SOURCE: Bio-Rad Laboratories

Bio-Rad Laboratories

August 03, 2016 16:15 ET

Bio-Rad Reports Second-Quarter 2016 Financial Results

HERCULES, CA--(Marketwired - Aug 3, 2016) - 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, 2016.

Second-quarter reported revenues were $516.8 million, an increase of 2.1 percent compared to $506.1 million reported for the second quarter of 2015. On a currency-neutral basis, quarterly revenues increased 2.8 percent compared to the same period last year. Second-quarter gross margin was 54.2 percent compared to 55.2 percent reported during the same quarter in 2015. The decrease in gross margin during the second quarter of 2016 was primarily the result of sales mix and higher manufacturing costs compared to the same period last year.

Net income for the second quarter of 2016 was $18.0 million, or $0.61 per share on a fully diluted basis, compared to $28.4 million, or $0.97 per share, respectively, during the same period last year.

The lower net income for the second quarter of 2016 versus the second quarter of 2015 was primarily due to several discrete items that increased expenses approximately $18 million and include the planned restructuring of our European operations, the termination of a research and development project, and costs associated with various legal matters. The effective tax rate for the second quarter of 2016 was 33%, compared to the 28% tax rate for the same quarter in 2015. The lower tax rate in 2015 was primarily due to a decrease in tax reserves as a result of the expiration of statutes of limitations.

On a reported basis, revenues for the first half of 2016 increased 0.9 percent to $988.0 million compared to $978.9 million for the same period in 2015. On a currency-neutral basis, revenues grew 3.3 percent.

Year-to-date net income for 2016 was $30.3 million, or $1.03 per share on a fully diluted basis, compared to $46.2 million, or $1.58 per share, respectively, during the same period in 2015. 

"We are encouraged by sales performance in the first half of the year reflecting strength in many of our markets," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "Although investments in acquired technologies and systems have tempered profitability for the first half of the year, these investments in our operation are necessary to support our growth in the future."

Life Science
Life Science segment net sales for the second quarter of 2016 were $180.0 million, an increase of 5.5 percent, when compared to the same period last year. On a currency-neutral basis, sales increased 6.0 percent compared to the same period last year. Results from the second quarter benefitted from increased sales of the Company's Droplet Digital PCR and process chromatography products. Sales increased primarily in North America, China, and Asia. In April, Bio-Rad announced the launch of five Droplet Digital PCR (ddPCR) Multiplex Mutation Screening Kits for detecting multiple cancer mutations. The combination of ddPCR and multiplexing technologies increases the throughput of genetic analysis to give clinical researchers more information per patient sample.

Clinical Diagnostics
Reported net sales for the Clinical Diagnostics segment in the second quarter of 2016 were $333.7 million, an increase of 0.5 percent compared to the same quarter last year. On a currency-neutral basis, sales increased 1.3 percent compared to the same period in 2015. The Clinical Diagnostics segment sales performance reflected modest growth across most product lines, most notably clinical immunology, blood typing, and quality control products. Sales growth increased across most regions, driven by North America, Eastern Europe, and China. During the quarter Bio-Rad announced the launch of Amplichek II quality control, the first in a series of infectious disease controls that the Company plans to introduce for the molecular diagnostic testing market.

Management will discuss these results in a conference call at 2 PM Pacific Daylight Time (5 PM Eastern Time) August 3, 2016. Interested parties may access the call at 855-779-9068 within the U.S. or 631-485-4862 outside the U.S., Conference ID: 46148478. You may also listen to the conference call live via a webcast that is available on the "Investor Relations" section of our website under "Quarterly Results" at www.bio-rad.com. The webcast will be available for up to a year.

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 7,800 people worldwide and had revenues exceeding $2 billion in 2015. For more information, please visit www.bio-rad.com

This release may be deemed to contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements we make regarding the growth of our business, our release of new products and future financial performance. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "plan," "believe," "expect," "anticipate," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions, although not all forward-looking statements contain these words. 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. These risks and uncertainties include our ability to develop and market new or improved products, foreign currency exchange fluctuations, difficulties in implementing our global enterprise resource planning system, recent and planned changes to our global organizational structure and executive management team, our ability to integrate acquired companies, products or technologies into our company successfully, our ability to compete effectively, reductions in government funding or capital spending of our customers, international legal and regulatory risks, product quality and liability issues, supply chain issues, changes in the healthcare industry, global economic conditions, and natural disasters and other catastrophic events beyond our control. For further information regarding the Company's risks and uncertainties, please refer to the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's public reports filed with the Securities and Exchange Commission (the "SEC"), including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016 to be filed with the SEC. 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,
 
    2016     2015     2016     2015  
Net sales   $ 516,777     $ 506,102     $ 987,974     $ 978,923  
  Cost of goods sold     236,545       226,505       443,713       429,220  
Gross profit     280,232       279,597       544,261       549,703  
                                 
  Selling, general and administrative expense     205,536       192,845       395,252       381,400  
  Research and development expense     52,171       46,547       100,757       93,749  
Income from operations     22,525       40,205       48,252       74,554  
                                 
  Interest expense     5,632       4,834       11,212       9,836  
  Foreign currency exchange losses, net     1,237       2,938       2,366       6,744  
  Other (income) expense, net     (11,208 )     (7,107 )     (12,385 )     (8,260 )
Income before income taxes     26,864       39,540       47,059       66,234  
                                 
  Provision for income taxes     (8,850 )     (11,117 )     (16,769 )     (19,993 )
Net income   $ 18,014     $ 28,423     $ 30,290     $ 46,241  
                                 
Basic earnings per share:                                
  Net income per basic share   $ 0.61     $ 0.98     $ 1.03     $ 1.59  
                                 
  Weighted average common shares - basic     29,398       29,136       29,381       29,114  
                                 
Diluted earnings per share:                                
  Net income per diluted share   $ 0.61     $ 0.97     $ 1.03     $ 1.58  
                                 
  Weighted average common shares - diluted     29,589       29,381       29,549       29,338  
                                   
 
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
 
(In thousands)
         
         
    June 30,   December 31,
    2016   2015
    (UNAUDITED)    
Current assets:            
  Cash and cash equivalents   $ 418,651   $ 457,549
  Short-term investments     377,154     332,928
  Accounts receivable, net     366,281     391,485
  Inventories, net     541,514     490,224
  Other current assets     102,088     105,410
    Total current assets     1,805,688     1,777,596
             
Property, plant and equipment, net     457,685     437,690
Goodwill, net     505,311     495,948
Purchased intangibles, net     230,709     214,026
Other investments     810,463     719,840
Other assets     64,779     64,618
    Total assets   $ 3,874,635   $ 3,709,718
             
             
Current liabilities:            
  Accounts payable, accrued payroll and employee benefits   $ 256,112   $ 280,248
  Current maturities of long-term debt     294     298
  Income and other taxes payable     21,856     29,339
  Other current liabilities     132,143     131,466
    Total current liabilities     410,405     441,351
             
Long-term debt, net of current maturities     434,057     433,883
Other long-term liabilities     415,612     343,981
    Total liabilities     1,260,074     1,219,215
             
    Total stockholders' equity     2,614,561     2,490,503
    Total liabilities and stockholders' equity   $ 3,874,635   $ 3,709,718
                 
   
Bio-Rad Laboratories, Inc.  
Condensed Consolidated Statements of Cash Flows  
   
(In thousands)  
(UNAUDITED)  
   
   
    Six Months Ended
June 30,
 
    2016     2015  
                 
Cash flows from operating activities:                
  Cash received from customers   $ 1,020,149     $ 971,616  
  Cash paid to suppliers and employees     (935,587 )     (898,757 )
  Interest paid, net     (10,911 )     (9,071 )
  Income tax payments, net     (11,085 )     (6,269 )
  Other operating activities     7,141       10,460  
  Net cash provided by operating activities     69,707       67,979  
                 
Cash flows from investing activities:                
  Payments for acquisition and long-term investment     (11,477 )     (2,589 )
  Other investing activities     (98,851 )     (53,267 )
  Net cash used in investing activities     (110,328 )     (55,856 )
                   
Cash flows from financing activities:                
  Payments on long-term borrowings     (156 )     (131 )
  Other financing activities     3,450       2,861  
  Net cash provided by financing activities     3,294       2,730  
                 
Effect of foreign exchange rate changes on cash     (1,571 )     22,029  
                 
Net (decrease) increase in cash and cash equivalents     (38,898 )     36,882  
Cash and cash equivalents at beginning of period     457,549       413,251  
Cash and cash equivalents at end of period   $ 418,651     $ 450,133  
                 
                 
Reconciliation of net income to net cash provided by operating activities:                
Net income   $ 30,290     $ 46,241  
Adjustments to reconcile net income to net cash provided by operating activities:                
  Depreciation and amortization     71,668       64,409  
  Changes in working capital     (54,026 )     (44,196 )
  Other     21,775       1,525  
Net cash provided by operating activities   $ 69,707     $ 67,979  

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