SOURCE: Bio-Rad Laboratories

Bio-Rad Laboratories

August 05, 2014 16:15 ET

Bio-Rad Reports Second-Quarter 2014 Financial Results

HERCULES, CA--(Marketwired - Aug 5, 2014) - Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIO.B), a global provider of life science research and clinical diagnostic products, today announced financial results for the second quarter ended June 30, 2014.

Second-quarter reported revenues were $536.8 million, up 2.2 percent compared to $525.3 million reported for the second quarter of 2013. On a currency-neutral basis, quarterly revenues increased 1.1 percent compared to the same period last year. Second-quarter gross margin was 55.4 percent compared to 57.1 percent reported during the same quarter in 2013. The net decline in gross margin is largely attributable to product mix and continued pricing pressures in the diagnostics market. 

Net income for the second quarter of 2014 was $31.6 million, or $1.09 per share on a fully diluted basis, compared to $34.6 million, or $1.20 per share, respectively, during the same period last year.

On a reported basis, year-to-date revenues were up 2.1 percent to $1.05 billion compared to $1.02 billion for the first two quarters of 2013. On a currency-neutral basis, revenues grew 2.0 percent. 

Year-to-date net income for 2014 was $38.3 million, or $1.32 per share on a fully diluted basis, compared to $54.8 million, or $1.90 per share, respectively, during the same period in 2013.

The lower net income for the first half of 2014 when compared to the same period last year, was primarily driven by lower gross margins, higher SG&A that includes a $9.8 million accrual in the first quarter resulting from the Company's efforts to resolve the previously disclosed investigation of the Company in connection with the United States Foreign Corrupt Practices Act, and an increase in R&D expense as a result of our current quarter acquisition of GnuBIO, Inc. In contrast to the first half of 2013, the tax rate for the first six months of 2014 is higher as it did not include a benefit of the U.S. research & development tax credit. Cash flow was strong for the six months ended June 30, 2014 compared to the same period last year, as cash provided by operations was $149.8 million in 2014 versus $43.8 million last year. This strength was largely due to an increase in customer collections, as well as a decrease in interest paid in the first half of 2014 related to the redemption of Senior Subordinated Notes in 2013.

"Although we continued to see softness in some markets during the second quarter, we are encouraged by an increase in sales in many parts of the world," said Norman Schwartz, Bio-Rad Chief Executive Officer. "As the year continues, we will remain focused on new products and systems that will help us grow our business."

Life Science
Life Science segment net sales for the second quarter of 2014 were $170.3 million, essentially flat, when compared to the same period last year. On a currency-neutral basis, Life Science segment net sales decreased by 1.1 percent compared to the same quarter last year. Although sales increased in both Europe and the U.S. during the second quarter of 2014, the timing of orders in Asia, most notably in China, had a negative impact on results compared to the second quarter of 2013. This performance was somewhat offset by growth of the Company's Droplet Digital™ PCR, process chromatography, and cell biology products.

Clinical Diagnostics
Reported net sales for the Clinical Diagnostics segment in the second quarter of 2014 were $362.9 million, up 3.2 percent compared to the same quarter last year. On a currency-neutral basis, net sales increased 2.1 percent. While sales increased in China and emerging markets in the second quarter of 2014, this was partially offset by a decline in Europe. During the quarter, Bio-Rad announced the launch of two new kits for its fully-automated BioPlex® 2200 system: the BioPlex® HIVAg-Ab kit, a first-in-class 5th generation HIV test, and the BioPlex® Vitamin D kit. Both kits were launched in markets outside the U.S.  

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) August 5, 2014. Interested parties may access the call by dialing 866-318-8617 (in the U.S.) or 617-399-5136 (international), passcode: 33283045.

A live webcast of the conference call may be accessed in the Investor Relations section of 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), passcode: 48074970, for seven days following the call. The webcast of the call will be archived on the Bio-Rad site and may be accessed in the Investor Relations section.

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 approximately 7,750 people worldwide and had revenues exceeding $2.1 billion in 2013. For more information, visit our website at 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
June 30,
    Six Months Ended
June 30,
 
  2014     2013     2014     2013  
Net sales $ 536,832     $ 525,321     $ 1,046,176     $ 1,024,993  
  Cost of goods sold   239,590       225,220       473,645       453,480  
Gross profit   297,242       300,101       572,531       571,513  
                               
  Selling, general and administrative expense   195,838       195,331       398,113       381,248  
  Research and development expense   55,717       51,841       108,260       102,184  
Income from operations   45,687       52,929       66,158       88,081  
                               
  Interest expense   5,564       11,664       9,421       22,641  
  Foreign currency exchange (gains) losses, net   (286 )     865       2,451       2,393  
  Other (income) expense, net   (8,388 )     (8,644 )     (9,049 )     (10,044 )
Income before income taxes   48,797       49,044       63,335       73,091  
                               
  Provision for income taxes   (17,166 )     (14,442 )     (25,036 )     (18,317 )
Net income including noncontrolling interests   31,631       34,602       38,299       54,774  
                               
  Net income attributable to noncontrolling interests   -       -       -       (21 )
Net income attributable to Bio-Rad $ 31,631     $ 34,602     $ 38,299     $ 54,753  
                               
Basic earnings per share:                              
  Net income per basic share attributable to Bio-Rad $ 1.10     $ 1.21     $ 1.33     $ 1.92  
                               
  Weighted average common shares - basic   28,826       28,538       28,809       28,516  
                               
Diluted earnings per share:                              
  Net income per diluted share attributable to Bio-Rad $ 1.09     $ 1.20     $ 1.32     $ 1.90  
                               
  Weighted average common shares - diluted   29,092       28,868       29,076       28,843  
                                 
                                 
                                 
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
 
(In thousands)
       
       
       
       
  June 30,   December 31,
  2014   2013
  (UNAUDITED)    
Current assets:          
  Cash and cash equivalents $ 384,670   $ 331,551
  Short-term investments   262,908     277,369
  Accounts receivable, net   378,891     422,660
  Inventories, net   520,642     501,291
  Other current assets   220,383     214,985
    Total current assets   1,767,494     1,747,856
           
Property, plant and equipment, net   440,326     429,355
Goodwill, net   535,223     517,770
Purchased intangibles, net   292,547     266,188
Other assets   432,161     427,621
    Total assets $ 3,467,751   $ 3,388,790
           
           
Current liabilities:          
  Accounts payable $ 125,461   $ 148,510
  Accrued payroll and employee benefits   134,905     130,658
  Notes payable and current maturities of long-term debt   1,725     1,786
  Income taxes payable and deferred tax liabilities   28,264     20,948
  Other current liabilities   189,893     185,570
    Total current liabilities   480,248     487,472
           
Long-term debt, net of current maturities   435,607     435,615
Other long-term liabilities   301,952     278,981
    Total liabilities   1,217,807     1,202,068
           
    Total stockholders' equity   2,249,944     2,186,722
    Total liabilities and stockholders' equity $ 3,467,751   $ 3,388,790
               
               
               
Bio-Rad Laboratories, Inc.  
Condensed Consolidated Statements of Cash Flows  
   
(In thousands)  
(UNAUDITED)  
           
           
           
           
  Six Months Ended
June 30,
 
  2014     2013  
               
Cash flows from operating activities:              
  Cash received from customers $ 1,087,487     $ 1,006,345  
  Cash paid to suppliers and employees   (918,152 )     (911,227 )
  Interest paid   (10,912 )     (24,681 )
  Income tax payments   (17,059 )     (42,102 )
  Other operating activities   8,460       15,419  
  Net cash provided by operating activities   149,824       43,754  
               
Cash flows from investing activities:              
  Payments for acquisitions and long-term investments   (42,010 )     (65,883 )
  Other investing activities   (59,928 )     (68,683 )
  Net cash used in investing activities   (101,938 )     (134,566 )
               
Cash flows from financing activities:              
  Payments on long-term borrowings   (118 )     (123 )
  Other financing activities   6,416       (6,013 )
  Net cash provided by (used in) financing activities   6,298       (6,136 )
               
Effect of foreign exchange rate changes on cash   (1,065 )     559  
               
Net increase (decrease) in cash and cash equivalents   53,119       (96,389 )
Cash and cash equivalents at beginning of period   331,551       463,388  
Cash and cash equivalents at end of period $ 384,670     $ 366,999  
               
               
Reconciliation of net income including noncontrolling interests to net cash provided by operating activities:              
               
Net income including noncontrolling interests $ 38,299     $ 54,774  
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:              
  Depreciation and amortization   73,007       68,211  
  Changes in working capital   38,045       (90,568 )
  Other   473       11,337  
Net cash provided by operating activities $ 149,824     $ 43,754  
               

Contact Information

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