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Bio-Rad Laboratories, Inc. (BIO) Reports Third-Quarter 2013 Financial Results


11/8/2013 9:01:39 AM

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HERCULES, CA--(Marketwired - November 07, 2013) - Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIO.B), a multinational manufacturer and distributor of life science research and clinical diagnostic products, announced financial results today for the third quarter ended September 30, 2013.

Third-quarter reported revenues were $505.1 million, an increase of 1.3% compared to $498.7 million reported for the third quarter of 2012. These results include $5.5 million of sales resulting from the Company's acquisition of AbD Serotec in January 2013. On a currency-neutral basis, quarterly revenues increased 1.8% compared to the same period last year. Third-quarter gross margin was 56.3%, compared to 54.9% during the same quarter in 2012.

The Company recorded a net loss for the third quarter of ($7.1) million, or ($0.25) per share on a fully diluted basis versus net income of $42.6 million, or $1.49 per share reported for the same period last year. These results include interest expense of $15.6 million associated with our decision to redeem certain bonds in the third quarter of 2013 as well as the recording of an accrued expense of $20 million in connection with the Company's initial efforts to resolve the previously disclosed investigation of the Company in connection with the United States Foreign Corrupt Practices Act.

Year-to-date revenues were $1.53 billion, an increase of 2.3% compared to $1.50 billion reported in the first three quarters of 2012. Adjusting for the impact of currency, year-to-date revenue growth was 3.1%.

Year-to-date net income for the first three quarters of 2013 was $47.7 million, or $1.65 per share on a fully diluted basis compared to $122.2 million, or $4.27 per share reported during the same period in 2012.

In addition to the impact of the bond redemption and legal accrual mentioned above, the lower net income in the third quarter and year-to-date of 2013, when compared to the third quarter and year-to-date of 2012, was the result of higher SG&A expense, primarily due to employee expenses associated with acquisitions; expenses associated with the enterprise resource planning (ERP) implementation; as well as certain events that occurred during the first three quarters of 2012 that favorably impacted results in 2012 including reductions in the valuation of the contingent consideration associated with the QuantaLife acquisition of $8.5 million in the third quarter of 2012 and $16.0 million in the nine months ended September 30, 2012.

"As anticipated, third-quarter results continued the modest pace of growth set in the first half of the year," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "We continued to see a softness in some of our markets this quarter, which impacted our results. Although we expect more of the same for the rest of 2013, we remain focused on new products and investments in our future."

Life Science
The Life Science segment net sales for the third quarter were $162.9 million, down 2.5% compared to the same period last year. On a currency-neutral basis, Life Science segment sales decreased by 1.2% compared to the third quarter of 2012. Third-quarter 2013 results reflected continued slowness in the research spending environment. Performance of the Life Science segment was positively impacted by sales of antibodies and reagents from the Company's acquisition of AbD Serotec, as well as sales of biochromatography and cell sorting instruments.

Clinical Diagnostics
Reported net sales for the Clinical Diagnostics segment in the third quarter were $338.8 million, an increase of 3.2% compared to the third quarter in 2012 on both a reported and currency-neutral basis. During the quarter, the Clinical Diagnostics segment had growth across most product lines most notably from quality controls, diabetes, and autoimmune products. Strength in China and Latin America markets was offset by weakness of sales in Western Europe.

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) November 7, 2013. Interested parties may access the call at 866-543-6403 (in the U.S.) or 617-213-8896 (international), access number 45118924.

A live webcast of the conference call may be accessed in the Investor Relations area of www.bio-rad.com. A replay of the call will be available at 888-286-8010 (in the U.S.) or 617-801-6888 (international), access number 78604858, for seven days following the call. The webcast of the call will be archived on the Bio-Rad site for replay for up to a year and may be accessed in the Investor Relations area of www.bio-rad.com.

About Bio-Rad
Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIO.B) has been at the center of scientific discovery for 60 years, manufacturing and distributing a broad range of products for life science research and clinical diagnostic markets. The company is renowned for its commitment to quality and customer service among university and research institutions, hospitals, public health and commercial laboratories, as well as the biotechnology, pharmaceutical, and food safety industries. Founded in 1952, Bio-Rad is based in Hercules, California, and serves more than 100,000 research and industry customers through its global network of operations. The company employs approximately 7,600 people worldwide and had revenues exceeding $2 billion in 2012. Visit us at www.bio-rad.com.

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. For further information regarding the Company's risks and uncertainties, please refer to the "Risk Factors" in the Company's public reports filed with the Securities and Exchange Commission, including the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. The Company cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. Bio-Rad Laboratories, Inc., disclaims any obligation to update these forward-looking statements.

                                                                            
                         Bio-Rad Laboratories, Inc.                         
              Condensed Consolidated Statements of Operations               
                                                                            
                   (in thousands, except per share data)                    
                                (UNAUDITED)                                 
                                                                            
                            Three Months Ended         Nine Months Ended    
                               September 30,             September 30,      
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
Net sales                $   505,066  $   498,697  $ 1,530,059  $ 1,495,396 
  Cost of goods sold         220,850      224,927      674,330      654,784 
                         -----------  -----------  -----------  ----------- 
Gross profit                 284,216      273,770      855,729      840,612 
                                                                            
  Selling, general and                                                      
   administrative                                                           
   expense                   202,238      160,134      583,486      492,913 
  Research and                                                              
   development expense        52,920       47,795      155,104      150,637 
                         -----------  -----------  -----------  ----------- 
Income from operations        29,058       65,841      117,139      197,062 
                                                                            
  Interest expense            31,611       11,901       54,252       37,498 
  Foreign exchange                                                          
   losses, net                 3,330          448        5,723        3,508 
  Other (income)                                                            
   expense, net                 (667)      (1,511)     (10,711)     (14,692)
                         -----------  -----------  -----------  ----------- 
(Loss) income before                                                        
 income taxes                 (5,216)      55,003       67,875      170,748 
                                                                            
  Provision for income                                                      
   taxes                      (1,883)     (12,383)     (20,200)     (48,375)
                         -----------  -----------  -----------  ----------- 
Net (loss) income                                                           
 including                                                                  
 noncontrolling                                                             
 interests                    (7,099)      42,620       47,675      122,373 
                                                                            
  Net (income) loss                                                         
   attributable to                                                          
   noncontrolling                                                           
   interests                       -           13          (21)        (148)
                         -----------  -----------  -----------  ----------- 
Net (loss) income                                                           
 attributable to Bio-Rad $    (7,099) $    42,633  $    47,654  $   122,225 
                         ===========  ===========  ===========  =========== 
                                                                            
Basic (loss) earnings                                                       
 per share:                                                                 
  Net (loss) income per                                                     
   basic share                                                              
   attributable to Bio-                                                     
   Rad                   $     (0.25) $      1.51  $      1.67  $      4.33 
                         ===========  ===========  ===========  =========== 
                                                                            
  Weighted average                                                          
   common shares - basic      28,603       28,312       28,545       28,255 
                         ===========  ===========  ===========  =========== 
                                                                            
Diluted (loss) earnings                                                     
 per share:                                                                 
  Net (loss) income per                                                     
   diluted share                                                            
   attributable to Bio-                                                     
   Rad                   $     (0.25) $      1.49  $      1.65  $      4.27 
                         ===========  ===========  ===========  =========== 
                                                                            
  Weighted average                                                          
   common shares -                                                          
   diluted                    28,603       28,645       28,870       28,609 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
                         Bio-Rad Laboratories, Inc.                         
                    Condensed Consolidated Balance Sheets                   
                                                                            
                               (In thousands)                               
                                                                            
                                                September 30,  December 31, 
                                                    2013           2012     
                                               -------------- --------------
                                                 (UNAUDITED)                
Current assets:                                                             
  Cash and cash equivalents                    $      291,793 $      463,388
  Short-term investments                              270,027        457,685
  Accounts receivable, net                            383,471        398,739
  Inventories, net                                    523,503        455,120
  Other current assets                                205,749        161,750
                                               -------------- --------------
    Total current assets                            1,674,543      1,936,682
                                                                            
Property, plant and equipment, net                    425,076        416,938
Goodwill, net                                         513,705        495,418
Purchased intangibles, net                            276,054        260,939
Other assets                                          391,030        333,526
                                               -------------- --------------
    Total assets                               $    3,280,408 $    3,443,503
                                               ============== ==============
                                                                            
                                                                            
Current liabilities:                                                        
  Accounts payable                             $      131,899 $      130,867
  Accrued payroll and employee benefits               133,218        135,955
  Notes payable and current maturities of                                   
   long-term debt                                       1,705          1,750
  Income and other taxes payable                       32,424         34,779
  Other current liabilities                           163,639        169,049
                                               -------------- --------------
    Total current liabilities                         462,885        472,400
                                                                            
Long-term debt, net of current maturities             435,541        732,414
Other long-term liabilities                           257,742        223,149
                                               -------------- --------------
    Total liabilities                               1,156,168      1,427,963
                                               -------------- --------------
                                                                            
Bio-Rad stockholders' equity                        2,124,240      2,015,005
Noncontrolling interests                                    -            535
                                               -------------- --------------
    Total stockholders' equity                      2,124,240      2,015,540
                                               -------------- --------------
    Total liabilities and stockholders' equity $    3,280,408 $    3,443,503
                                               ============== ==============
                                                                            
                                                                            
                                                                            
                         Bio-Rad Laboratories, Inc.                         
              Condensed Consolidated Statements of Cash Flows               
                                                                            
                               (In thousands)                               
                                (UNAUDITED)                                 
                                                                            
                                                    Nine Months Ended       
                                                      September 30,         
                                                  2013            2012      
                                             --------------  -------------- 
                                                                            
Cash flows from operating activities:                                       
  Cash received from customers               $    1,531,251  $    1,512,991 
  Cash paid to suppliers and employees           (1,341,006)     (1,227,911)
  Interest paid                                     (50,188)        (35,929)
  Income tax payments                               (50,140)        (77,411)
  Other operating activities                         12,118           8,504 
                                             --------------  -------------- 
  Net cash provided by operating activities         102,035         180,244 
                                                                            
Cash flows from investing activities:                                       
  Payments for acquisitions and long-term                                   
   investments                                      (68,510)        (38,479)
  Other investing activities                        105,425        (302,285)
                                             --------------  -------------- 
  Net cash provided by (used in) investing                                  
   activities                                        36,915        (340,764)
                                                                            
Cash flows from financing activities:                                       
  Payments on long-term borrowings                 (300,178)           (496)
  Other financing activities                        (15,287)          9,569 
                                             --------------  -------------- 
  Net cash (used in) provided by financing                                  
   activities                                      (315,465)          9,073 
                                                                            
Effect of foreign exchange rate changes on                                  
 cash                                                 4,920           3,673 
                                             --------------  -------------- 
                                                                            
Net decrease in cash and cash equivalents          (171,595)       (147,774)
Cash and cash equivalents at beginning of                                   
 period                                             463,388         574,231 
                                             --------------  -------------- 
Cash and cash equivalents at end of period   $      291,793  $      426,457 
                                             ==============  ============== 
                                                                            
                                                                            
Reconciliation of net income including                                      
 noncontrolling interests to net cash                                       
 provided by operating activities:                                          
                                                                            
Net income including noncontrolling                                         
 interests                                   $       47,675  $      122,373 
Adjustments to reconcile net income                                         
 including noncontrolling interests to net                                  
 cash provided by operating activities:                                     
  Depreciation and amortization                     105,181          94,885 
  Changes in working capital                        (59,545)        (31,101)
  Other                                               8,724          (5,913)
                                             --------------  -------------- 
Net cash provided by operating activities    $      102,035  $      180,244 
                                             ==============  ============== 
                                                                            
                                                                            

Investor and Financial Contacts:
Bio-Rad Laboratories, Inc.
Christine Tsingos
Executive Vice President and Chief Financial Officer
Ron Hutton
Vice President, Treasurer
510-724-7000
Email Contact



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