8-K 1 a2053968z8-k.htm 8-K Prepared by MERRILL CORPORATION
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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 1, 2001

EDWARDS LIFESCIENCES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Delaware 1-15525 36-4316614
(STATE OR OTHER JURISDICTION OF INCORPORATION) (COMMISSION
FILE NUMBER)		 (I.R.S. EMPLOYER
IDENTIFICATION NO.)

One Edwards Way, Irvine, California 92614
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (949) 250-2500

Not Applicable
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)


ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS.

        (a) On July 1, 2001, an affiliate of Edwards Lifesciences Corporation completed the sale of the stock of Edwards Lifesciences Cardiovascular Resources, Inc., a Pennsylvania corporation ("ELCVR"), to an affiliate of Fresenius Medical Care AG for cash proceeds of approximately $45 million. ELCVR's assets are located primarily in the United States and Puerto Rico and are used in the provision of perfusion services and related clinical services.


ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

        (b) Unaudited pro forma financial information

        On July 1, 2001, an affiliate of Edwards Lifesciences Corporation (the "Company") completed the sale of the stock of Edwards Lifesciences Cardiovascular Resources, Inc., a Pennsylvania corporation ("ELCVR"), to an affiliate of Fresenius Medical Care AG for cash proceeds of approximately $45 million. ELCVR's assets are located primarily in the United States and Puerto Rico and are used in the provision of perfusion services and related clinical services.

        The following unaudited pro forma consolidated condensed statements of income for the three months ended March 31, 2001 and for the year ended December 31, 2000 give effect to the sale by the Company of ELCVR as if it had occurred on January 1 of each period, and the unaudited pro forma consolidated condensed balance sheet at March 31, 2001 gives effect to the sale as if it had occurred at March 31, 2001.

        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 information should be read in conjunction with the Company's historical consolidated financial statements and notes thereto previously filed in the Company's Form 10-K for the year ended December 31, 2000 and Form 10-Q for the three months ended March 31, 2001.

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EDWARDS LIFESCIENCES CORPORATION
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF INCOME
(unaudited) (in millions, except per share data)

 
   Three Months Ended March 31, 2001
  
 
   Historical
   Pro Forma
Adjustments(a)
   Pro Forma
  
Net sales   $ 191.9   $ (31.1 ) $ 160.8  
  Cost of goods sold     96.2     (25.3 )   70.9  
   
 
 
 
Gross profit     95.7     (5.8 )   89.9  
   
 
 
 
  Selling, general and administrative expenses     53.8     (2.8 )   51.0  
  Research and development expenses     13.1           13.1  
  Goodwill amortization     5.7     (2.0 )   3.7  
  Other operating income     (3.9 )         (3.9 )
   
 
 
 
      68.7     (4.8 )   63.9  
   
 
 
 
Operating income     27.0     (1.0 )   26.0  
  Interest expense     5.5           5.5  
  Other expense, net     1.5     0.2     1.7  
   
 
 
 
Income before provision for income taxes     20.0     (1.2 )   18.8  
  Provision for income taxes     5.8     (1.3 )   4.5  
   
 
 
 
Income before cumulative effect of change in accounting principle     14.2     0.1     14.3  
  Cumulative effect of change in accounting principle     1.5           1.5  
   
 
 
 
Net income   $ 12.7   $ 0.1   $ 12.8  
   
 
 
 
Share information:                    

Net income per share
 
 
 
 
 
 
 
 
 
 
  Basic   $ 0.22         $ 0.22  
  Diluted   $ 0.21         $ 0.21  
Weighted average number of common shares outstanding                    
  Basic     58.7           58.7  
  Diluted     60.3           60.3  

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   Year Ended December 31, 2000
  
 
   Historical
   Pro Forma
Adjustments(a)
   Pro Forma
  
Net sales   $ 803.9   $ (121.8 ) $ 682.1  
  Cost of goods sold     423.2     (102.6 )   320.6  
   
 
 
 
Gross profit     380.7     (19.2 )   361.5  
   
 
 
 
  Selling, general and administrative expenses     216.1     (11.9 )   204.2  
  Research and development expenses     54.4           54.4  
  Goodwill amortization     28.5     (7.9 )   20.6  
  Disposition of assets and other non-recurring charges, net     312.2           312.2  
  Non-recurring spin-off expenses     18.4           18.4  
  Other operating income     (14.0 )         (14.0 )
   
 
 
 
      615.6     (19.8 )   595.8  
   
 
 
 
Operating loss     (234.9 )   0.6     (234.3 )
  Interest expense     20.0           20.0  
  Other expense, net     3.6     (0.5 )   3.1  
   
 
 
 
Loss before provision for income taxes     (258.5 )   1.1     (257.4 )
  Provision for income taxes     13.0     (2.4 )   10.6  
   
 
 
 
Net loss   $ (271.5 ) $ 3.5   $ (268.0 )
   
 
 
 

Share information:
 
 
 
 
 
 
 
 
 
 

Pro forma net loss per share
 
 
 
 
 
 
 
 
 
 
  Basic        (b)       $ (4.59 )
  Diluted        (b)       $ (4.59 )

Weighted average number of common shares outstanding
 
 
 
 
 
 
 
 
 
 
  Basic        (b)         58.4  
  Diluted        (b)         58.4  

4

EDWARDS LIFESCIENCES CORPORATION
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited) ($ in millions)
March 31, 2001

 
   Historical
   Pro Forma
Adjustments
   Pro Forma
ASSETS                  

Current assets
 
 
 
 
 
 
 
 
 
  Cash and cash equivalents   $ 17.9   $ 45.0  (d) $ 62.9
  Accounts receivables, net     136.2     (20.3 )(c)   115.9
  Inventories     88.4     (11.7 )(c)   76.7
  Deferred income taxes     24.8           24.8
  Prepaid expenses and other current assets     39.1     (1.1 )(c)   38.0
   
 
 
    Total current assets     306.4     11.9     318.3
Property, plant and equipment, net     185.4     (14.0 )(c)   171.4
Investments in unconsolidated affiliates     94.4           94.4
Goodwill and other intangibles, net     503.7     (82.1 )(c)   421.6
Other assets     13.0           13.0
   
 
 
    $ 1,102.9   $ (84.2 ) $ 1,018.7
   
 
 

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 

Current liabilities
 
 
 
 
 
 
 
 
 
  Accounts payable and accrued liabilities   $ 167.4   $ (13.3 )(c) $ 154.1
  Short-term debt     61.5           61.5
   
 
 
    Total current liabilities     228.9     (13.3 )   215.6
   
 
 
Long-term debt     352.9           352.9
Other liabilities     57.1           57.1
Commitments and contingent liabilities                  

Stockholders' Equity
 
 
 
 
 
 
 
 
 
  Common Stock, $1 par value, authorized 350,000,000 shares, 58,786,662 shares outstanding     58.8           58.8
  Additional contributed capital     279.0           279.0
  Retained earnings     111.8     (70.9 )(c)   40.9
  Accumulated other comprehensive loss     14.4           14.4
   
 
 
    Total equity     464.0     (70.9 )   393.1
   
 
 
    $ 1,102.9   $ (84.2 ) $ 1,018.7
   
 
 
                   
                 
(a)
To reflect the impact on operating results from the sale of the stock of Edwards Lifesciences Cardiovascular Resources, Inc. as if the disposition had taken place on January 1 of each period.

(b)
No earnings per share data for the historical year ended December 31, 2000 is presented as the Company's earnings were part of Baxter International Inc.'s earnings through the close of business on March 31, 2000.

(c)
To record the removal of assets and liabilities of operations sold and record estimated transaction costs.

(d)
To record receipt of estimated cash proceeds of $45 million.

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        (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
2.1   Stock Purchase Agreement, dated as of June 1, 2001 between Edwards Lifesciences (U.S.) Inc., a Delaware corporation, Franconia Acquisition LLC, a Delaware limited liability company and Fresenius Medical Care Holdings, Inc. a New York corporation.

99.1
 
Edwards Lifesciences Corporation press release dated July 2, 2001.

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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: July 16, 2001
 
By:
 
/s/ BRUCE J. BENTCOVER   
        Name: Bruce J. Bentcover
Title: Corporate Vice President,
Chief Financial Officer and Treasurer

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EDWARDS LIFESCIENCES CORPORATION

INDEX TO EXHIBITS

EXHIBIT
NUMBER
   EXHIBIT

2.1
 
Stock Purchase Agreement, dated as of June 1, 2001 between Edwards Lifesciences (U.S.) Inc., a Delaware corporation, Franconia Acquisition LLC, a Delaware limited liability company and Fresenius Medical Care Holdings, Inc., a New York corporation.

99.1
 
Edwards Lifesciences Corporation press release dated July 2, 2001.


QuickLinks

EDWARDS LIFESCIENCES CORPORATION PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF INCOME (unaudited) (in millions, except per share data)
EDWARDS LIFESCIENCES CORPORATION PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET (unaudited) ($ in millions) March 31, 2001
SIGNATURES
EDWARDS LIFESCIENCES CORPORATION INDEX TO EXHIBITS