UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended January 24, 2003 |
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Commission File Number 1-7707
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MEDTRONIC, INC. |
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(Exact name of registrant as specified in its charter) |
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Minnesota |
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41-0793183 |
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(State of incorporation) |
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(I.R.S. Employer |
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710 Medtronic Parkway |
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(Address of principal executive offices) |
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Telephone number: (763)514-4000 |
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Indicate by check 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 ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o
Shares of common stock, $0.10 par value, outstanding on February 21, 2003: 1,219,525,112
PART I—FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
MEDTRONIC, INC.
STATEMENTS OF CONSOLIDATED EARNINGS
(Unaudited)
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Three months ended |
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Nine months ended |
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January
24, |
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January
25, |
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January
24, |
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January
25, |
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(in millions, except per share data) |
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Net sales |
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$ |
1,912.5 |
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$ |
1,592.4 |
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$ |
5,517.4 |
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$ |
4,619.3 |
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Costs and expenses: |
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Cost of products sold |
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474.8 |
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412.8 |
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1,349.7 |
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1,195.9 |
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Research and development expense |
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187.1 |
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163.4 |
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560.0 |
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476.8 |
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Selling, general, and administrative expense |
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587.8 |
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493.5 |
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1,722.5 |
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1,417.5 |
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Purchased in-process research and development (IPR&D) |
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— |
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32.7 |
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114.2 |
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293.0 |
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Special charges |
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— |
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30.4 |
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2.5 |
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101.6 |
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Other (income)/expense, net |
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48.5 |
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3.5 |
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119.6 |
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31.0 |
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Interest (income)/expense, net |
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3.2 |
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13.0 |
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3.4 |
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1.7 |
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Total costs and expenses |
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1,301.4 |
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1,149.3 |
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3,871.9 |
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3,517.5 |
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Earnings before income taxes |
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611.1 |
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443.1 |
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1,645.5 |
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1,101.8 |
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Provision for income taxes |
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183.4 |
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128.2 |
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532.8 |
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418.7 |
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Net earnings |
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$ |
427.7 |
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$ |
314.9 |
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$ |
1,112.7 |
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$ |
683.1 |
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Earnings per share: |
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Basic |
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$ |
0.35 |
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$ |
0.26 |
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$ |
0.91 |
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$ |
0.56 |
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Diluted |
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$ |
0.35 |
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$ |
0.26 |
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$ |
0.91 |
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$ |
0.56 |
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Weighted average shares outstanding: |
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Basic |
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1,220.5 |
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1,212.4 |
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1,217.2 |
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1,210.7 |
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Diluted |
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1,232.8 |
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1,225.5 |
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1,227.0 |
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1,223.7 |
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See accompanying notes to the condensed consolidated financial statements.
2
MEDTRONIC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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January
24, |
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April 26, |
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(in millions except per share data) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
1,468.6 |
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$ |
410.7 |
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Short-term investments |
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16.7 |
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123.0 |
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Accounts receivable, less allowances of $83.5 and $77.5, respectively |
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1,721.6 |
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1,522.5 |
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Inventories |
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994.1 |
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748.1 |
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Deferred tax assets, net |
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173.0 |
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324.4 |
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Prepaid expenses and other current assets |
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203.8 |
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359.3 |
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Total current assets |
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4,577.8 |
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3,488.0 |
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Property, plant, and equipment |
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2,790.9 |
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2,489.1 |
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Accumulated depreciation |
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(1,249.1 |
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(1,037.3 |
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Net property, plant, and equipment |
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1,541.8 |
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1,451.8 |
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Goodwill |
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4,176.0 |
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4,034.6 |
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Patents and other intangible assets, net |
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1,042.1 |
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1,060.3 |
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Long-term investments |
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348.0 |
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637.0 |
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Other assets |
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227.5 |
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232.8 |
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Total assets |
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$ |
11,913.2 |
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$ |
10,904.5 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Short-term borrowings |
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$ |
419.6 |
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$ |
2,516.1 |
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Accounts payable |
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300.4 |
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268.2 |
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Accrued compensation |
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