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): August 31, 2000
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EDWARDS LIFESCIENCES CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 1-15525 36-4316614
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(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
One Edwards Way, Irvine, California 92614
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (949) 250-2500
Not Applicable
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On August 31, 2000, Edwards Lifesciences Corporation and its
affiliate, Edwards Lifesciences LLC, completed the sale of most of the assets
associated with their Bentley line of cardiopulmonary products (also called
"perfusion products") to two affiliates of Jostra AG, a German corporation, for
cash proceeds of approximately $30 million. The assets sold to Jostra include
products which are used to support the heart during stopped-heart cardiac
surgery, for example, disposable oxygenators, blood reservoirs and filters,
hardware and related products, and are located primarily in the United States,
Puerto Rico and Western Europe.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Unaudited pro forma financial information
Introductory Statement
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On August 31, 2000, Edwards Lifesciences Corporation and its affiliate, Edwards
Lifesciences LLC (the Company), completed the sale of most of the assets
associated with its Bentley line of cardiopulmonary products (also called
"perfusion products") to two affiliates of Jostra AG, a German corporation, for
cash proceeds of approximately $30 million. The assets sold to Jostra include
products which are used to support the heart during stopped-heart cardiac
surgery, for example, disposable oxygenators, blood reservoirs and filters,
hardware and related products, and are located primarily in the United States,
Puerto Rico and Western Europe.
The following unaudited pro forma consolidated condensed statements of income
for the six months ended June 30, 2000 and for the year ended December 31,
1999 give effect to the sale by the Company of its perfusion products as if
the sale had occurred on January 1 of each period, and the unaudited pro forma
consolidated condensed balance sheet at June 30, 2000 gives effect to the
sale as if the disposition had occurred at June 30, 2000.
The unaudited pro forma financial information does not purport to be indicative
of either the results of future operations or the results of operations that
would have occurred had the disposition been consummated on the dates indicated.
The pro forma financial information is based upon currently available
information and certain assumptions that the Company believes are reasonable
under the circumstances. The unaudited pro forma financial statements should be
read in conjunction with the Company's historical combined financial statements
and notes thereto previously filed in the Company's Information Statement on
Form 10 for the year ended December 31, 1999, and the Company's Quarterly Report
on Form 10-Q for the six months ended June 30, 2000.
Pro Forma Consolidated Condensed Statements of Income
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EDWARDS LIFESCIENCES CORPORATION
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF INCOME
(unaudited) (in millions, except per share data)
SIX MONTHS ENDED JUNE 30, 2000
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PRO FORMA ADJUSTMENTS
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NONRECURRING
HISTORICAL CHARGES OTHER PRO FORMA
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Net sales $431 ($35) (a) $396
Cost of goods sold (233) 29 (a) (204)
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Gross profit 198 (6) 192
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Selling, general and administrative expenses 119 (8) (a) 111
Research and development expenses 28 (3) (a) 25
Goodwill amortization 18 (5) (a) 13
Disposition of assets and other non-recurring charges, net 301 ($291) (b) 10
Non-recurring spin-off expenses 18 18
Other operating income (6) (6)
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478 (291) (16) 171
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Operating (loss) income (280) 291 10 21
Interest expense (6) (6)
Other expense, net (2) (2)
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(Loss) income before provision for income taxes (288) 291 10 13
Provision for income taxes (4) (12) (2) (a) (18)
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Net (loss) income ($292) $279 $8 ($5)
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Share information:
Pro forma net loss per share
Basic (c) ($0.09)
Diluted (c) ($0.09)(c)
Weighted average number of common shares outstanding
Basic (c) 58.2
Diluted (c) 58.2 (c)
EDWARDS LIFESCIENCES CORPORATION
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF INCOME
(UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, 1999
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PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
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Net sales $905 ($71) (a) $834
Cost of goods sold (466) 53 (a) (413)
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Gross profit 439 (18) 421
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Selling, general and administrative expenses 233 (20) (a) 213
Research and development expenses 55 (5) (a) 50
Goodwill amortization 34 (10) (a) 24
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322 (35) 287
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Operating income 117 17 134
Other expense, net (4) (4)
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Income before provision for income taxes 113 17 130
Provision for income taxes (31) (4) (a) (35)
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Net income $82 $13 $95
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Share information:
Pro forma net income per share
Basic (c) $1.63
Diluted (c) $1.63
Weighted average number of common shares outstanding
Basic (c) 58.2
Diluted (c) 58.4
Pro Forma Consolidated Condensed
Balance Sheet
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EDWARDS LIFESCIENCES CORPORATION
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED) ($ IN MILLIONS)
JUNE 30, 2000
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $2 $30 (e) $32
Accounts receivables, net 162 162
Inventories 95 (20)(d) 75
Prepaid expenses and other current assets 36 36
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Total current assets 295 10 305
Property, plant and equipment, net 178 (10)(d) 168
Investments in equity instruments 99 99
Goodwill and other intangibles, net 528 528
Other assets 23 23
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$1,123 $0 $1,123
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $121 $121
Short-term debt 210 210
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Total current liabilities 331 331
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Long-term debt 321 321
Other 60 60
Commitments and Contingencies
STOCKHOLDERS' EQUITY
Common Stock, $1 par value, authorized 350,000,000
shares, 58,426,091 shares outstanding 58 58
Additional contributed capital 274 274
Retained earnings 83 83
Accumulated other comprehensive loss (4) (4)
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Total stockholders' equity 411 411
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$1,123 $0 $1,123
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PRO FORMA ADJUSTMENTS
(a) To reflect the impact on operating results, including allocated costs
shared across all of the Company's product lines, from the sale of
the Bentley line of cardiopulmonary products as if the disposition had
taken place on January 1 of the period.
(b) In accordance with Statements of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of," and Staff Accounting
Bulletin No. 100, "Restructuring and Impairment Charges," the Company
recorded a pre-tax impairment charge of $291 million in the second
quarter of 2000 to reduce the carrying value of the assets sold to fair
value based upon the estimated net proceeds from the sale. Assets
subject to this impairment charge consisted primarily of goodwill ($245
million) and special-use manufacturing and support assets. The goodwill
impairment charge was calculated based upon a pro rata allocation of
the goodwill using the relative fair values of the affected long-lived
assets and identifiable intangibles acquired at the inception date of
the goodwill.
(c) No earnings per share data for the historical six months ended June 30,
2000 and the year ended December 31, 1999 is presented as the
Company's earnings were part of Baxter International Inc.'s earnings
through the close of business on March 31, 2000.
Due to the net loss for the six months ended June 30, 2000, the pro
forma basic and diluted net loss per share are the same amounts since
the impact of the common stock equivalents would be anti-dilutive.
(d) To record the removal of assets of operations sold.
(e) To record receipt of estimated cash proceeds of $30 million.
ITEM 7. (continued)
(c) Pursuant to General Instruction F of Form 8-K, the following
documents are incorporated by reference herein and attached as an exhibit
hereto:
EXHIBIT DESCRIPTION
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2.1 Amended and Restated Asset Purchase Agreement between Jostra
Bentley Corporation, Jostra Bentley Inc., Edwards Lifesciences
LLC and Edwards Lifesciences Corporation dated as of
August 30, 2000.
99.1 Edwards Lifesciences Corporation press release of September 1,
2000.
SIGNATURES
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.
Edwards Lifesciences Corporation
(Registrant)
Date: September 15, 2000 By: /s/ Bruce J. Bentcover
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(Signature)
Name: Bruce J. Bentcover
Title: Corporate Vice President and
Chief Financial Officer
EDWARDS LIFESCIENCES CORPORATION
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
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2.1 Amended and Restated Asset Purchase Agreement between Jostra
Bentley Corporation, Jostra Bentley Inc., Edwards Lifesciences
LLC and Edwards Lifesciences Corporation dated as of
August 30, 2000.
99.1 Edwards Lifesciences Corporation press release of September 1,
2000.