Bio-Rad Reports First-Quarter 2013 Financial Results

Marketwired

HERCULES, CA--(Marketwired - May 7, 2013) - Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIO.B), a multinational manufacturer and distributor of life science research and clinical diagnostic products, announced financial results today for the first quarter ended March 31, 2013.

First-quarter reported revenues were $499.7 million, up 2.8% compared to $486.3 million reported for the first quarter of 2012. These results include $6.2 million of sales resulting from the Company's acquisition of AbD Serotec in January 2013. On a currency-neutral basis, quarterly revenues increased 3.6% compared to the same period last year. First-quarter 2013 gross margin was 54.3% compared to 57.3% during the same quarter last year. The year-over-year reduction in gross margin in the first quarter reflected an unfavorable sales mix, inclusion of amortization expense related to acquisitions, higher manufacturing costs, increased royalty and license accruals, obsolete inventory, and costs associated with the new medical device tax in the U.S. 

Net income attributable to Bio-Rad for the first quarter of 2013 was $19.5 million, or $0.68 per share on a fully diluted basis compared to $31.0 million, or $1.09 per share during the same period last year. The lower net income in the first quarter of 2013 versus the first quarter of 2012 reflected lower gross profit, higher relative SG&A expenses largely due to employee expenses associated with acquisitions and our investment in new systems, as well as a decrease in other income due to higher realized gains on the sale of equity investments in the first quarter of 2012. These results were somewhat offset by a lower tax rate due to the retroactive reinstatement of the 2012 U.S. research & development tax credit.

"We continued to see softness in the research markets, impacting our results in the first quarter," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "This softness, together with a number of operational factors, affected our profitability. While first-quarter sales growth was slow, our outlook for the remainder of the year is cautiously optimistic." 

Life Science
The Life Science segment net sales for the first quarter of 2013 were $156.3 million, up 0.9% compared to the same period last year. On a currency-neutral basis, Life Science segment sales increased 2.5% compared to the first quarter in 2012. Results from the first quarter benefitted from increased sales of Droplet Digital PCR products, the ProteOn XPR36 protein interaction array system and reagents, as well as sales of antibodies and reagents resulting from the Company's acquisition of AbD Serotec. AbD Serotec is one of the world's leading antibody manufacturers offering over 15,000 antibodies, kits, and accessories. The acquisition provides Bio-Rad access to a comprehensive catalog of antibodies and a powerful in vitro antibody generation technology, enabling the validation of total assay solutions on Bio-Rad's research platforms for western blotting, multiplex protein expression, ELISA, and cell sorting product lines. Growth of the Life Science segment during the first quarter of 2013 was offset by continued challenges in the research spending environment, particularly in the U.S. and Europe.

Clinical Diagnostics
Net sales for the Clinical Diagnostics segment in the first quarter of 2013 were $339.9 million, an increase of 3.9% compared to the first quarter for 2012. On a currency-neutral basis, net sales were up 4.3% compared to the same period last year. During the first quarter, the Clinical Diagnostics segment had growth across its product lines most notably from its quality controls and diabetes products as well as placements of the BioPlex® 2200 system. In February, Bio-Rad and Inpeco, a leading company in the field of laboratory automation, entered into a development agreement to build interfaces between Bio-Rad's clinical diagnostics platforms for diabetes, autoimmune disease, and infectious disease testing and Inpeco's FlexLab 3.6 system. The agreement provides clinical diagnostics labs with a complete and integrated solution that automates sample processing, consolidates testing platforms, and improves operating efficiency of its instruments. 

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) May 7, 2013. Interested parties may access the call by dialing 866-515-2909 within the U.S. or 617-399-5123 outside the U.S., access number 66262761.

A live webcast of the conference call may be accessed in the Investor Relations section of our website at www.bio-rad.com. A replay of the call will be available at 888-286-8010 within the U.S. or 617-801-6888 outside the U.S., access number 43386359, 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 of www.bio-rad.com.

About Bio-Rad
Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIO.B) has been at the center of scientific discovery for 60 years, manufacturing and distributing a broad range of products for 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 industry customers through its global network of operations. The company employs approximately 7,300 people worldwide and had revenues exceeding $2 billion in 2012. Visit us 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 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
March 31,
 
    2013     2012  
Net sales   $ 499,672     $ 486,277  
  Cost of goods sold     228,260       207,695  
Gross profit     271,412       278,582  
                 
  Selling, general and administrative expense     185,917       171,293  
  Research and development expense     51,941       52,923  
Income from operations     33,554       54,366  
                 
  Interest expense     10,977       13,196  
  Foreign exchange losses, net     1,528       1,441  
  Other (income) expense, net     (1,400 )     (6,450 )
Income before income taxes     22,449       46,179  
                 
  Provision for income taxes     (2,929 )     (15,235 )
Net income including noncontrolling interests     19,520       30,944  
                 
  Net (income) loss attributable to noncontrolling interests     (21 )     61  
Net income attributable to Bio-Rad   $ 19,499     $ 31,005  
                 
Basic earnings per share:                
  Net income per share basic attributable to Bio-Rad   $ 0.68     $ 1.10  
                 
  Weighted average common shares - basic     28,494       28,201  
                 
Diluted earnings per share:                
  Net income per share diluted attributable to Bio-Rad   $ 0.68     $ 1.09  
                 
  Weighted average common shares - diluted     28,817       28,553  
                   
                   
 
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
 
(In thousands)
 
         
         
         
    March 31,   December 31,
    2013   2012
    (UNAUDITED)    
Current assets:            
  Cash and cash equivalents   $ 368,629   $ 463,388
  Short-term investments     468,203     457,685
  Accounts receivable, net     377,548     398,739
  Inventories, net     467,321     448,370
  Other current assets     183,479     161,750
    Total current assets     1,865,180     1,929,932
             
Property, plant and equipment, net     422,699     416,938
Goodwill, net     502,145     495,418
Purchased intangibles, net     286,722     260,939
Other assets     380,057     333,526
    Total assets   $ 3,456,803   $ 3,436,753
             
Current liabilities:            
  Accounts payable   $ 119,340   $ 130,867
  Accrued payroll and employee benefits     127,605     135,955
  Notes payable and current maturities of long-term debt     1,698     1,750
  Income and other taxes payable     32,956     32,299
  Other current liabilities     165,141     169,049
    Total current liabilities     446,740     469,920
             
Long-term debt, net of current maturities     732,586     732,414
Other long-term liabilities     246,260     223,149
    Total liabilities     1,425,586     1,425,483
             
Bio-Rad stockholders' equity     2,031,217     2,010,735
Noncontrolling interests     -     535
    Total stockholders' equity     2,031,217     2,011,270
    Total liabilities and stockholders' equity   $ 3,456,803   $ 3,436,753
                 
   
   
Bio-Rad Laboratories, Inc.  
Condensed Consolidated Statements of Cash Flows  
   
(In thousands)  
(UNAUDITED)  
             
             
             
             
    Three Months
Ended March 31,
 
             
    2013     2012  
                 
Cash flows from operating activities:                
  Cash received from customers   $ 504,158     $ 501,075  
  Cash paid to suppliers and employees     (459,667 )     (428,733 )
  Interest paid     (11,675 )     (12,340 )
  Income tax payments     (14,195 )     (25,010 )
  Other operating activities     1,879       268  
  Net cash provided by operating activities     20,500       35,260  
                 
                 
Cash flows from investing activities:                
  Payment for acquisitions and long-term investments     (75,056 )     (15,329 )
  Other investing activities     (40,283 )     (70,956 )
  Net cash used in investing activities     (115,339 )     (86,285 )
                 
Cash flows from financing activities:                
  Payments on long-term debt     (74 )     (225 )
  Other financing activities     3,222       3,944  
  Net cash provided by financing activities     3,148       3,719  
                 
Effect of foreign exchange rate changes on cash     (3,068 )     6,887  
                 
Net decrease in cash and cash equivalents     (94,759 )     (40,419 )
Cash and cash equivalents at beginning of period     463,388       574,231  
Cash and cash equivalents at end of period   $ 368,629     $ 533,812  
                 
                 
Reconciliation of net income including noncontrolling interests to net cash provided by operating activities:                
                 
Net income including noncontrolling interests   $ 19,520     $ 30,944  
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:                
  Depreciation and amortization     33,290       31,096  
  Changes in working capital     (32,814 )     (20,753 )
  Other     504       (6,027 )
Net cash provided by operating activities   $ 20,500     $ 35,260  
                 
Contact:
Investor and Financial
Bio-Rad Laboratories, Inc.
Christine Tsingos
Executive Vice President and Chief Financial Officer

Ron Hutton
Vice President, Treasurer

510-724-7000
Email Contact
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