as-reported basis. Excluding the impact of foreign exchange, second quarter 2015 net sales outside the U.S. increased 11 percent over the prior-year period.

For the second quarter 2015, net loss was ($54.7 million) and diluted loss per share was ($0.74), reflecting a net charge for estimated costs related to product liability matters. Adjusting for this charge and certain other items that affect the comparability of results between periods as detailed in the tables below, second quarter 2015 net income was $154.3 million and diluted earnings per share, after adjusting for certain items that affect comparability between periods and excluding amortization of intangible assets, was $2.27, an increase of 8 percent and 10 percent, respectively, as compared to second quarter 2014 results.

Timothy M. Ring, chairman and chief executive officer, commented, “We are pleased with the strong start to 2015, which, as we’ve said, is an important year of execution for us. More than two years ago, we introduced our strategic investment plan designed to accelerate the growth rate of the company and put us in a position to provide revenue growth in the mid-to-high single digits with attractive returns for shareholders. We are pleased with the results to date and we remain focused on that objective.”

C. R. Bard, Inc. (www.crbard.com), headquartered in Murray Hill, NJ, is a leading multinational developer, manufacturer and marketer of innovative, life-enhancing medical technologies in the fields of vascular, urology, oncology and surgical specialty products.

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management’s current expectations, the accuracy of which is necessarily subject to risks and uncertainties. These statements are not historical in nature and use words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “forecast”, “plan”, “believe”, and other words of similar meaning in connection with any discussion of future operating or financial performance. Many factors may cause actual results to differ materially from anticipated results including product developments, sales efforts, income tax matters, the outcomes of contingencies such as legal proceedings, and other economic, business, competitive and regulatory factors. The company undertakes no obligation to update its forward-looking statements. Please refer to the Cautionary Statement Regarding Forward-Looking Information in our March 31, 2015 Form 10-Q for more detailed information about these and other factors that may cause actual results to differ materially from those expressed or implied.


C. R. Bard, Inc.

Consolidated Statements of Operations

(dollars and shares in thousands except per share amounts, unaudited)

 

     Quarter Ended
June 30,
    Six Months Ended
June 30,
 
     2015     2014     2015      2014  

Net sales

   $ 859,800      $ 827,100      $ 1,679,500       $ 1,626,400   

Costs and expenses

         

Cost of goods sold

     333,700        320,700        644,900         630,200   

Marketing, selling and administrative expense

     250,000        245,200        485,700         482,000   

Research and development expense

     64,000        85,400        124,600         149,700   

Interest expense

     11,200        11,300        22,500         22,400   

Other (income) expense, net

     141,700        257,300        158,000         251,300   
  

 

 

   

 

 

   

 

 

    

 

 

 

Total costs and expenses

  800,600      919,900      1,435,700      1,535,600   
  

 

 

   

 

 

   

 

 

    

 

 

 

Income (loss) from operations before income taxes

  59,200      (92,800   243,800      90,800   
  

 

 

   

 

 

   

 

 

    

 

 

 

Income tax provision

  113,900      26,600      158,700      61,800   
  

 

 

   

 

 

   

 

 

    

 

 

 

Net (loss) income

$ (54,700 $ (119,400 $ 85,100    $ 29,000   
  

 

 

   

 

 

   

 

 

    

 

 

 

Basic (loss) earnings per share available to common shareholders

$ (0.74 $ (1.59 $ 1.13    $ 0.38   
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted (loss) earnings per share available to common shareholders

$ (0.74 $ (1.59 $ 1.11    $ 0.37   
  

 

 

   

 

 

   

 

 

    

 

 

 

Wt. avg. common shares outstanding - basic

  74,200      75,100      74,300      76,000   

Wt. avg. common and common equivalent shares outstanding - diluted

  74,200      75,100      75,700      77,500   

Product Group Summary of Net Sales

(dollars in thousands, unaudited)

 

     Quarter Ended June 30,     Six Months Ended June 30,  
     2015      2014     Change     Constant
Currency
    2015      2014     Change     Constant
Currency
 

Vascular

   $ 248,600       $ 233,000        7     12   $ 480,500       $ 452,200        6     11

Urology

     209,200         207,100        1     4     414,800         408,500        2     4

Oncology

     235,200         224,700        5     8     459,800         443,700        4     6

Surgical Specialties

     143,800         139,300        3     6     279,700         274,500        2     5

Other

     23,000         23,000        0     2     44,700         47,500        -6     -4
  

 

 

    

 

 

       

 

 

    

 

 

     

Net sales

$ 859,800    $ 827,100      4 $ 1,679,500    $ 1,626,400      3
  

 

 

    

 

 

       

 

 

    

 

 

     

Foreign exchange impact

  (29,800   (50,200
  

 

 

    

 

 

       

 

 

    

 

 

     

Constant Currency

$ 859,800    $ 797,300      8 $ 1,679,500    $ 1,576,200      7
  

 

 

    

 

 

       

 

 

    

 

 

     


Non-GAAP Reconciliation of (Loss) Earnings

(dollars in millions except per share amounts, unaudited)

 

     Quarter Ended June 30, 2015  
     Cost of
Goods
Sold
    Marketing,
Selling and
Administrative
Expense
    Research &
Development
Expense
    Other
(Income)
Expense, Net
    Income
Taxes
    Net
(Loss)
Income
    Diluted
(Loss) Earnings
per Share
Available
to Common
Shareholders(1)
 

GAAP Basis

   $ 333.7      $ 250.0      $ 64.0      $ 141.7      $ 113.9      $ (54.7   $ (0.74

Items that affect comparability of results between periods:

              

Acquisition-related items

     (2.0     (1.0     (1.5     —          0.5        4.0     

Litigation charges, net

     —          —          —          (343.7     12.5        331.2     

Gore proceeds

     —          —          —          210.5        (78.8     (131.7  

Restructuring and productivity initiative costs

     —          —          —          (8.5     3.0        5.5     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (2.0     (1.0     (1.5     (141.7     (62.8     209.0        2.73   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Adjusted Basis

   $ 331.7      $ 249.0      $ 62.5      $ —        $ 51.1      $ 154.3     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Amortization of intangible assets

   $ 29.3            $ 9.9      $ 19.4        0.25   
            

 

 

   

 

 

 

Adjusted Earnings

             $ 173.7      $ 2.27   
            

 

 

   

 

 

 

 

     Quarter Ended June 30, 2014  
     Cost of
Goods
Sold
    Marketing,
Selling and
Administrative
Expense
    Research &
Development
Expense
    Other
(Income)
Expense, Net
    Income
Taxes
     Net
(Loss)
Income
    Diluted
(Loss) Earnings
per Share
Available
to Common
Shareholders(1)
 

GAAP Basis

   $ 320.7      $ 245.2      $ 85.4      $ 257.3      $ 26.6       $ (119.4   $ (1.59

Items that affect comparability of results between periods:

               

Acquisition-related items

     (0.9     (0.3     (21.2     (0.1     0.4         22.1     

Litigation charges, net

     —          —          —          (262.7     22.4         240.3     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total

     (0.9     (0.3     (21.2     (262.8     22.8         262.4        3.37   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

Adjusted Basis

   $ 319.8      $ 244.9      $ 64.2      $ (5.5   $ 49.4       $ 143.0     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

Amortization of intangible assets

   $ 26.6            $ 8.9       $ 17.7        0.23   
             

 

 

   

 

 

 

Adjusted Earnings

              $ 160.7      $ 2.06   
             

 

 

   

 

 

 

 

     Six Months Ended June 30, 2015  
     Cost of
Goods
Sold
     Marketing,
Selling and
Administrative
Expense
    Research &
Development
Expense
    Other
(Income)
Expense, Net
    Income
Taxes
    Net
Income
    Diluted
Earnings
per Share
Available
to Common
Shareholders
 

GAAP Basis

   $ 644.9       $ 485.7      $ 124.6      $ 158.0      $ 158.7      $ 85.1      $ 1.11   

Items that affect comparability of results between periods:

               

Acquisition-related items

     7.9         (1.2     (1.5     (0.5     0.7        (5.4  

Litigation charges, net

     —           —          —          (354.0     13.4        340.6     

Gore proceeds

     —           —          —          210.5        (78.8     (131.7  

Restructuring and productivity initiative costs

     —           —          —          (12.4     4.3        8.1     
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     7.9         (1.2     (1.5     (156.4     (60.4     211.6        2.75   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Adjusted Basis

   $ 652.8       $ 484.5      $ 123.1      $ 1.6      $ 98.3      $ 296.7     
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Amortization of intangible assets

   $ 58.2             $ 19.6      $ 38.6        0.50   
             

 

 

   

 

 

 

Adjusted Earnings

              $ 335.3      $ 4.36   
             

 

 

   

 

 

 

 

     Six Months Ended June 30, 2014  
     Cost of
Goods
Sold
    Marketing,
Selling and
Administrative
Expense
    Research &
Development
Expense
    Other
(Income)
Expense, Net
    Income
Taxes
    Net
Income
    Diluted
Earnings
per Share
Available
to Common
Shareholders
 

GAAP Basis

   $ 630.2      $ 482.0      $ 149.7      $ 251.3      $ 61.8      $ 29.0      $ 0.37   

Items that affect comparability of results between periods:

              

Acquisition-related items

     (1.5     (0.4     (21.6     (2.1     1.2        24.4     

Litigation charges, net

     —          —          —          (262.7     22.4        240.3     

Gain on sale of investment

     —          —          —          7.1        (2.2     (4.9  

Tax item

     —          —          —          —          10.9        (10.9)     

 

 

 

Total

     (1.5     (0.4     (21.6     (257.7     32.3        248.9        3.16   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Adjusted Basis

   $ 628.7      $ 481.6      $ 128.1      $ (6.4   $ 94.1      $ 277.9     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Amortization of intangible assets

   $ 53.2            $ 17.8      $ 35.4        0.45   
            

 

 

   

 

 

 

Adjusted Earnings

             $ 313.3      $ 3.98   
            

 

 

   

 

 

 

 

(1) For the quarters ended June 30, 2015 and 2014, diluted loss per share on a GAAP basis does not include common share equivalents of approximately 1.3 million and 1.5 million, respectively. Common share equivalents primarily from share-based compensation plans were not included in these periods because their effect would have been antidilutive. As a result, total per share amounts do not add.


Notes to Non-GAAP Reconciliation of (Loss) Earnings

 

 

    For the second quarter 2015, the following items affected the comparability of results between periods: (i) charges of $4.5 million pre-tax for acquisition-related items including transaction costs, purchase accounting adjustments and integration costs; (ii) charges of $343.7 million pre-tax related to estimated costs for product liability matters, net of recoveries, which includes $6.8 million of litigation-related defense costs in connection with the District Court’s pre-trial orders that the company prepare 200 and then an additional 300 individual cases for trial (the “WHP Pre-Trial Orders”); (iii) a gain of $210.5 million pre-tax related to a patent infringement litigation against W.L. Gore & Associates, Inc. (“Gore”); and (iv) charges of $8.5 million pre-tax for restructuring and productivity initiatives. The net effect of these items increased net loss by $209.0 million, or $2.73 diluted loss per share available to common shareholders. Amortization of intangible assets was $29.3 million pre-tax, which decreased net income on an adjusted basis by $19.4 million, or $0.25 diluted earnings per share available to common shareholders.

 

    For the second quarter 2014, the following items affected the comparability of results between periods: (i) charges of $22.5 million pre-tax for acquisition-related items including transaction costs, purchase accounting adjustments and integration costs; and (ii) charges of $262.7 million pre-tax related to estimated costs for product liability matters, net of recoveries, which includes $4.2 million of litigation-related defense costs in connection with the District Court’s pre-trial order that the company prepare 200 individual cases for trial. The net effect of these items increased net loss by $262.4 million, or $3.37 diluted loss per share available to common shareholders. Amortization of intangible assets was $26.6 million pre-tax, which decreased net income on an adjusted basis by $17.7 million, or $0.23 diluted earnings per share available to common shareholders.

 

    For the six months ended June 30, 2015, the following items affected the comparability of results between periods: (i) a net benefit of $4.7 million pre-tax for acquisition-related items including transaction costs, purchase accounting adjustments and integration costs; (ii) charges of $354.0 million pre-tax related to estimated costs for product liability matters, net of recoveries, which includes $15.1 million of litigation-related defense costs in connection with the WHP Pre-Trial Orders and other litigation-related charges; (iii) a gain of $210.5 million pre-tax related to a patent infringement litigation against Gore; and (iv) charges of $12.4 million pre-tax for restructuring and productivity initiatives. The net effect of these items decreased net income by $211.6 million, or $2.75 diluted earnings per share available to common shareholders. Amortization of intangible assets was $58.2 million pre-tax, which decreased net income on an adjusted basis by $38.6 million, or $0.50 diluted earnings per share available to common shareholders.

 

    For the six months ended June 30, 2014, the following items affected the comparability of results between periods: (i) charges of $25.6 million pre-tax for acquisition-related items including transaction costs, purchase accounting adjustments and integration costs; (ii) charges of $262.7 million pre-tax related to estimated costs for product liability matters, net of recoveries, which includes $4.2 million of litigation-related defense costs in connection with the District Court’s pre-trial order that the company prepare 200 individual cases for trial; (iii) a gain of $7.1 million pre-tax related to the sale of an equity investment; and (iv) a decrease of $10.9 million in the income tax provision associated with the completion of IRS examinations for the tax years 2008 through 2010. The net effect of these items decreased net income by $248.9 million, or $3.16 diluted earnings per share available to common shareholders. Amortization of intangible assets was $53.2 million pre-tax, which decreased net income on an adjusted basis by $35.4 million, or $0.45 diluted earnings per share available to common shareholders.

This press release contains financial measures that are not calculated in accordance with United States generally accepted accounting principles (GAAP). These non-GAAP measures are reconciled to their most directly comparable GAAP measures in the above tables.

This press release includes net sales excluding the impact of foreign exchange. The company analyzes net sales on a constant currency basis to better measure the comparability of results between periods. Because changes in foreign currency exchange rates have a non-operating impact on net sales, the company believes that evaluating growth in net sales on a constant currency basis provides an additional and meaningful assessment of net sales to both management and the company’s investors.

In addition, this press release includes the following non-GAAP measures: (1) cost of goods sold excluding the impact of acquisition-related items; (2) marketing, selling and administrative expense excluding charges for acquisition-related items; (3) research and development expense excluding charges for acquisition-related items; (4) other (income) expense, net, excluding acquisition-related items, litigation charges, net of recoveries (which includes litigation-related defense costs in connection with the WHP Pre-Trial Orders) and other litigation-related charges, Gore proceeds, restructuring and productivity initiative costs, and gain on sale of investment; (5) income tax provision excluding a decrease associated with the completion of IRS examinations and the tax effect of the items set forth in (1) through (4) above; (6) net income excluding the items set forth in (1) through (5) above; and (7) diluted earnings per share available to common shareholders excluding the items set forth in (1) through (5) above and amortization of intangible assets.


The company excluded the items described above because they may cause certain statements of operations categories not to be indicative of ongoing operating results, and therefore affect the comparability of results between periods. The company therefore believes that these non-GAAP measures provide an additional and meaningful assessment of the company’s ongoing operating performance. Because the company has historically reported non-GAAP results to the investment community, management also believes that the inclusion of these non-GAAP measures provides consistency in its financial reporting and facilitates investors’ understanding of the company’s historic operating trends by providing an additional basis for comparisons to prior periods. Management uses these non-GAAP measures: (1) to establish financial and operational goals; (2) to monitor the company’s actual performance in relation to its business plan and operating budgets; (3) to evaluate the company’s core operating performance and understand key trends within the business; and (4) as part of several components it considers in determining incentive compensation.

Management recognizes that the use of these non-GAAP measures has limitations, including the fact that they may not be comparable with similar non-GAAP measures used by other companies and that management must exercise judgment in determining which types of charges or other items should be excluded from the non-GAAP information. Management compensates for these limitations by providing full disclosure of each non-GAAP measure and a reconciliation to the most directly comparable GAAP measure. All non-GAAP measures are intended to supplement the applicable GAAP disclosures and should not be considered in isolation from, or as a replacement for, financial information prepared in accordance with GAAP. For a reconciliation of these non-GAAP measures to the most comparable GAAP measures, please see the above tables.


Notes to (Loss) Earnings per Share

(dollars and shares in thousands, except per share amounts, unaudited)

 

 

     Quarter Ended
June 30,
    Six Months Ended
June 30,
 
     2015     2014     2015      2014  

(Loss) earnings per Share Numerator: GAAP Basis - basic and diluted

         

Net (loss) income

   $ (54,700   $ (119,400   $ 85,100       $ 29,000   

Less: Income allocated to participating securities (1)

     —          —          1,200         400   
  

 

 

   

 

 

   

 

 

    

 

 

 

Net (loss) income available to common shareholders

   $ (54,700   $ (119,400   $ 83,900       $ 28,600   
  

 

 

   

 

 

   

 

 

    

 

 

 

Earnings per Share Numerator: Adjusted Earnings

         

Net income

   $ 173,700      $ 160,700      $ 335,300       $ 313,300   

Less: Income allocated to participating securities (1)

     2,600        2,700        5,000         5,200   
  

 

 

   

 

 

   

 

 

    

 

 

 

Net income available to common shareholders

   $ 171,100      $ 158,000      $ 330,300       $ 308,100   
  

 

 

   

 

 

   

 

 

    

 

 

 

Earnings per Share Denominator:

         

Wt. avg. common shares outstanding - basic

     74,200        75,100        74,300         76,000   

Wt. avg. common and common equivalent shares outstanding (2): GAAP Basis - diluted

     74,200        75,100        75,700         77,500   

Wt. avg. common and common equivalent shares outstanding: Adjusted Basis - diluted

     75,500        76,600        75,700         77,500   

(Loss) earnings per Share: GAAP Basis

         

Basic (loss) earnings per share available to common shareholders

   $ (0.74   $ (1.59   $ 1.13       $ 0.38   
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted (loss) earnings per share available to common shareholders

   $ (0.74   $ (1.59   $ 1.11       $ 0.37   
  

 

 

   

 

 

   

 

 

    

 

 

 

Earnings per Share: Adjusted Earnings

         

Diluted earnings per share available to common shareholders

   $ 2.27      $ 2.06      $ 4.36       $ 3.98   
  

 

 

   

 

 

   

 

 

    

 

 

 

 

(1) Basic and diluted earnings per share available to common shareholders is calculated using a numerator, which represents the total of income less income allocated to participating securities.
(2) For the quarters ended June 30, 2015 and 2014, diluted loss per share on a GAAP basis does not include common share equivalents of approximately 1.3 million and 1.5 million, respectively. Common share equivalents primarily from share-based compensation plans were not included in these periods because their effect would have been antidilutive.
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