HERCULES, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Bio-Rad Laboratories, Inc. , a multinational manufacturer and distributor of life science research products and clinical diagnostics, announced financial results today for the third quarter ended September 30, 2005. Third-quarter net sales from continuing operations were $283.2 million, up 9.4 percent compared to the $258.8 million reported for the third quarter of 2004. On a currency-neutral basis, sales were up by 8.4 percent for the period. This growth was driven by strong sales in the areas of protein expression analysis, process chromatography, diabetes monitoring, blood virus screening, and quality control products. Third-quarter income from continuing operations was $16.2 million, or $0.62 per share, up 157.9 percent from the same period last year. Third-quarter 2004 earnings were affected, however, by $13.7 million, or $9.5 million net of taxes, of one-time purchased in-process R&D costs. Excluding the one-time charges from the comparison, year-over-year earnings increased about 3 percent.
Year-to-date revenues from continuing operations grew by 11.7 percent to $873.7 million as compared to the same period last year. Normalizing for the impact of currency effects, growth was 9.0 percent. Income from continuing operations increased by 30.4 percent to $64.1 million, or $2.47 per share, compared to $49.2 million, or $1.91 per share, for the first nine months of 2004. Year-to-date gross margin was 55.4 percent compared to 56.5 percent in the same period last year.
Third-Quarter Highlights
-- Overall net sales for the quarter grew by 9.4 percent to $283.2 million compared to $258.8 million reported in the third quarter of 2004. On a currency-neutral basis, revenues were up 8.4 percent versus third-quarter 2004 results.
-- Basic earnings from continuing operations were $0.62 per share, or $0.61 per share on a diluted basis, compared to both basic and diluted earnings per share of $0.24 in the same period of 2004.
-- Life Science segment net sales for the quarter were $132.1 million, up 9.5 percent over the same period last year, which includes a 0.8 percent increase due to currency effects. Sales growth in the third quarter was the result of a combination of factors including increased sales of process chromatography products as well as of products such as the Bio-Plex(R) platform (and associated protein expression analysis reagents) and the Experion(TM) automated electrophoresis system, both of which are gaining market acceptance. The Life Science segment also introduced the BioOdyssey(TM) Calligrapher(TM) miniarrayer, which brings microarray chip writing performance to individual researchers. Segment growth was somewhat tempered, however, by erosion in the average selling price of BSE tests and competition in the real-time PCR instrumentation business.
-- Clinical Diagnostics segment net sales for the quarter were $148.3 million, an increase of 8.7 percent compared to the $136.4 million reported in the third quarter of 2004. Normalizing for the impact of currency effects, sales growth for the segment was 7.5 percent. Strong sales of blood virus screening products in the U.S. transfusion sector, increased blood typing sales in Europe, and expanding worldwide demand for the Company’s quality control products were the primary contributors to increased quarterly net sales. Other gains in the Clinical Diagnostics segment include increased sales of newborn screening products in Northern Europe and strong demand for the Company’s diabetes monitoring, and HIV and Hepatitis testing products in the U.S. and Asia Pacific.
-- On August 30th, the Federal District Court in Connecticut granted a permanent injunction in our ongoing litigation with Applera and Roche. Among other things, the injunction prevents us from selling the MJ Research line of thermal cycling products that we acquired in August 2004 in the United States. However, the Company believes that a settlement agreement with Applera and Roche had been reached and the Company has made motions to the court asking that the settlement agreement be enforced and requesting a stay of the injunction during an appeal. Although the timing and outcome of these motions are uncertain at this time, if the injunction continues in place throughout the fourth quarter, our Life Science business could be negatively impacted with sales being reduced by as much as $10 to 15 million and pre-tax operating profit reduced by $8 to 10 million versus prior expectations.
-- Also during the fourth quarter, we anticipate recording a gain on the sale of our shares in Instrumentation Laboratory S.p.A. and BioSource International of approximately $10 to 11 million.
“Overall, we are pleased with the Company’s performance during the third quarter, in spite of ongoing litigation we acquired as part of our acquisition of MJ Research last fall. We continue to be optimistic about resolving these matters in due course,” said President and Chief Executive Officer Norman Schwartz.
Management will discuss these results in a conference call scheduled for 2:00 p.m. PT (5:00 p.m. ET) today, November 3, 2005. Interested parties can access the call by dialing 800-706-7748 (in the U.S.), or 617-614-3473 (international), access number 85706260. The live web cast can be accessed at http://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 28916822 for seven days following the call and the web cast can be accessed at http://www.bio-rad.com for 30 days.
Bio-Rad Laboratories, Inc. (www.bio-rad.com) is a multinational manufacturer and distributor of life science research products and clinical diagnostics. It is based in Hercules, California, and serves thousands of research and industry customers worldwide through a network of more than 30 wholly owned subsidiary offices.
Various statements made within this press release may constitute “forward-looking statements” for purposes of the Securities and Exchange Commission’s “safe harbor” provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under the Securities Exchange Act of 1934. The forward-looking statements contained herein involve risks and uncertainties that could cause results to differ materially from the Company’s expectations. Bio-Rad Laboratories, Inc. Condensed Consolidated Statements of Income (in thousands, except per share data) (UNAUDITED) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Net sales $283,225 $258,849 $873,698 $782,144 Cost of goods sold 126,413 116,036 389,837 340,406 Gross profit 156,812 142,813 483,861 441,738 Selling, general and administrative expense 102,738 90,183 306,458 267,439 Product research and development expense 28,673 26,581 83,995 76,459 Purchased in-process research and development expense -- 13,720 -- 14,620 Interest expense 8,210 4,995 24,371 14,964 Foreign exchange (gains) losses, net (97) 873 (1,296) 1,620 Other (income) expense, net (3,506) (2,656) (14,033) (3,306) Income from continuing operations before taxes 20,794 9,117 84,366 69,942 Provision for income taxes 4,575 2,827 20,239 20,761 Income from continuing operations 16,219 6,290 64,127 49,181 Discontinued operations Discontinued operations (net of tax) -- -- -- (1,487) Gain on divestiture (net of tax) -- -- 3,974 3,437 Total discontinued operations -- -- 3,974 1,950 Net income $16,219 $6,290 $68,101 $51,131 Basic earnings per share Continuing operations $0.62 $0.24 $2.47 $1.91 Discontinued operations -- -- 0.15 0.08 Net income $0.62 $0.24 $2.62 $1.99 Weighted average common shares 26,115 25,753 26,015 25,692 Diluted earnings per share Continuing operations $0.61 $0.24 $2.41 $1.86 Discontinued operations -- -- 0.15 0.07 Net income $0.61 $0.24 $2.56 $1.93 Weighted average common shares 26,695 26,471 26,620 26,472 Bio-Rad Laboratories, Inc. Condensed Consolidated Balance Sheets (In thousands) (UNAUDITED) September 30, December 31, 2005 2004 Current Assets: Cash and cash equivalents $243,980 $195,734 Restricted cash 35,828 -- Short-term investments 114,522 165,899 Accounts receivable, net 244,466 261,243 Inventories, net 223,146 205,512 Prepaid expenses, taxes and other current assets 90,701 80,072 Total current assets 952,643 908,460 Net property, plant and equipment 182,045 202,324 Goodwill 113,276 113,276 Purchased intangibles, net 50,709 58,638 Other assets 127,318 109,304 Total assets $1,425,991 $1,392,002 Current liabilities: Notes payable and current maturities of long-term debt $8,985 $9,457 Accounts payable 68,076 71,194 Accrued payroll and employee benefits 70,924 79,061 Sales, income and other taxes payable 13,032 15,835 Other current liabilities 138,216 139,828 Total current liabilities 299,233 315,375 Long-term debt, net of current maturities 425,812 425,979 Deferred tax liabilities 31,287 24,772 Other long-term liabilities 20,702 28,988 Stockholders’ equity 648,957 596,888 Total liabilities and stockholders’ equity $1,425,991 $1,392,002 Certain items have been reclassified to conform to the current year presentation. Bio-Rad Laboratories, Inc. Condensed Consolidated Statement of Cash Flows (In thousands) (UNAUDITED) Nine Months Ended September 30, 2005 2004 Cash flows from operating activities: Cash received from customers $865,235 $796,395 Cash paid to suppliers and employees (762,788) (677,032) Interest paid (24,489) (18,922) Income tax payments (30,085) (32,074) Miscellaneous receipts 12,345 5,715 Discontinued operations (1,327) (2,019) Net cash provided by operating activities 58,891 72,063 Cash flows from investing activities: Capital expenditures, net (26,297) (41,627) Other investing activities 12,002 (23,595) Net cash used in investing activities (14,295) (65,222) Cash flows from financing activities: Payments on long-term debt (273) (1,675) Other financing activities 4,776 (4,830) Net cash provided by (used in) financing activities 4,503 (6,505) Effect of exchange rate changes on cash (853) 783 Net increase in cash and cash equivalents 48,246 1,119 Cash and cash equivalents at beginning of period 195,734 65,395 Cash and cash equivalents at end of period $243,980 $66,514 Reconciliation of income from continuing operations to net cash provided by operating activities: Income from continuing operations $64,127 $49,181 Adjustments to reconcile income from continuing operations to net cash
provided by operating
activities (net of effects of acquisitions): Depreciation and amortization 44,581 36,731 Changes in working capital (37,674) (21,142) Other (12,143) 7,293 Net cash provided by operating activities $58,891 $72,063 Certain items have been reclassified to conform to the current year presentation.
Bio-Rad Laboratories, Inc.
CONTACT: Christine Tsingos, Chief Financial Officer, or Ron Hutton,Treasurer, both of Bio-Rad Laboratories, Inc., +1-510-724-7000, orinvestor_relations@bio-rad.com
Web site: http://www.bio-rad.com/
