SOURCE: Bio-Rad Laboratories

February 26, 2009 16:20 ET

Bio-Rad Reports Fourth-Quarter and Full-Year 2008 Financial Results

HERCULES, CA--(Marketwire - February 26, 2009) - Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIOb), a multinational 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, 2008.

Fourth-quarter reported revenues were $448.0 million, down 2.6% compared to $459.7 million reported for the fourth quarter of 2007. On a currency-neutral basis, quarterly revenues increased 3.0% compared to the same period last year. This increase was due primarily to organic growth across a wide range of products in Bio-Rad's two main areas, Life Science and Clinical Diagnostics. Fourth-quarter gross margin was 55.1% compared to 50.8% during the same quarter last year. This improvement was a result of product mix with a heavier emphasis on consumables as well as the elimination of some low margin products. The lower margin in the prior-year quarter reflected the impact of the DiaMed acquisition.

The Company reported a net loss for the fourth quarter of $8.2 million compared to net income of $12.4 million during the fourth quarter last year. These results reflect non-cash impairment charges of $35.0 million, which include charges of $28.8 million for the impairment of goodwill and purchased intangibles and $6.2 million for impairment of investments. Additionally, income for the quarter was impacted by $5.2 million in foreign exchange loss due to significant currency fluctuations during the quarter. The extraordinarily high tax rate for the fourth quarter was due primarily to the nondeductible write-off of goodwill and the impairment of investments which did not result in a benefit for tax purposes. Fourth-quarter diluted loss per share from operations was $0.30 compared to diluted earnings of $0.45 per share during the same period last year.

For the full year, sales grew by 20.8% to $1,764.4 million compared to $1,461.1 million in 2007. After normalizing for the impact of currency effects, Bio-Rad sales grew by 17.8%. Year-over-year net income was $89.5 million, or $3.25 per share on a diluted basis, compared to $93.0 million, or $3.41 per share, respectively, in 2007. Full-year gross margin was 54.6% compared to last year's figure of 54.2%. Margins were bolstered by better manufacturing efficiency coupled with a favorable product mix.

"We are pleased with the results of 2008. It was another successful year for Bio-Rad despite weakening of the capital equipment market. During the year we made progress on expanding our core business as well as integrating DiaMed into our organization," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "We, like others, are approaching 2009 with caution. The economic environment could make growth for this year challenging; nevertheless, we expect it to be another year of laying the groundwork for long-term success."

Life Science

The Life Science segment net sales for the fourth quarter were $170.3 million, down 7.7% compared to the same period last year. On a currency-neutral basis, Life Science segment sales decreased by 3.0%. Full-year reported revenues for the Life Science segment were $643.5 million, up 4.6% over the prior year, or 1.4% on a currency-neutral basis. Growth in the Life Science segment was negatively impacted during the quarter by a drop in capital instrument sales, reflecting cutbacks by both academic and bio-pharmaceutical customers. Performance in the Life Science segment benefited from sales of the Company's protein separation and analysis tools including electrophoresis, chromatography, and imaging products. Segment performance was also boosted by sales of its Bio-Plex® suspension array system reagents, as several new assay panels for the Bio-Plex system were introduced during the year. Demand for the Company's next generation polymerase chain reaction (PCR) instruments continued to grow through the fourth quarter. During the fourth quarter, the segment introduced the CFX384 Real-Time PCR Detection System. This is a high-throughput version of the CFX product line introduced earlier in the year.

Clinical Diagnostics

The Clinical Diagnostics segment reported net sales of $274.0 million for the fourth quarter, up 0.9% compared to the prior-year quarter. Net sales were up 7.2% for the quarter on a currency-neutral basis. These results were due in good measure to continued growth across all product lines, most notably quality control, autoimmune, diabetes and blood virus testing. Placements of the Company's BioPlex® 2200 system as well as sales of its rapid MRSASelect™ test also continued at a good pace. Full-year reported revenues for the Clinical Diagnostics segment were $1,106.4 million, a 33.0% increase compared to 2007 results principally due to the acquisition of DiaMed in the fourth quarter of 2007. Net of currency effects, revenues increased 30.1% compared to 2007 results.

2008 Full-Year Highlights

--  Full-year Company sales grew by 20.8% to $1,764.4 million.
--  Year-over-year net income was $89.5 million, down 3.7% compared to
    $93.0 million reported in 2007.  This reduction was primarily due to non-
    cash impairments taken in the fourth quarter of 2008.
--  During the first quarter, the Life Science group began shipping its
    next generation polymerase chain reaction (PCR) instruments, the new 1000-
    series thermal cycling and CFX Real Time platforms.
--  In January, the Clinical Diagnostics group announced the introduction
    to the U.S. market of CandiSelect™ 4, a chromogenic medium used for the
    selective isolation of several forms of Candida, a genus of yeasts that can
    cause numerous infections in humans and animals.
--  In February, the Company announced the launch of the first and only
    fully-automated, random access multiplex test system for autoimmune
    systemic vasculitis testing. The BioPlex® 2200 Vasculitis kit is for use
    on the BioPlex 2200 system, a platform that employs multiplexing technology
    to analyze multiple disease markers from a single patient sample.
--  In July, Bio-Rad announced FDA clearance for faster interpretation
    time of its existing MRSASelect™ test, a chromogenic medium that is used
    for the rapid screening of MRSA (methicillin-resistant Staphylococcus
    aureus). With high sensitivity and specificity as well as rapid and direct
    identification, the MRSASelect test can now identify MRSA carriers in as
    little as 18 hours.
--  In September, the Clinical Diagnostics division launched the
    BioPlex® 2200 Syphilis IgM kit in Europe. The new test detects IgM class
    antibodies to a bacterium that causes syphilis.
--  In December, the Company purchased DiaMed GB Ltd, the exclusive
    distributor of DiaMed products in the United Kingdom (excluding Northern
    Ireland), and DiaMed Fennica Oy, the exclusive distributor of DiaMed
    products in Finland, Estonia, Latvia, and Lithuania. The total cash
    purchase price of these acquisitions was approximately $17 million.
--  Also in December, Bio-Rad purchased certain assets of SafePath
    Laboratories, LLC's food diagnostics business. The terms of the purchase
    were not disclosed. With the purchase of SafePath's high performance
    serological immunoassay test kits for Trichinella, Toxoplasma and
    Salmonella pathogens, Bio-Rad expands its food diagnostics product line.
    

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) February 26, 2009. Interested parties may access the call by dialing 866-700-5192 (in the U.S.) or 617-213-8833 (international), access number 30538296. 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 82618947 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. (NYSE: BIO) and (NYSE: 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 over 6,500 people globally and had revenues exceeding $1.7 billion in 2008. 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 most recent Annual Report on Form 10-K, 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,
                        ------------------------  -------------------------
                            2008         2007         2008         2007
                        -----------  -----------  ------------ -----------
Net sales               $   447,965  $   459,688  $  1,764,365 $ 1,461,052
Cost of goods sold          201,289      226,055       801,843     669,690
                        -----------  -----------  ------------ -----------
Gross profit                246,676      233,633       962,522     791,362
Selling, general and
 administrative expense     154,497      162,990       591,304     507,978
Product research and
 development expense         41,120       39,855       159,518     140,535
Purchased in-process
 research and
 development expense              -        7,656             -       7,656
Impairment expenses          28,757            -        28,757           -
                        -----------  -----------  ------------ -----------
Income from operations       22,302       23,132       182,943     135,193
Interest expense              7,985        8,023        32,113      31,606
Foreign exchange
 losses, net                  5,238        2,989         7,634       2,576
Other (income) expense,
 net                          5,020         (464)          353     (19,832)
                        -----------  -----------  ------------ -----------
Income before taxes and
 minority interests           4,059       12,584       142,843     120,843
Provision (benefit) for
 income taxes                10,567       (1,072)       44,579      26,548
Minority interests in
 earnings of
 consolidated
 subsidiaries                 1,708        1,301         8,754       1,301
                        -----------  -----------  ------------ -----------
Net income (loss)       $    (8,216) $    12,355  $     89,510 $    92,994
                        ===========  ===========  ============ ===========

Basic earnings (loss)
 per share
     Net income (loss)  $     (0.30) $      0.46  $       3.32 $      3.49
                        ===========  ===========  ============ ===========

     Weighted average
      common shares          27,142       26,780        27,001      26,684
                        ===========  ===========  ============ ===========

Diluted earnings (loss)
 per share
     Net income (loss)  $     (0.30) $      0.45  $       3.25 $      3.41
                        ===========  ===========  ============ ===========

     Weighted average
      common shares          27,142       27,456        27,527      27,260
                        ===========  ===========  ============ ===========






                        Bio-Rad Laboratories, Inc.
                  Condensed Consolidated Balance Sheets

                              (In thousands)
                                (UNAUDITED)


                                              December 31,    December 31,
                                                 2008            2007
                                             --------------  --------------
Current Assets:
     Cash and cash equivalents               $      204,524  $      161,764
     Short-term investments                          38,950          61,977
     Accounts receivable, net                       339,653         358,076
     Inventories, net                               375,616         321,015
     Other current assets                           135,198         126,142
                                             --------------  --------------
          Total current assets                    1,093,941       1,028,974

Net property, plant and equipment                   300,732         271,561
Goodwill                                            321,820         328,439
Purchased intangibles, net                          228,590         210,304
Other assets                                         92,181         132,316
                                             --------------  --------------
          Total assets                       $    2,037,264  $    1,971,594
                                             ==============  ==============



Current liabilities:
     Notes payable and current maturities of
      long-term debt                         $        9,578  $       15,627
     Accounts payable                               117,982          96,470
     Accrued payroll and employee benefits          119,420         121,255
     Sales, income and other taxes payable           33,731          27,905
     Other current liabilities                      137,323         152,911
                                             --------------  --------------
          Total current liabilities                 418,034         414,168

Long-term debt, net of current maturities           445,979         441,805
Other long-term liabilities                         102,611         109,497
Minority interests                                   29,909          34,434
Stockholders' equity                              1,040,731         971,690
                                             --------------  --------------
                                             $    2,037,264  $    1,971,594
                                             ==============  ==============






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

                              (In thousands)
                                (UNAUDITED)


                                                  Year Ended December 31,
                                                     2008          2007
                                                 -----------   -----------
Cash flows from operating activities:
     Cash received from customers                $ 1,765,667   $ 1,467,626
     Cash paid to suppliers and employees         (1,495,669)   (1,225,968)
     Interest paid                                   (30,792)      (30,588)
     Income tax payments                             (49,159)      (38,253)
     Litigation settlement                            (4,493)       (4,228)
     Other operating activities                        5,817        22,991
                                                 -----------   -----------
     Net cash provided by operating activities       191,371       191,580

Cash flows from investing activities:
     Payment for acquisitions, net of cash
      received, and long-term investments            (53,014)     (387,673)
     Other investing activities                      (93,093)      133,244
                                                 -----------   -----------
     Net cash used in investing activities          (146,107)     (254,429)

Cash flows from financing activities:
     Payments on long-term debt                      (11,589)      (17,720)
     Other financing activities                       17,920        10,270
                                                 -----------   -----------
     Net cash provided by (used in) financing
      activities                                       6,331        (7,450)

Effect of exchange rate changes on cash               (8,835)        8,456
                                                 -----------   -----------

Net increase (decrease) in cash and cash
 equivalents                                          42,760       (61,843)
Cash and cash equivalents at beginning of year       161,764       223,607
                                                 -----------   -----------
Cash and cash equivalents at end of year         $   204,524   $   161,764
                                                 ===========   ===========


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

Net income                                       $    89,510   $    92,994
Adjustments to reconcile net income to net cash
 provided by operating activities (net of
 effects of acquisitions):
     Depreciation and amortization                    97,088        67,258
     Impairment expense                               28,757             -
     Changes in working capital                      (46,563)       11,038
     Litigation settlement                            (4,493)       (4,228)
     Other                                            27,072        24,518
                                                 -----------   -----------
Net cash provided by operating activities        $   191,371   $   191,580
                                                 ===========   ===========

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