SOURCE: Bio-Rad Laboratories

February 22, 2007 16:03 ET

Bio-Rad Reports Fourth Quarter and Full Year 2006 Financial Results

HERCULES, CA -- (MARKET WIRE) -- February 22, 2007 -- Bio-Rad Laboratories, Inc. (AMEX: BIO) (AMEX: BIOb), a multinational manufacturer and distributor of life science research and clinical diagnostics products, announced financial results today for the fourth quarter and fiscal year ended December 31, 2006.

Fourth-quarter revenues were $343.1 million, up 11.6% compared to $307.3 million reported for the fourth quarter of 2005. On a currency-neutral basis, revenues increased 7.6% compared to the same period last year. This growth was primarily organic across product areas in both the Life Science and Clinical Diagnostics segments complemented by two acquisitions completed during the fourth quarter.

Income from continuing operations for the fourth quarter was $16.6 million compared to $13.5 million during the fourth quarter last year. Fourth-quarter basic earnings from continuing operations were $0.63 per share, or $0.61 per share on a diluted basis, compared to $0.51 and $0.50, respectively, during the same period last year. Fourth-quarter gross margin from continuing operations was 54.1% compared to 52.9% in the same period last year.

For the full year, Company sales grew by 7.9% to $1,273.9 million compared to $1,181.0 in 2005. Normalizing for the impact of currency effects, growth was 7.7%. Favorable impacts on year-to-date figures for 2006 include a Russian tender won in the first quarter for laboratory equipment as well as one-time additional revenue of $11.7 million resulting from a licensing settlement agreement reached with bioMérieux SA.

Full-year gross margin from continuing operations was 55.9%, up from last year's figure of 54.7%.

Year-over-year income from continuing operations grew 33.1% to $103.3 million, or $3.92 per share, from $77.6 million, or $2.98 per share, in 2005.

"2006 was a year of continued progress on many fronts," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "The year brought increased organic growth within our core businesses, expansion of our product lines through new product introductions and strategic acquisitions, and infrastructure improvements. As a result, Bio-Rad is well-positioned in key market areas and has a strengthened foundation for the long term."

Life Science

The Life Science segment net sales for the quarter were $159.0 million, up 13.0% compared to the fourth quarter of last year. On a currency-neutral basis, segment sales increased by 8.8%. Full-year reported revenues were $575.6 million for the segment, up 4.7% over the prior year, or 4.6% on a currency-neutral basis. Performance in the Life Science segment was boosted by a number of factors including significant growth in protein expression analysis, process chromatography, and amplification reagents. In addition, the segment benefited from the purchase of Ciphergen Biosystems, Inc.'s life science business including worldwide technology rights to Ciphergen's Surface Enhanced Laser Desorption/Ionization (SELDI) technology and ProteinChip® System. These results were somewhat tempered by reduced BSE (bovine spongiform encephalopathy) revenue and slowed life science markets in the U.S. and Japan.

Clinical Diagnostics

The Clinical Diagnostics segment reported net sales of $180.1 million for the quarter, up 10.6% compared to the prior-year quarter, or 6.5% excluding currency effects. Full-year segment sales were $684.9 million, a 10.8% increase compared to 2005 results, or 10.4% excluding currency effects. These results were largely due to continued growth across all product lines, most notably blood virus products as well as MRSASelect™ chromogenic media, which detects Methicillin-resistant Staphylococcus aureus. Sales of quality controls product lines were also up significantly during the quarter. During the quarter, the segment completed the purchase of Blackhawk BioSystems, Inc., a manufacturer of infectious disease quality control products.

2006 Full Year Review

--  Full-year Company sales grew by 7.9% to $1,273.9 million.
--  Year-over-year income from continuing operations grew by 33.1% to
    $103.3 million from $77.6 million in 2005.
--  In February of 2006, the Company settled litigation and resumed U.S.
    sales of certain thermal cycling products.
--  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 U.S., had agreed to a 3-year sole-source contract with
    Bio-Rad covering diabetes monitoring instrumentation and products.
--  As a result of a settlement reached with bioMérieux SA, in the second
    quarter Bio-Rad reported additional revenue of $11.7 million in royalties
    and licensing fees.
--  Also during the second quarter, the segment launched a number of
    products including Platelia® Dengue NS1 Ag Assay for dengue screening; a
    diagnostic test for celiac disease, an autoimmune disorder; and a new Rack
    Loader for use in conjunction with the D-10™  Hemoglobin Testing System,
    which expanded the sample handling capacity of the system to 50 samples per
    run.
--  In September, Bio-Rad announced the availability of the ProteOn™
    XPR36 Protein Interaction Array System. In addition, the Company announced
    that it had completed the purchase of the diagnostics business of Provalis
    plc, a provider of point of care diagnostic products for chronic disease
    management of diabetes and osteoporosis.
--  In October, Bio-Rad announced that it had acquired Blackhawk
    BioSystems, Inc., a manufacturer of quality control products used in
    laboratories that perform infectious disease testing procedures.
--  In November, Bio-Rad completed the purchase of Ciphergen Biosystems,
    Inc.'s life science business including worldwide technology rights to
    Ciphergen's Surface Enhanced Laser Desorption/Ionization (SELDI) technology
    and ProteinChip® System.
    

Management will discuss these results in a conference call at 2 p.m. Pacific Standard Time (5 p.m. Eastern Standard Time) February 22, 2007. Interested parties can access the call by dialing 800-265-0241 (in the U.S.), or 617-847-8704 (international), access number 86039052. 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 21671774, 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. (AMEX: BIO) (AMEX: BIOb) has remained at the center of scientific discovery for more than 50 years manufacturing and distributing a broad range of products for the life science research and clinical diagnostics markets. The company is renowned worldwide among hospitals, universities, major research institutions as well as biotechnology and pharmaceutical companies for its commitment to quality and customer service. Founded in 1952, Bio-Rad is headquartered in Hercules, California, and serves more than 85,000 research and industry customers worldwide through its global network of operations. The company employs over 5,000 people globally and had revenues of nearly $1.3 billion in 2006. For more information, visit www.bio-rad.com.

Various statements made within this press release may constitute "forward-looking statements" for the 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 expectation.


                   Bio-Rad Laboratories, Inc.

         Condensed Consolidated Statements of Income

              (in thousands, except per share data)

                          (UNAUDITED)



                          Three Months Ended         Twelve Months Ended
                             December 31,               December 31,

                        ------------------------  ------------------------
                            2006         2005         2006         2005
                        -----------  -----------  -----------  -----------
Net sales               $   343,081  $   307,287  $ 1,273,930  $ 1,180,985
Cost of goods sold          157,524      144,662      561,394      534,499
                        -----------  -----------  -----------  -----------
Gross profit                185,557      162,625      712,536      646,486

Selling, general and
 administrative expense     122,463      109,626      438,949      416,084
Product research and
 development expense         33,326       31,109      123,376      115,104
Purchased in-process
 research and
 development expense          4,100            -        4,100            -
Impairment expenses               -       19,770            -       19,770
Interest expense              7,911        8,272       32,022       32,643
Foreign exchange
 (gains) losses, net             94         (232)       1,053       (1,528)
Other (income) expense,
 net                         (6,182)     (14,925)     (28,991)     (28,958)
                        -----------  -----------  -----------  -----------
Income from continuing
 operations before
 taxes                       23,845        9,005      142,027       93,371
Provision for income
 taxes                        7,196       (4,447)      38,764       15,792
                        -----------  -----------  -----------  -----------
Income from continuing
 operations                  16,649       13,452      103,263       77,579
Discontinued operations           -            -            -        3,974
                        -----------  -----------  -----------  -----------
Net income              $    16,649  $    13,452  $   103,263  $    81,553
                        ===========  ===========  ===========  ===========

Basic earnings per
 share
     Continuing
      operations        $      0.63  $      0.51  $      3.92  $      2.98
     Discontinued
      operations                  -            -            -         0.15
                        -----------  -----------  -----------  -----------
     Net income         $      0.63  $      0.51  $      3.92  $      3.13
                        ===========  ===========  ===========  ===========

     Weighted average
      common shares          26,478       26,203       26,376       26,063
                        ===========  ===========  ===========  ===========

Diluted earnings per
 share
     Continuing
      operations        $      0.61  $      0.50  $      3.83  $      2.91
     Discontinued
      operations                  -            -            -         0.15
                        -----------  -----------  -----------  -----------
     Net income         $      0.61  $      0.50  $      3.83  $      3.06
                        ===========  ===========  ===========  ===========

     Weighted average
      common shares          27,086       26,770       26,949       26,662
                        ===========  ===========  ===========  ===========





                 Bio-Rad Laboratories, Inc.

           Condensed Consolidated Balance Sheets

                         (In thousands)
                          (UNAUDITED)



                                            December 31,      December 31,
                                               2006              2005
                                           ------------      ------------
Current Assets:
   Cash and cash equivalents               $    223,607      $    296,716
   Restricted cash                                   --            36,138
   Short-term investments                       264,473           116,343
   Accounts receivable, net                     292,970           247,192
   Inventories, net                             253,045           212,342
   Other current assets                          95,682            99,480
                                           ------------      ------------
     Total current assets                     1,129,777         1,008,211

Net property, plant and equipment               189,627           180,258
Goodwill                                        119,492           113,276
Purchased intangibles, net                       44,605            28,449
Other assets                                    112,667            96,388
                                           ------------      ------------
     Total assets                          $  1,596,168      $  1,426,582
                                           ============      ============



Current liabilities:
   Notes payable and current maturities
    of long-term debt                      $      3,042       $     3,341
   Accounts payable                              83,411            72,950
   Accrued payroll and employee benefits         92,101            81,076
   Sales, income and other taxes payable         19,949            15,841
   Other current liabilities                    121,030           146,035
                                           ------------      ------------
     Total current liabilities                  319,533           319,243

Long-term debt, net of current maturities       425,625           425,687
Other long-term liabilities                      31,472            23,678
Stockholders' equity                            819,538           657,974
                                           ------------      ------------
     Total liabilities and stockholders'
      equity                               $  1,596,168      $  1,426,582
                                           ============      ============





                      Bio-Rad Laboratories, Inc.

            Condensed Consolidated Statements of Cash Flows

                           (In thousands)
                             (UNAUDITED)


                                                       Twelve Months
                                                     Ended December 31,

                                                     2006          2005
                                                -----------    -----------
Cash flows from operating activities:
    Cash received from customers                $ 1,247,779    $ 1,166,711
    Cash paid to suppliers and employees         (1,058,977)    (1,003,264)
    Interest paid                                   (31,049)       (31,334)
    Income tax payments                             (16,072)       (39,597)
    Litigation settlement related to MJ
     acquisition                                    (46,981)             -
    Other operating activities                       23,529         15,768
                                                -----------    -----------
    Net cash provided by operating activities       118,229        108,284

Cash flows from investing activities:
    Capital expenditures, net                       (52,987)       (36,055)
    Receipt (payment) of restricted cash             36,138        (36,138)
    Other investing activities                     (190,899)        66,021
                                                -----------    -----------
    Net cash used in investing activities          (207,748)        (6,172)

Cash flows from financing activities:
    Payments on long-term debt                         (487)          (447)
    Other financing activities                       10,649          1,737
                                                -----------    -----------
    Net cash provided by financing activities        10,162          1,290

Effect of exchange rate changes on cash               6,248         (2,420)
                                                -----------    -----------

Net (decrease) increase in cash and cash
 equivalents                                        (73,109)       100,982
Cash and cash equivalents at beginning of
 period                                             296,716        195,734
                                                -----------    -----------
Cash and cash equivalents at end of period      $   223,607    $   296,716
                                                ===========    ===========


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

Net income                                      $   103,263    $    81,553
Adjustments to reconcile net income to net
 cash provided by operating activities
 (net of effects of acquisitions):
    Depreciation and amortization                    55,414         60,974
    Impairment expense                                    -         19,770
    Changes in working capital                       (9,026)       (31,599)
    Litigation settlement related to MJ
     acquisition                                    (46,981)             -
    Other                                            15,559        (22,414)

                                                -----------    -----------
Net cash provided by operating activities       $   118,229    $   108,284
                                                ===========    ===========


Contact Information

  • For more information contact:
    Christine Tsingos
    Vice President and Chief Financial Officer
    or
    Ron Hutton
    Treasurer
    Bio-Rad Laboratories, Inc.
    510-724-7000
    Email Contact