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C.R. Bard Inc. Reports Operating Results (10-K)

February 23, 2012 | About:
10qk

10qk

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C.R. Bard Inc. (BCR) filed Annual Report for the period ended 2011-12-31.

Bard C R Inc has a market cap of $8.19 billion; its shares were traded at around $93.8199 with a P/E ratio of 14.9 and P/S ratio of 2.8. The dividend yield of Bard C R Inc stocks is 0.8%. Bard C R Inc had an annual average earning growth of 15.6% over the past 10 years. GuruFocus rated Bard C R Inc the business predictability rank of 5-star.

Highlight of Business Operations:

Bards 2011 United States net sales of $1,956.0 million increased 4% compared to $1,889.0 million in 2010. Bards 2011 international net sales of $940.4 million increased 13% on a reported basis (9% on a constant currency basis) compared to $831.2 million in 2010. Bards 2010 United States net sales increased 7% compared to $1,759.2 million in 2009. Bards 2010 international net sales increased 7% on a reported basis (6% on a constant currency basis) compared to $775.7 million in 2009.

Vascular Products - Bard markets a wide range of products for the peripheral vascular market, including endovascular products, electrophysiology products and vascular graft products. United States net sales of vascular products in 2011 increased 9% compared to the prior year. International net sales of vascular products in 2011 increased 15% on a reported basis (10% on a constant currency basis) compared to the prior year. The increase in consolidated net sales of vascular products in both 2011 and 2010 was due primarily to growth in endovascular products. United States net sales of vascular products in 2010 increased 14% compared to the prior year. International net sales in 2010 increased 7% on a reported basis (8% on a constant currency basis) compared to the prior year.

Consolidated net sales of dialysis access catheters in 2011 increased 10% on a reported basis (8% on a constant currency basis) compared to the prior year. Consolidated net sales of vascular access ultrasound devices in 2011 increased 10% on a reported basis (9% on a constant currency basis) compared to the prior year. Consolidated net sales of dialysis access catheters in 2010 increased 10% on a reported basis (9% on a constant currency basis) compared to the prior year. Consolidated net sales of vascular access ultrasound devices in 2010 increased 15% on a reported basis (14% on a constant currency basis) compared to the prior year.

Related Parties - The company and Kobayashi Pharmaceutical Co., Ltd. are parties to an equally-owned joint venture, Medicon Inc. (Medicon), which distributes Bards products in Japan. Bard accounts for the joint venture under the equity method of accounting. All transactions with Medicon are denominated in U.S. dollars. Bard recorded sales to Medicon of $139.0 million, $128.7 million and $122.5 million for the years ended 2011, 2010 and 2009, respectively. Bard eliminates the intercompany profits on sales to Medicon until Medicon sells Bards products to a third party. Bard recorded Medicon equity income of $3.8 million, $3.6 million and $2.3 million for the years ended 2011, 2010 and 2009, respectively. Bard received dividends from Medicon of $7.9 million, $1.6 million and $1.5 million for the years ended December 31, 2011, 2010 and 2009, respectively. Bards investment in Medicon was $15.9 million and $20.0 million at December 31, 2011 and 2010, respectively. Included in accounts receivable are trade receivables due from Medicon for purchases of Bards products of $37.4 million and $33.4 million at December 31, 2011 and 2010, respectively.

On November 10, 2011, the company acquired Medivance, Inc. (Medivance) for total cash consideration of $255.5 million. Medivance develops and sells critical care products in the Targeted Temperature Management area. Medivances core product is the ArticSun®, a noninvasive technology that utilizes a proprietary system that incorporates a hydrogel adhesive pad to control a patients core body temperature at a targeted level. The acquisition was accounted for as a business combination, and the results of operations have been included in the companys results since the acquisition date. The purchase price allocation at fair value resulted in the recognition of: deferred tax assets of $25.0 million, consisting primarily of net operating loss carryforwards; customer relationships of $88.7 million; core technologies of $75.9 million; deferred tax liabilities of $63.3 million, primarily associated with intangible assets; and other net assets of $17.0 million. The excess of the purchase price over fair value of the acquired net assets was recorded as goodwill of $112.2 million. The goodwill recognized includes the value of expanding the market for Medivances products. Synergies are expected to result from the alignment of critical care sales call points and other manufacturing efficiencies. The goodwill is not deductible for tax purposes. Customer relationships and core technologies are being amortized over their estimated useful lives of approximately 13 and 14 years, respectively. Customer relationships are recorded as a component of other intangible assets. The company incurred acquisition related transaction costs of $1.7 million, which were expensed to marketing, selling and administrative expense. In connection with this

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