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To: Freedom Fighter who wrote (936)11/3/1998 8:28:00 PM
From: porcupine --''''>  Respond to of 1722
 
Boston Scientific's Japanese Subsidiary Improperly Booked Sales--AP

Boston Scientific Checks Records

November 3, 1998

By The Associated Press

NATICK, Mass. (AP) -- Shares of Boston Scientific Corp.
fell 11 percent Tuesday, as the company said it had
discovered accounting irregularities involving
improperly recorded sales at its Japanese subsidiary.

The problem involves shipments of products that have
been improperly recorded as sales, the company said.
Officials believe $40 million to $50 million in sales
may have been improperly recorded in the nine-month
period ending Sept. 30, 1998.

Boston Scientific, which makes medical devices
including coronary stents, believes an additional $40
million in shipments was improperly recorded in earlier
periods.

Dow Jones News Service reported that rumors of the
accounting troubles began circulating Monday as the
company disclosed to some investors that Jim Corbett,
president of Boston Scientific International, had
resigned.

The company said it believes the irregularities are
limited to operations in Japan. Company officials said
they are investigating the irregularities, a process
they expect to take several weeks.

Shares of Boston Scientific fell $5.87 1/2, to close at
$46.37 1/2 on the New York Stock Exchange. The
company's stock hit a 52-week high of $81.68 3/4 in
late August, but has been battered since then by
several problems. In October, the company voluntarily
recalled one of its stents after reports that the
angioplasty balloon that fitted the stent into place
leaked.



To: Freedom Fighter who wrote (936)11/3/1998 8:42:00 PM
From: porcupine --''''>  Read Replies (1) | Respond to of 1722
 
Makers of Surgical Devices in Stock Deal Valued at $3.6 Billion

By MILT FREUDENHEIM -- November 3, 1998

NEW YORK -- In a strategic shift, Medtronic Inc.,
the biggest maker of heartbeat regulators, said
Monday that it had agreed to buy the Sofamor Danek
Group for $3.6 billion in Medtronic stock.

Medtronic said the deal would double its stake in
devices for brain and spine surgery at a time when
sales growth has slowed in its core business in
pacemakers and other devices that fine-tune heart
performance.

Revenue of Sofamor Danek, which is based in Memphis,
has been growing four times as fast as sales of
Medtronic, an older, much bigger company that is based
in Minneapolis.

Medtronic had already begun altering its thrust by
hiring more sales people to visit orthopedic spine
surgeons and neurosurgeons. The surgeons are Sofamor
Danek's main customers.

Sofamor Danek has about 40 percent of a
$1-billion-a-year surgical device market, which is
growing 22 percent to 25 percent a year, said E. Ronald
Pickard, chairman and chief executive of Sofamor. By
contrast, sales of cardiovascular devices are growing
in "the high single digits," said William W. George,
chairman and chief executive of Medtronic.

Johnson & Johnson will have about 20 percent of the
spinal implant market when it completes its recently
announced acquisition of DePuy Inc., said Rick Wise, an
analyst at Bear Stearns & Co.

Sofamor projects sales of $400 million this year,
mainly in hardware like rods and screws, which hold
together damaged vertebrae, and an imaging device for
brain surgery. About 15 percent, or $400 million, of
Medtronic's $2.6 billion sales are in related
businesses, including pain management devices and
electronic stimulators to treat tremors.

"Sofamor Danek has a tremendous position in a field
that will complement what we were doing," George said.
"They have lots of the same customers who we've worked
with for years."

Several analysts hailed the deal, which valued Sofamor
Danek at $115 a share, or 13 percent above its closing
price on Friday on the New York Stock Exchange. On
Monday, Sofamor Danek shares rose $8.50, to $110.125.
Medtronic shares rose $1.5625 cents, to $66.5625, on
the Big Board.

Under the deal, the price per share for Sofamor will be
adjusted if Medtronic shares trade below $56.97 or
above $69.63 in the 15 days before Sofamor Danek
shareholders meet to vote on the acquisition.

Kurt Kruger, an analyst in San Francisco at Nationsbanc
Montgomery Securities, said Sofamor Danek could add $40
million in sales next year if it receives federal
regulatory approval for a new spinal implant device to
relieve back pain. Analysts are predicting approval
early in 1999 for the device, which is called a spinal
cage.

Last year, an advisory committee of the Food and Drug
Administration sent Sofamor back to the drawing board
to improve the cage, which Kruger described as an
ultra-strong metal column an inch long and the diameter
of a cigar. Similar devices are already being sold by
the Spinetech unit that was recently acquired by Sulzer
Medica, a unit of Sulzer Ltd. of Switzerland, and the
AcroMed unit that Johnson & Johnson is buying as part
of DePuy Inc.

As part of a reshuffling trend in heart devices, the
Guidant Corp. recently agreed to buy a heart rhythm
device business from Sulzer Medica.

"Medtronic and Sofamor Danek are an excellent fit,"
Wise of Bear Stearns said. "No other competitor has the
unique portfolio of electronic stimulation, surgical
and spinal devices that the combined companies will
have."

Franz Tudor, an analyst at Oracle Partners, a health
care investment group, said the deal made sense. But he
said the opportunities for cost savings were limited
because of little overlap between the two companies in
manufacturing, sales and administration and research.

A state court in Houston recently awarded $400,000 to
plaintiffs who claimed injuries from a screw made by
Sofamor. Pickard said the device was used in a way not
recommended on the FDA-approved label. He said Sofamor
had disposed of more than 1,100 such lawsuits, winning
50 summary judgments and paying less than $2,000 each
in some 40 cases. The company intends to defend 2,000
remaining cases vigorously, he said.

Copyright 1998 The New York Times Company



To: Freedom Fighter who wrote (936)11/3/1998 8:50:00 PM
From: porcupine --''''>  Respond to of 1722
 
Paid Newspaper Circulation in U.S. Continues to Decline

By FELICITY BARRINGER -- November 3, 1998

After a small hiccup upward last spring, daily and
Sunday newspaper circulation continued to decline,
according to figures released Monday, but the group
that has kept these unflattering industry measurements
is on the verge of giving publishers a chance to
supplement the old numbers with new data about their
sales and readership.

Paid circulation is now down almost 11 percent from its
1984 peak of 63.3 million readers, according to a
report from the Audit Bureau of Circulations. For the
six months ended Sept. 30, total paid circulation was
down three-tenths of a percent compared with figures
from the period a year earlier. Sunday circulation
slipped more than twice as fast, down eight-tenths of a
percent.

At a meeting later this week, the governing board of
the audit bureau is expected to give preliminary
approval to the first new reporting format in years,
enabling publishers to supplement their standard
reports with an additional set of "total distribution"
figures, which would include heavily discounted and
complimentary copies not counted in the current paid
circulation figures.

For instance, The Wall Street Journal, published by Dow
Jones, has prepared a "statement of total circulation"
for the six-month period ended in March. The total
circulation listed was more than 75,000 more than the
newspaper's official paid circulation.

For more than a year, some publishers have been seeking
to expand the formal reporting options offered by the
audit bureau, whose 34-member governing board includes
advertisers and newspaper and magazine publishers. A
second vote expected this week is likely to approve
standardized readership surveys.

"There is no question that many in the industry have
been frustrated and searching for new and better ways
to grow circulation," said Jeremy L. Halbreich, the
former president and general manager of The Dallas
Morning News, who is moderating a debate on the
question at the audit bureau's annual meeting later
this week. The Dallas paper is owned by the A.H. Belo
Corp.

"This is not a palliative for that," he added. "It's a
recognition that in today's media market place, the
competition is stiffer than ever before. For certain
segments of the potential audience, newspapers need
some additional marketing flexibility."

After years of decline in paid circulation -- which
audit bureau regulations define as copies sold at a
discount of 50 percent or less off the newsstand price
-- industry executives had taken some comfort from the
figures released in March, which showed the first
overall gain in paid circulation in years. Monday's
circulation report, however, was a sobering reminder of
the difficulty the business has competing for attention
with television, radio, the Internet, magazines and
other distractions.

Three of the five largest newspapers in the country saw
circulation declines, including a steep drop of 25,000
copies at The Wall Street Journal, the nation's
best-selling newspaper. The Journal's average daily
circulation dropped almost 2 percent, to 1,740,450 from
1,774,880 in the period a year earlier.

The New York Times and The Washington Post also
registered declines. The Times dropped to 1,066,658,
down more than 0.7 percent from 1,074,741 in the period
a year earlier. The drop put it behind The Los Angeles
Times, which is owned by the Times Mirror Co.

The Los Angeles Times saw its average circulation gain
1.7 percent, to 1,067,540.

The Washington Post reported a circulation of 759,122,
down 1.8 percent from its September 1997 total of
772,937.

Sunday circulation at The New York Times and The
Washington Post also decreased. Sunday circulation at
The Times sank to 1,627,099, down almost 2 percent,
from 1,658,718 in the period a year earlier. The Post's
Sunday circulation dropped to 1,090,082, down about 1.7
percent from its 1997 total of 1,099,174.

Among the top five newspapers, Gannett's USA Today
continued its long upward trend, with circulation
rising to 1,653,428, up 1.5 percent from 1,629,665 last
year.

The report, said John Morton, an industry analyst who
runs his own firm, Morton Research, in Maryland, "shows
the continued weakness in newspaper circulation."

"It shows the sluggishness in circulation continues
unabated," he added. "These figures are a hangover of
the time when everybody was raising their rates so
rapidly. In the good old days, it used to take six or
eight months to recover form a price increase. Now it
takes anywhere from two to three years."

But John Sturm, the executive director of the Newspaper
Association of America, said that over all the
September losses were more than offset by the March
gains, making the year's results "basically flat." He
acknowledged, however, that he had thought the
September figures would show "more positive territory."

Copyright 1998 The New York Times Company



To: Freedom Fighter who wrote (936)11/3/1998 8:54:00 PM
From: porcupine --''''>  Respond to of 1722
 
Leading Indicators Are Unchanged

By The Associated Press

NEW YORK (AP) -- A key measure of future economy
activity was unchanged in September for the second
straight month.

The Conference Board, a private research group,
reported today that its Index of Leading Economic
Indicators held at 105.5 in September, the same level
as in July and August. The figure was a surprise to
economists who had expected a slight decrease.

Combined with the performance of two sister indicators,
the leading index shows the economy will continue to
grow at a slow pace, the Conference Board said.

''The economy will be hard-pressed to match the robust
growth posted the past few years,'' said Michael
Boldin, a Conference Board economist. ''Still, the
leading index is considerably higher now compared with
last year, and rising consumer spending and low
interest rates should keep us out of a recession.''

The report came after the government last week reported
surprising economic growth for the third quarter,
fueled by robust consumer spending. In addition, the
Federal Reserve has lowered key short-term interest
rates twice since Sept. 29 in an attempt to defend the
economy from the growing global financial crisis.

The leading index is designed to forecast economic
activity six to nine months in advance. Five of its 10
components fell in September, led by stock prices.

But the Dow Jones industrial average last month posted
its biggest one-month gain in 11 years, suggesting
there will be a turnaround of the leading index's
recent sluggish performance.

''The recovery in the stock market should lift the
leading indicators and support the economy,'' said Gary
Thayer, senior economist at A.G. Edwards & Sons Inc. in
St. Louis.

Four components, led by money supply, posted increases.
The average factory work week remained steady.

The report had little impact on Wall Street, where the
Dow finished unchanged at 8,706.15 in a listless
session.

The board's index of coincident indicators for
September, which looks at the economy's current
condition, also remained unchanged from August. The
lagging indicators index, which looks at the past,
decreased.

The leading index operates from a base of 100, set in
1992. First calculated in the late 1960s, it is
periodically fine-tuned and figures from past years are
revised.