SOURCE: Bio-Rad Laboratories

Bio-Rad Laboratories

February 26, 2015 16:15 ET

Bio-Rad Reports Fourth-Quarter and Full-Year 2014 Financial Results

HERCULES, CA--(Marketwired - Feb 26, 2015) - Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIO.B), a global provider of life science research and clinical diagnostic products, announced financial results today for the fourth quarter and fiscal year ended December 31, 2014.

Fourth-quarter 2014 reported revenues were $598.2 million, a decrease of 0.7% compared to $602.6 million reported for the fourth quarter of 2013. On a currency-neutral basis, quarterly revenues increased 4.6% compared to the same period in 2013. Fourth-quarter gross margin was 53.1% compared to 53.6% during the same quarter in 2013.

Net income for the fourth quarter of 2014 was $39.0 million, or $1.34 per share on a fully diluted basis, compared to $30.1 million, or $1.04 per share during the same period in 2013. Impacting the fourth quarter of 2014 was $11.4 million of expense associated with a product line discontinuation and $7.0 million reflecting the re-valuation of contingent consideration related to prior acquisitions. The fourth quarter of 2014 benefitted from no accrual of settlement costs associated with the United States Foreign Corrupt Practice Act (FCPA) matter, compared to the prior year quarter.

The effective tax rate for the fourth quarter of 2014 of 14.7% was significantly lower than the effective tax rate for the fourth quarter of 2013 of 32.3% mainly due to the reinstatement of the 2014 U.S. research & development tax credit and releases of valuation allowances and tax reserves.

For the full year of 2014, sales were $2,175.0 million compared to $2,132.7 million in 2013, an increase of 2.0%, or 3.3% on a currency neutral basis. Full-year gross margin was 54.2% compared to 55.3% reported in 2013. The net decline in gross margin is largely attributable to $11.6 million resulting from plant closures and product line discontinuations.

Full-year net income in 2014 was $88.8 million, or $3.05 per share on a fully diluted basis, compared to $77.8 million, or $2.69 per share in 2013. The change in net income was primarily due to a reduction of $18.7 million of annual interest expense in 2014 arising from the redemption of Senior Subordinated Notes in September 2013 and $15.0 million less in settlement costs associated with the FCPA matter. These items were offset in large part by the overall impact of $14.7 million from plant closures and product line discontinuations as well as additional investment associated with our April 2014 acquisition of GnuBIO.

As announced previously, in the fourth quarter of 2014 the Company settled the previously disclosed investigations by the U.S. Department of Justice and the Securities and Exchange Commission in connection with the FCPA matter and paid approximately $55 million in resolution.

"In the absence of currency headwinds experienced in the latter part of the year, we are encouraged with our underlying performance in the fourth quarter and the entire year," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "The year was one of progress on many fronts and we look forward to 2015." 

Life Science
The Life Science segment net sales for the fourth quarter were $223.7 million, up 1.5% compared to the same period in 2013. On a currency-neutral basis, Life Science segment sales increased by 6.3%. The sales increase during the quarter reflected growth in the segment's core businesses, in particular, sales of gene expression and protein quantification products and the Company's QX200™ Droplet Digital™ PCR system. During the quarter Bio-Rad introduced its S3e™ Cell Sorter, an enhanced system for cell analysis. Full-year reported revenues for the Life Science segment were $728.3 million, up 2.6% compared to the same period in 2013, or an increase of 4.0% on a currency-neutral basis. 

Clinical Diagnostics
The Clinical Diagnostics segment reported net sales of $370.3 million for the fourth quarter, a decrease of 2.0% compared to the same period in 2013. On a currency-neutral basis, net sales were up 3.6%. Results from the fourth quarter reflected growth across most product lines, most notably immunology, quality controls, and diabetes products. During the fourth quarter, the Company announced that it had received Premarket Application approval from the U.S. Food and Drug Administration for the Company's Geenius™ HIV 1/2 Supplemental Assay. The assay is a single-use test intended for use as an additional, more specific, test to confirm the presence of and differentiate antibodies to HIV Types 1 and 2. Full-year reported revenues for the Clinical Diagnostics segment were $1,432.3 million, up 1.7% compared to the same period in 2013. On a currency-neutral basis, full-year sales increased 2.9% compared to 2013.

2014 Full-Year Highlights

  • Full-year, sales were $2,175.0 million compared to $2,132.7 million in 2013. After normalizing for the impact of currency effects, full year revenues increased 3.3%.
  • Year-over-year net income was $88.8 million, or $3.05 per share on a fully diluted basis, compared to $77.8 million, or $2.69 per share in 2013.
  • In April, Bio-Rad purchased GnuBIO, a droplet-based DNA sequencing technology that is intended to integrate workflow for medical diagnostics.
  • Also during the second quarter, Bio-Rad announced the launch of two new kits for its fully-automated BioPlex® 2200 system: the BioPlex® 2200 HIV Ag-Ab kit, a first-in-class 5th generation HIV test, and the BioPlex® 2200 25-OH Vitamin D kit. Both kits were launched in markets outside the U.S.
  • In September, Bio-Rad introduced ZOE™ Fluorescent Cell Imager, a digital imaging system that simplifies fluorescence imaging for cell culture applications.
  • During the fourth quarter Bio-Rad introduced the S3e Cell Sorter, a benchtop platform to improve cell research.
  • Also during the fourth quarter, Bio-Rad expanded its family of NGC™ Medium-Pressure Chromatography Systems launching the NGC Discover™ and NGC™ Discover Pro Systems. 
  • In November, Bio-Rad received Premarket Application approval from the U.S. Food and Drug Administration for the Company's Geenius HIV 1/2 Supplemental Assay. 

Management will discuss these results in a conference call at 2 PM Pacific Standard Time (5 PM Eastern Standard Time) February 26, 2015. Interested parties may access the call at 866-700-6067 within the U.S. or 617-213-8834 outside the U.S., passcode 53419928. A live webcast of the conference call may be accessed on the "Investor Relations" section of www.bio-rad.com under "Quarterly Results."

A replay of the call will be available at 888-286-8010 within the U.S. or 617-801-6888 outside the U.S., passcode 84461033 for seven days following the call. A webcast of the call will be archived on the Bio-Rad site for replay for up to a year and may be accessed under "Quarterly Results" in the "Investor Relations" section of our website.

About Bio-Rad
Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIO.B) develops, manufactures, and markets a broad range of innovative products and solutions for the life science research and clinical diagnostic markets. The company is renowned for its commitment to quality and customer service among university and research institutions, hospitals, public health and commercial laboratories, as well as the biotechnology, pharmaceutical, and food safety industries. Founded in 1952, Bio-Rad is based in Hercules, California, and serves more than 100,000 research and healthcare industry customers through its global network of operations. The company employs more than 7,600 people worldwide and had revenues exceeding $2.1 billion in 2014. For more information, please 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 and Quarterly Reports on Form 10-Q. 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
December 31,
    Year Ended
December 31,
 
    2014     2013     2014     2013  
Net sales   $ 598,224     $ 602,635     $ 2,175,044     $ 2,132,694  
  Cost of goods sold     280,814       279,886       996,527       954,216  
Gross profit     317,410       322,749       1,178,517       1,178,478  
                                 
  Selling, general and administrative expense     207,537       214,584       808,200       798,070  
  Research and development expense     59,287       55,848       220,333       210,952  
Income from operations     50,586       52,317       149,984       169,456  
                                 
  Interest expense     5,000       7,019       22,131       61,271  
  Foreign currency exchange losses, net     3,187       2,843       9,305       8,566  
  Other (income) expense, net     (3,347 )     (2,055 )     (13,009 )     (12,766 )
Income before income taxes     45,746       44,510       131,557       112,385  
                                 
  Provision for income taxes     (6,709 )     (14,374 )     (42,712 )     (34,574 )
Net income including noncontrolling interests     39,037       30,136       88,845       77,811  
                                 
  Net income attributable to noncontrolling interests     -       -       -       (21 )
Net income attributable to Bio-Rad   $ 39,037     $ 30,136     $ 88,845     $ 77,790  
                                 
Basic earnings per share:                                
  Net income per basic share attributable to Bio-Rad   $ 1.35     $ 1.05     $ 3.08     $ 2.72  
                                 
  Weighted average common shares - basic     29,000       28,708       28,876       28,586  
                                 
Diluted earnings per share:                                
  Net income per diluted share attributable to Bio-Rad   $ 1.34     $ 1.04     $ 3.05     $ 2.69  
                                 
  Weighted average common shares - diluted     29,192       28,988       29,133       28,906  
                                   
                                   
                                   
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
 
(in thousands)
(UNAUDITED)
       
       
       
  December 31,   December 31,
  2014   2013
           
Current assets:          
  Cash and cash equivalents $ 413,251   $ 331,551
  Short-term investments   284,384     277,369
  Accounts receivable, net   377,640     422,660
  Inventories, net   470,997     516,245
  Other current assets   170,095     209,654
    Total current assets   1,716,367     1,757,479
           
Property, plant and equipment, net   428,836     414,401
Goodwill, net   500,441     517,770
Purchased intangibles, net   254,228     266,188
Other assets   441,406     432,952
    Total assets $ 3,341,278   $ 3,388,790
           
           
Current liabilities:          
  Accounts payable $ 128,608   $ 148,510
  Accrued payroll and employee benefits   153,426     130,658
  Notes payable and current maturities of long-term debt   265     1,786
  Income and other taxes payable   35,165     33,555
  Other current liabilities   129,297     172,963
    Total current liabilities   446,761     487,472
           
Long-term debt, net of current maturities   435,710     435,615
Other long-term liabilities   273,652     278,981
    Total liabilities   1,156,123     1,202,068
           
    Total stockholders' equity   2,185,155     2,186,722
    Total liabilities and stockholders' equity $ 3,341,278   $ 3,388,790
   
   
   
Bio-Rad Laboratories, Inc.  
Condensed Consolidated Statements of Cash Flows  
   
(in thousands)  
(UNAUDITED)  
           
           
           
  Year Ended
December 31,
 
           
  2014     2013  
               
Cash flows from operating activities:              
  Cash received from customers $ 2,162,520     $ 2,090,030  
  Cash paid to suppliers and employees   (1,806,526 )     (1,804,028 )
  Interest paid   (20,793 )     (61,233 )
  Income tax payments   (28,939 )     (71,144 )
  Settlement to the SEC and DOJ relating to the FCPA, including interest   (55,050 )     -  
  Other operating activities   22,100       15,511  
  Net cash provided by operating activities   273,312       169,136  
               
Cash flows from investing activities:              
  Payments for acquisitions and long-term investments   (44,627 )     (72,054 )
  Other investing activities   (145,884 )     72,973  
  Net cash (used in) provided by investing activities   (190,511 )     919  
               
Cash flows from financing activities:              
  Payments on long-term borrowings   (253 )     (300,228 )
  Other financing activities   11,942       (11,469 )
  Net cash provided by (used in) financing activities   11,689       (311,697 )
               
Effect of foreign exchange rate changes on cash   (12,790 )     9,805  
               
Net increase (decrease) in cash and cash equivalents   81,700       (131,837 )
Cash and cash equivalents at beginning of year   331,551       463,388  
Cash and cash equivalents at end of year $ 413,251     $ 331,551  
               
               
Reconciliation of net income including noncontrolling interests to net cash provided by operating activities:              
               
Net income including noncontrolling interests $ 88,845     $ 77,811  
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:              
      Depreciation and amortization   149,889       147,157  
      Changes in working capital   21,700       (72,950 )
      Other   12,878       17,118  
Net cash provided by operating activities $ 273,312     $ 169,136  
               

Contact Information

  • Investor and Financial Contacts:
    Bio-Rad Laboratories, Inc.
    Christine Tsingos, Executive Vice President and Chief Financial Officer
    Ron Hutton, Vice President and Treasurer
    510-724-7000
    Email Contact