SOURCE: Bio-Rad Laboratories

February 28, 2008 16:09 ET

Bio-Rad Reports Fourth-Quarter and Full-Year 2007 Financial Results

HERCULES, CA--(Marketwire - February 28, 2008) - Bio-Rad Laboratories, Inc. (AMEX: BIO) and (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, 2007.

Fourth-quarter revenues were $459.7 million, up 34.0% compared to $343.1 million reported for the fourth quarter of 2006. This increase was due to a combination of organic growth across Bio-Rad's two main product areas, the Life Science and Clinical Diagnostics segments, as well as the addition of DiaMed Holding AG products to the Company's portfolio in the fourth quarter, which resulted in additional revenue of $62.0 million and impacted fourth-quarter and full-year results. Excluding the revenue from the DiaMed acquisition, fourth-quarter revenues were up 15.9%, or 9.0% on a currency-neutral basis, compared to the same quarter last year.

Net income for the fourth quarter was $12.4 million compared to $16.6 million during the fourth quarter last year. These results reflect non-cash charges of $12.9 million, which includes a one-time charge of $7.7 million for purchased in-process R&D, and approximately $5.2 million in amortization of intangibles related to DiaMed. Including the DiaMed acquisition, fourth-quarter basic earnings from operations were $0.46 per share, or $0.45 per share on a diluted basis, compared to $0.63 and $0.61, respectively, during the same period last year. Fourth-quarter gross margin was 50.8% compared to 54.1% during the same quarter last year. The lower margin in the most recent quarter reflects the impact of the DiaMed acquisition including foregone profit margin and the amortization of intangibles.

For the full year, sales grew by 14.7% to $1,461.1 million compared to $1,273.9 million in 2006. Excluding revenue from the DiaMed acquisition, Bio-Rad sales grew by 9.8%, or 5.2% after normalizing for the impact of currency effects. Year-over-year net income was $93.0 million, or $3.41 per share on a diluted basis, compared to $103.3 million, or $3.83 per share, respectively, in 2006. Full-year gross margin was 54.2% compared to last year's figure of 55.9%. Revenues, earnings, and gross margin for 2006 were all favorably impacted by one-time additional revenue of $11.7 million which was the result of a licensing settlement agreement reached with bioMérieux SA in 2006.

"Operationally, 2007 was another year of progress for Bio-Rad and one of investment as we welcomed DiaMed Holding AG into our organization," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "As 2008 moves forward, we will continue to explore opportunities to expand our business and improve our operational efficiencies."

Life Science

The Life Science segment net sales for the fourth quarter were $184.5 million, up 16.1% compared to the same period last year. On a currency-neutral basis, Life Science segment sales increased by 9.4%. Full-year reported revenues for the Life Science segment were $615.1 million, up 6.9% over the prior year, or 2.7% on a currency-neutral basis. Performance in this segment was boosted by sales of the ProteOn™ protein interaction array system, the Bio-Plex® suspension array system and reagents, as well as the ProteinChip® SELDI system. Bio-Plex sales continue to be positively impacted by 57 new assays that were introduced in 2006. Sales of process chromatography media and hardware were strong as the products continued to gain broad market acceptance. These materials are used during the purification stages in the manufacture of a variety of pharmaceuticals with a particular applicability to monoclonal antibody-based medicines. Growth in the Life Science segment was negatively impacted by a drop in BSE (bovine spongiform encephalopathy) testing revenues as both the number of animals tested and the average selling price continues to decline. During the fourth quarter, the segment introduced its next generation polymerase chain reaction (PCR) instruments, which are based on the new 1000-series thermal cycling platform, as well as the ProteoMiner™ protein enrichment kits, which provide researchers a way to concentrate and enrich low-and medium-abundance proteins that cannot be detected through traditional methods.

Clinical Diagnostics

The Clinical Diagnostics segment reported net sales of $271.4 million for the fourth quarter, up 50.7% compared to the prior-year quarter. Excluding revenue from the DiaMed acquisition, net sales were up 16.3%, or 9.0% on a currency-neutral basis, from the same period last year. Full-year reported revenues for the Clinical Diagnostics segment were $832.2 million, a 21.5% increase compared to 2006 results. Excluding revenue from the DiaMed acquisition, net sales increased 12.5%, or 7.4% net of currency effects, compared to 2006 results. These results were largely due to continued growth across all product lines, most notably quality controls, autoimmune, diabetes, clinical microbiology, as well as the BioPlex® 2200 system, a revolutionary instrument for the diagnostic laboratory that is continuing to gain market acceptance. In October, the Clinical Diagnostics segment finalized the acquisition of DiaMed Holding AG, a Swiss-based company that develops, manufactures, and markets a complete line of reagents and instruments used in blood typing and screening. Also during the quarter, the segment introduced to the U.S. market, the MRSASelect™ test, a chromogenic medium that detects methicillin-resistant Staphylococcus aureus, as well as its in2it™ analyzer for the "point-of-care" diabetes market. The in2it analyzer measures A1C, combining laboratory-accurate test results with patient convenience.

2007 Full Year Highlights

--  Full-year Company sales grew by 14.7% to $1,461.1 million.
    
--  Year-over-year net income was $93.0 million, compared to $103.3
    million reported in 2006.
    
--  In October, the Company purchased 86% of the outstanding stock of
    DiaMed for approximately 477 million Swiss francs.
    
--  During the first quarter, the Company introduced a number of new
    products including the Mini-PROTEAN® Tetra cell, Bio-Rad's fourth
    generation electrophoresis system, and the Profinia™ protein
    purification system.
    
--  Also during the quarter, the Company introduced new assays for use on
    its BioPlex 2200 system for the detection of the Epstein Barr Virus as well
    as three of the most clinically relevant bacteria that cause syphilis.
    
--  In the second quarter, the Company signed two multi-year agreements
    with Quest Diagnostics to place BioPlex 2200 systems and autoimmune test
    reagents as well as HIV test systems and quality controls in their network
    of reference laboratories nationwide. In addition, Bio-Rad and Beckman
    Coulter announced an agreement regarding the continued development and
    manufacture of immunodiagnostic tests for blood virus and infectious
    disease.
    
--  In September, the Company introduced three new ProteinChip SELDI
    system qualification and calibration kits that help improve reproducibility
    during biomarker discovery.
    
--  In October, Bio-Rad launched the Gene Pulser MXcell™
    electroporation system designed for researchers working with mammalian
    cells.
    
--  In November, the Company introduced to the U.S. market, the MRSASelect
    test, a chromogenic medium used for the rapid screening of MRSA
    (methicillin resistant Staphylococcus aureus).
    
--  Also in November, Bio-Rad launched the in2it analyzer for the "point-
    of-care" diabetes market. The analyzer measures A1C, a well established
    indicator of a diabetic patient's glucose control.
    

Management will discuss these results in a conference call at 2 p.m. Pacific Time (5 p.m. Eastern Time) February 28, 2008. Interested parties can access the call by dialing 800-659-2037 (in the U.S.), or 617-614-2713 (international), access number 75436489. 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 38553576, 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) and (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 diagnostic 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 approximately 6,300 people globally and had revenues approaching $1.5 billion in 2007. For more information, visit 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as updated by subsequent 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 Income

                  (in thousands, except per share data)

                                (UNAUDITED)


                           Three Months Ended        Twelve Months Ended
                              December 31,              December 31,
                        ------------------------  ------------------------
                            2007         2006         2007         2006
                        -----------  -----------  -----------  -----------
Net sales               $   459,688  $   343,081  $ 1,461,052  $ 1,273,930
Cost of goods sold          226,055      157,524      669,690      561,394
                        -----------  -----------  -----------  -----------
Gross profit                233,633      185,557      791,362      712,536

Selling, general and
 administrative expense     162,990      122,463      507,978      438,949
Product research and
 development expense         39,855       33,326      140,535      123,376
Purchased in-process
 research and
 development expense          7,656        4,100        7,656        4,100
Interest expense              8,023        7,911       31,606       32,022
Foreign exchange
 losses, net                  2,989           94        2,576        1,053
Other income                   (464)      (6,182)     (19,832)     (28,991)
                        -----------  -----------  -----------  -----------
Income before tax and
 minority interests          12,584       23,845      120,843      142,027

Minority interests in
 earnings of
 consolidated
 subsidiaries                (1,301)           -       (1,301)           -
                        -----------  -----------  -----------  -----------
Income before tax            11,283       23,845      119,542      142,027

Provision (benefit) for
 taxes                       (1,072)       7,196       26,548       38,764
                        -----------  -----------  -----------  -----------
Net income              $    12,355  $    16,649  $    92,994  $   103,263
                        ===========  ===========  ===========  ===========

Basic earnings per
 share
     Net income         $      0.46  $      0.63  $      3.49  $      3.92
                        ===========  ===========  ===========  ===========

     Weighted average
      common shares          26,780       26,478       26,684       26,376
                        ===========  ===========  ===========  ===========

Diluted earnings per
 share
     Net income         $      0.45  $      0.61  $      3.41  $      3.83
                        ===========  ===========  ===========  ===========

     Weighted average
      common shares          27,456       27,086       27,260       26,949
                        ===========  ===========  ===========  ===========





                        Bio-Rad Laboratories, Inc.

                  Condensed Consolidated Balance Sheets

                              (In thousands)
                                (UNAUDITED)

                                              December 31,   December 31,
                                                  2007           2006
                                              -------------- --------------
Current Assets:
   Cash and cash equivalents                  $      161,764 $      223,607
   Short-term investments                             61,977        264,473
   Accounts receivable, net                          358,076        292,970
   Inventories, net                                  321,015        253,045
   Other current assets                              126,142         95,682
                                              -------------- --------------
          Total current assets                     1,028,974      1,129,777

Net property, plant and equipment                    271,561        189,627
Goodwill                                             328,439        119,492
Purchased intangibles, net                           210,304         44,605
Other assets                                         132,316        112,667
                                              -------------- --------------
     Total assets                             $    1,971,594 $    1,596,168
                                              ============== ==============


Current liabilities:
   Notes payable and current maturities of
    long-term debt                            $       15,627 $        3,042
   Accounts payable                                   96,470         83,411
   Accrued payroll and employee benefits             121,255         92,101
   Sales, income and other taxes payable              27,905         19,949
   Other current liabilities                         152,911        121,030
                                              -------------- --------------
     Total current liabilities                       414,168        319,533

Long-term debt, net of current maturities            441,805        425,625
Other long-term liabilities                          109,497         31,472
Minority interests                                    34,434              -
Stockholders' equity                                 971,690        819,538
                                              -------------- --------------
     Total liabilities, minority interests &
      stockholders' equity                    $    1,971,594 $    1,596,168
                                              ============== ==============





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

                              (In thousands)
                                (UNAUDITED)

                                                  Twelve Months Ended
                                                      December 31,
                                                  2007           2006
                                              -------------  -------------
Cash flows from operating activities:
   Cash received from customers               $   1,467,626  $   1,247,779
   Cash paid to suppliers and employees          (1,225,968)    (1,058,977)
   Interest paid                                    (30,588)       (31,049)
   Income tax payments                              (38,253)       (16,072)
   Litigation settlement                             (4,228)       (46,981)
   Other operating activities                        22,991         23,529
                                              -------------  -------------
   Net cash provided by operating activities        191,580        118,229

Cash flows from investing activities:
   Payment for acquisitions, net of cash
    received, and long-term investments            (387,673)       (46,071)
   Receipt (payment) of restricted cash                   -         36,138
   Other investing activities                       133,244       (197,815)
                                              -------------  -------------
   Net cash used in investing activities           (254,429)      (207,748)

Cash flows from financing activities:
   Payments on long-term debt                       (17,720)          (487)
   Other financing activities                        10,270         10,649
                                              -------------  -------------
   Net cash provided by (used in) financing
    activities                                       (7,450)        10,162

Effect of exchange rate changes on cash               8,456          6,248
                                              -------------  -------------

Net decrease in cash and cash equivalents           (61,843)       (73,109)
Cash and cash equivalents at beginning of
 period                                             223,607        296,716
                                              -------------  -------------
Cash and cash equivalents at end of period    $     161,764  $     223,607
                                              =============  =============


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

Net income                                    $      92,994  $     103,263
Adjustments to reconcile net income to net
 cash provided by operating activities (net
 of effects of acquisitions):
   Depreciation and amortization                     67,258         55,414
   Changes in working capital                        11,038        (10,270)
   Litigation settlement                             (4,228)       (46,981)
   Other                                             24,518         16,803
                                              -------------  -------------
Net cash provided by operating activities     $     191,580  $     118,229
                                              =============  =============

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