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Bio-Rad Laboratories, Inc. (BIO) Reports Fourth-Quarter And Full-Year 2013 Financial Results


2/28/2014 9:46:51 AM

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HERCULES, CA--(Marketwired - February 27, 2014) - Bio-Rad Laboratories, Inc. (NYSE: BIO) (NYSE: BIO.B), a global manufacturer and distributor of life science research and clinical diagnostic products, announced financial results today for the fourth quarter and fiscal year ended December 31, 2013.

Fourth-quarter 2013 reported revenues were $602.6 million, up 5.0% compared to $573.8 million reported for the fourth quarter of 2012. These results included $6.0 million of sales resulting from the Company's acquisition of AbD Serotec in January 2013. On a currency-neutral basis, quarterly revenues increased 5.7% compared to the same period in 2012. Fourth-quarter gross margin was 53.6% compared to 54.8% during the same quarter in 2012.

Net income for the fourth quarter of 2013 was $30.1 million, or $1.04 per share on a fully diluted basis, compared to $43.3 million, or $1.51 per share during the same period in 2012. These results included an accrued expense of $15 million in connection with the Company's efforts to resolve the previously disclosed investigation of the Company in connection with the United States Foreign Corrupt Practices Act; this is in addition to an accrued expense of $20 million in the third quarter of 2013.

For the full year of 2013, sales were $2,132.7 million compared to $2,069.2 million in 2012, an increase of 3.1%, or 3.9% on a currency neutral basis.

Full-year net income in 2013 was $77.8 million, or $2.69 per share on a fully diluted basis, compared to $165.5 million, or $5.78 per share in 2012. Full-year gross margin was 55.3% compared to 55.8% reported in 2012. The decrease in net income in 2013 was primarily due to higher SG&A expenses resulting from employee expenses associated with acquisitions; the $35 million legal accrual mentioned above, which includes $5 million in interest; and expenses associated with the enterprise resource planning (ERP) implementation. Also in 2013, interest expense increased primarily due to our decision to redeem certain bonds in the third quarter of 2013, which resulted in related expenses of $15.6 million.

In addition, certain events occurred during 2012 that favorably impacted results that year and include reductions in the valuation of the contingent consideration associated with the QuantaLife acquisition of $16.1 million, as well as higher "other income" resulting from certain investment gains.

"Even though 2013 results were negatively impacted by some one-time events, we are encouraged by the results in the fourth quarter, which reflect strength across many of our product lines," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "Our 2013 results were also tempered by continued investments in new products and systems that will provide the company greater operating leverage for the future."

Life Science
The Life Science segment net sales for the fourth quarter were $220.5 million, up 8.0% compared to the same period in 2012. On a currency-neutral basis, Life Science segment sales increased by 9.4%. The sales increase during the quarter was primarily driven by sales of antibodies and reagents from the Company's acquisition of AbD Serotec, the QX200™ Droplet Digital™ PCR (ddPCR) system, as well as other recently introduced products including the NGC™ family of chromatography systems and the S3™ cell sorter. During the quarter Bio-Rad's installed base of ddPCR systems exceeded 500 units; the system has been featured in 75-peer-reviewed publications since it was first introduced. Full-year reported revenues for the Life Science segment were $710 million, up 3.1% compared to 2012, or an increase of 4.5% on a currency-neutral basis.

Clinical Diagnostics
The Clinical Diagnostics segment reported net sales of $377.9 million for the fourth quarter, up 3.3% compared to the same period in 2012. On a currency-neutral basis, net sales were up 3.6%. Performance in the Clinical Diagnostics segment in the fourth quarter reflected growth across all product lines, most notably the Company's quality controls, diabetes monitoring, and autoimmune testing products. Full-year reported revenues for the Clinical Diagnostics segment were $1,408.0 million, up 3.1% compared to the same period in 2012. On a currency-neutral basis, full-year sales increased 3.6% compared to 2012.

2013 Full-Year Highlights

  • Full-year, sales were $2,132.7 million compared to $2,069.2 million in 2012. After normalizing for the impact of currency effects, full year revenues increased 3.9%.
  • Year-over-year net income was $77.8 million, or $2.69 per share on a fully diluted basis, compared to $165.5 million, or $5.78 per share in 2012.
  • In January, Bio-Rad purchased AbD Serotec, one of the world's leading antibody manufacturers offering over 15,000 antibodies, kits, and accessories.
  • During the second quarter, the Company introduced the S3 cell sorter, an easy-to-use, automated and affordable benchtop cell sorter designed for both core facilities and individual research labs.
  • Also in the second quarter, Bio-Rad launched the Geenius™ HIV 1/2 Confirmatory for markets outside the U.S. The Geenius HIV 1/2 Confirmatory is a complete system that offers several advantages over classic confirmatory methods.
  • In July, the Company launched its PrimePCR™ assays for Droplet Digital PCR. These new predesigned assays for mutation detection and copy number variation have been experimentally validated to provide single-copy PCR resolution without a standard curve.
  • In October, Bio-Rad launched its TGX™ FastCast™ and TGX Stain-Free™ FastCast™ acrylamide kits for gel electrophoresis, which provide researchers who handcast their own gels access to Bio-Rad's TGX gel chemistry, previously available only in precast gels.

In connection with the engagement of new auditors during the third quarter of 2013, the Company will delay the filing of its Form 10-K for the year ended December 31, 2013, to allow the newly appointed auditors adequate time to complete their procedures related to the Company's financials for 2013. Bio-Rad will file a Notification of Late Filing on Form 12b-25 with the Securities and Exchange Commission.

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) February 27, 2014. Interested parties may access the call by dialing 866-314-5232 (in the U.S.) or 617-213-8052 (international), access number 92640314.

A live webcast of the conference call may be accessed in the "Investor Relations" section 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 92261486, 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" section of www.bio-rad.com.

About Bio-Rad
Bio-Rad Laboratories, Inc. (NYSE: BIO) (NYSE: BIO.B) designs, manufactures, and distributes a broad range of innovative products and solutions for the 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 healthcare industry customers through its global network of operations. The company employs approximately 7,750 people worldwide and had revenues exceeding $2 billion in 2013. For more information, visit our website 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 and Quarterly Reports on Form 10-Q. 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 Income                 
                                                                            
                   (in thousands, except per share data)                    
                                (UNAUDITED)                                 
                                                                            
                            Three Months Ended            Year Ended        
                               December 31,              December 31,       
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
Net sales                $   602,635  $   573,839  $ 2,132,694  $ 2,069,235 
  Cost of goods sold         279,886      259,293      954,216      914,077 
                         -----------  -----------  -----------  ----------- 
Gross profit                 322,749      314,546    1,178,478    1,155,158 
                                                                            
  Selling, general and                                                      
   administrative                                                           
   expense                   214,584      188,865      798,070      681,778 
  Research and                                                              
   development expense        55,848       58,567      210,952      209,204 
                         -----------  -----------  -----------  ----------- 
Income from operations        52,317       67,114      169,456      264,176 
                                                                            
  Interest expense             7,019       13,614       61,271       51,112 
  Foreign exchange                                                          
   losses, net                 2,843        1,532        8,566        5,040 
  Other (income)                                                            
   expense, net               (2,055)      (7,191)     (12,766)     (21,883)
                         -----------  -----------  -----------  ----------- 
Income before income                                                        
 taxes                        44,510       59,159      112,385      229,907 
                                                                            
  Provision for income                                                      
   taxes                     (14,374)     (15,986)     (34,574)     (64,361)
                         -----------  -----------  -----------  ----------- 
Net income including                                                        
 noncontrolling                                                             
 interests                    30,136       43,173       77,811      165,546 
                                                                            
  Net loss (income)                                                         
   attributable to                                                          
   noncontrolling                                                           
   interests                       -           79          (21)         (69)
                         -----------  -----------  -----------  ----------- 
Net income attributable                                                     
 to Bio-Rad              $    30,136  $    43,252  $    77,790  $   165,477 
                         ===========  ===========  ===========  =========== 
                                                                            
Basic earnings per                                                          
 share:                                                                     
  Net income per basic                                                      
   share attributable to                                                    
   Bio-Rad               $      1.05  $      1.52  $      2.72  $      5.85 
                         ===========  ===========  ===========  =========== 
                                                                            
  Weighted average                                                          
   common shares - basic      28,708       28,394       28,586       28,290 
                         ===========  ===========  ===========  =========== 
                                                                            
Diluted earnings per                                                        
 share:                                                                     
  Net income per diluted                                                    
   share attributable to                                                    
   Bio-Rad               $      1.04  $      1.51  $      2.69  $      5.78 
                         ===========  ===========  ===========  =========== 
                                                                            
  Weighted average                                                          
   common shares -                                                          
   diluted                    28,988       28,712       28,906       28,642 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                         Bio-Rad Laboratories, Inc.                         
                    Condensed Consolidated Balance Sheets                   
                                                                            
                               (In thousands)                               
                                                                            
                                                December 31,   December 31, 
                                                    2013           2012     
                                               -------------- --------------
                                                 (UNAUDITED)                
Current assets:                                                             
  Cash and cash equivalents                    $      331,551 $      463,388
  Short-term investments                              277,369        457,685
  Accounts receivable, net                            422,660        398,739
  Inventories, net                                    501,291        455,120
  Other current assets                                214,985        161,750
                                               -------------- --------------
    Total current assets                            1,747,856      1,936,682
                                                                            
Property, plant and equipment, net                    429,355        416,938
Goodwill, net                                         517,770        495,418
Purchased intangibles, net                            266,188        260,939
Other assets                                          427,621        333,526
                                               -------------- --------------
    Total assets                               $    3,388,790 $    3,443,503
                                               ============== ==============
                                                                            
                                                                            
Current liabilities:                                                        
  Accounts payable                             $      148,510 $      130,867
  Accrued payroll and employee benefits               130,658        135,955
  Notes payable and current maturities of                                   
   long-term debt                                       1,786          1,750
  Income and other taxes payable                       33,555         34,779
  Other current liabilities                           172,963        169,049
                                               -------------- --------------
    Total current liabilities                         487,472        472,400
                                                                            
Long-term debt, net of current maturities             435,615        732,414
Other long-term liabilities                           278,981        223,149
                                               -------------- --------------
    Total liabilities                               1,202,068      1,427,963
                                               -------------- --------------
                                                                            
Bio-Rad stockholders' equity                        2,186,722      2,015,005
Noncontrolling interests                                    -            535
                                               -------------- --------------
    Total stockholders' equity                      2,186,722      2,015,540
                                               -------------- --------------
    Total liabilities and stockholders' equity $    3,388,790 $    3,443,503
                                               ============== ==============
                                                                            
                                                                            
                         Bio-Rad Laboratories, Inc.                         
              Condensed Consolidated Statements of Cash Flows               
                                                                            
                               (In thousands)                               
                                                                            
                                                        Year Ended          
                                                       December 31,         
                                                                            
                                                    2013           2012     
                                               -------------  ------------- 
                                                (UNAUDITED)                 
Cash flows from operating activities:                                       
  Cash received from customers                 $   2,090,030  $   2,063,805 
  Cash paid to suppliers and employees            (1,797,688)    (1,654,943)
  Interest paid                                      (61,233)       (46,369)
  Income tax payments                                (71,144)       (93,697)
  Other operating activities                          15,511          7,232 
                                               -------------  ------------- 
  Net cash provided by operating activities          175,476        276,028 
                                                                            
Cash flows from investing activities:                                       
  Payments for acquisitions and long-term                                   
   investments                                       (72,054)       (39,443)
  Other investing activities                          66,633       (370,491)
                                               -------------  ------------- 
  Net cash used in investing activities               (5,421)      (409,934)
                                                                            
Cash flows from financing activities:                                       
  Payments on long-term borrowings                  (300,228)          (620)
  Other financing activities                         (11,469)        13,208 
                                               -------------  ------------- 
  Net cash (used in) provided by financing                                  
   activities                                       (311,697)        12,588 
                                                                            
Effect of foreign exchange rate changes on                                  
 cash                                                  9,805         10,475 
                                               -------------  ------------- 
                                                                            
Net decrease in cash and cash equivalents           (131,837)      (110,843)
Cash and cash equivalents at beginning of year       463,388        574,231 
                                               -------------  ------------- 
Cash and cash equivalents at end of year       $     331,551  $     463,388 
                                               =============  ============= 
                                                                            
                                                                            
Reconciliation of net income including                                      
 noncontrolling interests to                                                
net cash provided by operating activities:                                  
                                                                            
Net income including noncontrolling interests  $      77,811  $     165,546 
Adjustments to reconcile net income including                               
 noncontrolling interests                                                   
to net cash provided by operating activities:                               
    Depreciation and amortization                    147,157        130,424 
    Changes in working capital                       (66,610)        (4,506)
    Other                                             17,118        (15,436)
                                               -------------  ------------- 
Net cash provided by operating activities      $     175,476  $     276,028 
                                               =============  ============= 
                                                                            

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



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