SOURCE: Bio-Rad Laboratories

August 03, 2006 16:00 ET

Bio-Rad Laboratories Reports Second-Quarter Results

HERCULES, CA -- (MARKET WIRE) -- August 3, 2006 -- Bio-Rad Laboratories, Inc. (AMEX: BIO) (AMEX: BIOb), a multinational manufacturer and distributor of life science research products and clinical diagnostics, announced financial results today for the second quarter ended June 30, 2006. Second-quarter revenues from continuing operations were $317.7 million, up 9.1% compared to the $291.3 million reported for the second quarter of 2005. Included in this figure is one-time additional revenue of $11.7 million resulting from a licensing settlement agreement reached with bioMérieux, which had a favorable impact on both the second quarter and year-to-date figures for 2006. On a currency-neutral basis, revenues increased 9.7% compared to the same period last year or 5.6% excluding the settlement. This sales increase was the result of growth across product areas in both the Life Science and Clinical Diagnostics segments. Income from continuing operations for the quarter was $32.3 million compared to $18.4 million during the second quarter last year. At 58.1%, second-quarter gross margin from continuing operations was markedly higher than the 55.1% reported for the second quarter of 2005. Excluding the impact of the bioMérieux settlement, gross margin was 56.5%.

Year-to-date revenues from continuing operations grew by 6.0% to $626.1 million compared to the same period last year. Normalizing for the impact of currency effects, growth was 9.0%. Income from continuing operations increased by 32.5% to $63.5 million, or $2.41 per share compared to $47.9 million, or $1.85 per share, for the first six months of 2005. Year-to-date gross margin was 57.5% compared to 55.4% in the same period last year.

Second-Quarter Highlights

--  Second-quarter basic earnings from continuing operations were $1.22
    per share, or $1.20 per share on a diluted basis, compared to $0.71 and
    $0.69, respectively, during the same period of last year.
--  As a result of a settlement reached with bioMérieux, Bio-Rad reported
    additional revenue in the second quarter of $11.7 million in royalties and
    licensing fees.
--  Life Science segment net sales for the quarter were $134.4 million, up
    somewhat from $133.1 million reported in the second quarter of last year.
    Sales in this area increased by 1.0% or 1.8% excluding currency effects
    over the same period last year.
--  The Clinical Diagnostics segment reported sales of $180.2 million, a
    16.1% increase over the same period last year of $155.2 million. On a
    currency-neutral basis, segment sales increased 16.6%. Excluding the
    bioMérieux settlement, currency-neutral sales increased by 8.9%.
--  In April, the Company announced that it had signed a multi-year
    agreement in which Premier, one of the largest group purchasing
    organizations in the United States, had agreed to a three-year sole-source
    contract with Bio-Rad covering diabetes monitoring instrumentation and
    products.
--  During the quarter, Cell Signaling Technology (CST) and Bio-Rad
    entered into a partnership agreement in which CST will develop a broad
    array of antibody assays that will run on the Bio-Plex® suspension array
    system.
    
Life Science segment net sales for the quarter were $134.4 million, up 1.0% compared to $133.1 million in the second quarter last year. On a currency-neutral basis, sales increased by 1.8%. Performance in this segment was the result of a number of factors including sales of amplification reagents, process chromatography media and the Bio-Plex® suspension array system, which continue to show impressive growth worldwide. These results were somewhat tempered, however, by the continued erosion of BSE testing revenue as well as increased competition in real-time instrument sales worldwide. During the second quarter, the Company launched iQ-Check® tests, a series of rapid food diagnostic tests based on a quantitative PCR (polymerase chain reaction) platform. The new tests are both sensitive and specific allowing for the detection of common food pathogens in less than 24 hours.

The Clinical Diagnostics segment reported sales of $180.2 million, a 16.1% increase over the second quarter last year of $155.2 million. On a currency-neutral basis, segment sales increased 16.6%. These results are due in part to growth across the product line in addition to the bioMérieux settlement. In April, the Company introduced the Platelia™ Dengue NS1 Ag Assay for dengue screening. The test provides early diagnosis of dengue acute infections, a tropical disease transmitted to humans from mosquitoes. Also during April, the Company launched a diagnostic test for celiac disease, an autoimmune disorder characterized by individuals having abnormal reactions to gluten, a protein found in wheat, barley, and rye.

"We are pleased to report overall solid financial performance during the first half of the year," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "As the year progresses, we will continue to pursue targeted opportunities to expand the business and improve operational efficiencies."

Management will discuss these results in a conference call at 2 p.m. Pacific Daylight Time (5 p.m. Eastern Daylight Time) August 3, 2006. Interested parties can access the call by dialing 866-356-4123 (in the U.S.), or 617-597-5393 (international), access number 58346209. The live webcast 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 74549276, for seven days following the call and the webcast can be accessed at http://www.bio-rad.com for 30 days.

About Bio-Rad

Bio-Rad Laboratories, Inc., is a multinational manufacturer and distributor of life science research and clinical diagnostics products. Based in Hercules, California, Bio-Rad serves more than 70,000 research and industry customers worldwide through a network of more than 30 wholly owned subsidiary offices. For more information, please visit www.bio-rad.com.

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          Six Months
                                        Ended                 Ended
                                       June 30,              June 30,
                                --------------------  --------------------
                                  2006       2005       2006       2005
                                ---------  ---------  ---------  ---------
Net sales                       $ 317,747  $ 291,302  $ 626,085  $ 590,473
Cost of goods sold                133,085    130,659    265,895    263,424
                                ---------  ---------  ---------  ---------
Gross profit                      184,662    160,643    360,190    327,049

Selling, general and
 administrative expense           110,466    104,222    210,536    203,720
Product research and
 development expense               30,971     28,499     59,062     55,322
Interest expense                    7,880      8,044     15,899     16,161
Foreign exchange (gains)
 losses, net                        1,241       (922)     1,252     (1,199)
Other (income) expense, net        (7,753)    (4,689)   (12,295)   (10,527)
                                ---------  ---------  ---------  ---------
Income from continuing
 operations before taxes           41,857     25,489     85,736     63,572
Provision for income taxes          9,591      7,101     22,272     15,664
                                ---------  ---------  ---------  ---------
Income from continuing
 operations                        32,266     18,388     63,464     47,908
                                ---------  ---------  ---------  ---------
Discontinued operations
  Discontinued operations
   (net of tax)                         -          -          -      3,974
                                ---------  ---------  ---------  ---------
Net income                      $  32,266  $  18,388  $  63,464  $  51,882
                                =========  =========  =========  =========

Basic earnings per share
  Continuing operations         $    1.22  $    0.71  $    2.41  $    1.85
  Discontinued operations               -          -          -       0.15
                                ---------  ---------  ---------  ---------
  Net income                    $    1.22  $    0.71  $    2.41  $    2.00
                                =========  =========  =========  =========

  Weighted average common
   shares                          26,341     26,020     26,309     25,965
                                =========  =========  =========  =========

Diluted earnings per share
  Continuing operations         $    1.20  $    0.69  $    2.36  $    1.80
  Discontinued operations               -          -          -       0.15
                                ---------  ---------  ---------  ---------
  Net income                    $    1.20  $    0.69  $    2.36  $    1.95
                                =========  =========  =========  =========

  Weighted average common
   shares                          26,900     26,610     26,865     26,583
                                =========  =========  =========  =========
The accompanying notes are an integral part of these consolidated
 financial statements.



                        Bio-Rad Laboratories, Inc.
                  Condensed Consolidated Balance Sheets

                              (In thousands)
                                (UNAUDITED)



                                                      June 30,    December
                                                                    31,
                                                       2006        2005
                                                    ----------- -----------
Current assets:
  Cash and cash equivalents                         $   245,646 $   296,716
  Restricted cash                                             -      36,138
  Short-term investments                                188,319     116,343
  Accounts receivable, net                              273,014     247,192
  Inventories, net                                      244,339     212,342
  Other current assets                                  106,855      99,480
                                                    ----------- -----------
   Total current assets                               1,058,173   1,008,211

Net property, plant and equipment                       183,783     180,258
Goodwill                                                113,276     113,276
Purchased intangibles, net                               26,238      28,449
Other assets                                            112,566      96,388
                                                    ----------- -----------
     Total assets                                   $ 1,494,036 $ 1,426,582
                                                    =========== ===========



Current liabilities:
  Notes payable and current maturities
   of long-term debt                                $     4,478 $     3,341
  Accounts payable                                       69,302      72,950
  Accrued payroll and employee benefits                  76,980      81,076
  Sales, income and other taxes payable                  19,396      15,841
  Other current liabilities                             110,865     146,035
                                                    ----------- -----------
   Total current liabilities                            281,021     319,243

Long-term debt, net of current maturities               425,873     425,687
Other long-term liabilities                              31,028      23,678
Stockholders' equity                                    756,114     657,974
                                                    ----------- -----------
   Total liabilities and
    stockholders' equity                            $ 1,494,036 $ 1,426,582
                                                    =========== ===========

The accompanying notes are an integral part of these consolidated
 financial statements.



                        Bio-Rad Laboratories, Inc.
              Condensed Consolidated Statement of Cash Flows

                              (In thousands)
                                (UNAUDITED)



                                                           Six Months
                                                         Ended June 30,
                                                        2006       2005
                                                      ---------  ---------

Cash flows from operating activities:
  Cash received from customers                        $ 612,996  $ 583,459
  Cash paid to suppliers and employees                 (549,519)  (527,665)
  Interest paid                                         (15,403)   (15,459)
  Income tax payments                                    (2,620)   (20,161)
  Litigation settlement related to MJ acquisition       (44,960)         -
  Other operating activities                             10,998      7,644
                                                      ---------  ---------
  Net cash provided by operating activities              11,492     27,818

Cash flows from investing activities:
  Capital expenditures, net                             (24,851)   (17,591)
  Receipt (payment) of restricted cash                   36,138    (35,565)
  Other investing activities                            (83,043)    76,150
                                                      ---------  ---------
  Net cash provided by (used in) investing
   activities                                           (71,756)    22,994

Cash flows from financing activities:
  Proceeds from issuance of common stock                  5,467      4,516
  Other financing activities                              1,068        576
                                                      ---------  ---------
  Net cash provided by financing activities               6,535      5,092

Effect of exchange rate changes on cash                   2,659        494
                                                      ---------  ---------

Net increase (decrease) in cash and cash equivalents    (51,070)    56,398
Cash and cash equivalents at beginning of period        296,716    195,734
                                                      ---------  ---------
Cash and cash equivalents at end of period            $ 245,646  $ 252,132
                                                      =========  =========


Reconciliation of net income to net cash provided by
 operating activities:

Net income                                            $  63,464  $  51,882
Adjustments to reconcile net income to net cash
 provided by
 operating activities:
  Depreciation and amortization                          26,436     30,091
  Changes in working capital                            (46,749)   (45,925)
  Litigation settlement related to MJ acquisition       (44,960)         -
  Other                                                  13,301     (8,230)
                                                      ---------  ---------
Net cash provided by operating activities             $  11,492  $  27,818
                                                      =========  =========

The accompanying notes are an integral part of these consolidated
 financial statements.


Contact Information

  • For more information contact:
    Christine Tsingos
    Vice President and Chief Financial Officer

    Ron Hutton
    Treasurer

    Bio-Rad Laboratories, Inc.
    510-724-7000
    Email Contact