Bio-Rad Reports Second-Quarter 2013 Financial Results

August 6, 2013

HERCULES, CA--(Marketwired - Aug 6, 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 second quarter ended June 30, 2013.

Second-quarter reported revenues were $525.3 million, up 2.9 percent compared to $510.4 million reported for the second 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 4.0 percent compared to the same period last year. Second-quarter gross margin was 57.1 percent compared to 56.4 percent reported during the same quarter last year.

Net income for the second quarter of 2013 was $34.7 million compared to $48.3 million reported for the second quarter of 2012. Second-quarter earnings for 2013 were $1.20 per share on a fully diluted basis versus $1.69 per share reported for the same period last year.

On a reported basis, year-to-date revenues were up 2.8 percent to $1,025.0 million compared to $996.7 million for the first two quarters of 2012. On a currency-neutral basis, revenues grew 3.8 percent. 

Year-to-date net income for 2013 was $54.2 million, or $1.88 per share on a fully diluted basis, compared to $79.3 million, or $2.78 per share, respectively, during the same period in 2012.

The lower net income in both the second quarter and year-to-date of 2013, when compared to the second quarter and year-to-date of 2012, was primarily driven by higher SG&A, largely due to employee expenses associated with acquisitions and investment in new systems as well as certain events that occurred in the first half of 2012 that favorably affected results in 2012. These favorable events in 2012 include an $8.1 million reduction in the valuation of the contingent consideration associated with the QuantaLife acquisition and the receipt of certain foreign receivables that had been previously reserved, both of which occurred during the second quarter of 2012, as well as higher realized gains on the sale of equity investments during the first half of 2012. 

"In spite of continued softness in some markets and currency headwinds in the short term, we continue our investment in new products and systems," said Norman Schwartz, Bio-Rad Chief Executive Officer. "These investments build on our technology base and will provide us with greater operating leverage for the future." 

Life Science
Life Science segment net sales for the second quarter of 2013 were $170.4 million, up 4.9 percent compared to the same period last year. On a currency-neutral basis, Life Science segment net sales increased by 6.2 percent compared to the same quarter last year. This performance was driven by sales of antibodies and reagents resulting from the Company's acquisition of AbD Serotec in the first quarter of 2013 as well as sales of Bio-Rad's Droplet Digital PCR product line. During the quarter, the Company introduced the S3cell sorter, an easy-to-use, automated and affordable benchtop cell sorter designed for both core facilities and individual research labs. 

Clinical Diagnostics
Reported net sales for the Clinical Diagnostics segment in the second quarter of 2013 were $351.5 million, up 2.2 percent compared to the same quarter last year. On a currency-neutral basis, net sales increased 3.2 percent. These results reflect growth across most product lines most notably from quality controls, diabetes, and the BioPlex® 2200 System. Strength in Latin America, Asia Pacific, and China helped to offset weakness in Western Europe. During the quarter, the Company launched the Geenius™ HIV 1/2 Confirmatory for markets outside the U.S. The Geenius HIV 1/2 Confirmatory is a complete system that offers several advantages over classic confirmatory methods.

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) August 6, 2013. Interested parties may access the call by dialing 800-706-7741 (in the U.S.) or 617-614-3471 (international), access number 98652830.

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), access number 12335512, 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 ) 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 7,600 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, 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,
 
    2013     2012     2013     2012  
Net sales   $ 525,321     $ 510,422     $ 1,024,993     $ 996,699  
  Cost of goods sold     225,220       222,522       453,480       430,217  
Gross profit     300,101       287,900       571,513       566,482  
                                 
  Selling, general and administrative expense     195,331       162,256       381,248       333,549  
  Research and development expense     53,224       52,336       105,165       105,259  
Income from operations     51,546       73,308       85,100       127,674  
                                 
  Interest expense     11,664       12,401       22,641       25,597  
  Foreign exchange losses, net     865       1,619       2,393       3,060  
  Other (income) expense, net     (8,644 )     (6,731 )     (10,044 )     (13,181 )
Income before income taxes     47,661       66,019       70,110       112,198  
                                 
  Provision for income taxes     (12,987 )     (17,454 )     (15,916 )     (32,689 )
Net income including noncontrolling interests     34,674       48,565       54,194       79,509  
                                 
  Net income attributable to noncontrolling interests     -       (222 )     (21 )     (161 )
Net income attributable to Bio-Rad   $ 34,674     $ 48,343     $ 54,173     $ 79,348  
                                 
Basic earnings per share:                                
  Net income per share basic attributable to Bio-Rad   $ 1.22     $ 1.71     $ 1.90     $ 2.81  
                                 
  Weighted average common shares - basic     28,538       28,250       28,516       28,226  
                                 
Diluted earnings per share:                                
  Net income per share diluted attributable to Bio-Rad   $ 1.20     $ 1.69     $ 1.88     $ 2.78  
                                 
  Weighted average common shares - diluted     28,868       28,610       28,843       28,582  
                                 
                                 
 
 
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
         
    June 30,   December 31,
    2013   2012
    (UNAUDITED)    
Current assets:        
  Cash and cash equivalents   $ 366,999   $ 463,388
  Short-term investments     467,433     457,685
  Accounts receivable, net     395,974     398,739
  Inventories, net     484,667     448,370
  Other current assets     187,963     161,750
    Total current assets     1,903,036     1,929,932
             
Property, plant and equipment, net     418,530     416,938
Goodwill, net     501,496     495,418
Purchased intangibles, net     277,305     260,939
Other assets     382,454     333,526
    Total assets   $ 3,482,821   $ 3,436,753
             
             
Current liabilities:            
  Accounts payable   $ 129,119   $ 130,867
  Accrued payroll and employee benefits     118,782     135,955
  Notes payable and current maturities of long-term debt     1,693     1,750
  Income and other taxes payable     25,898     32,299
  Other current liabilities     155,752     169,049
    Total current liabilities     431,244     469,920
             
Long-term debt, net of current maturities     732,800     732,414
Other long-term liabilities     247,835     223,149
    Total liabilities     1,411,879     1,425,483
             
Bio-Rad stockholders' equity     2,070,942     2,010,735
Noncontrolling interests     -     535
    Total stockholders' equity     2,070,942     2,011,270
    Total liabilities and stockholders' equity   $ 3,482,821   $ 3,436,753
             
             
   
   
Bio-Rad Laboratories, Inc.  
Condensed Consolidated Statements of Cash Flows  
(In thousands)  
(UNAUDITED)  
             
    Six Months Ended June 30,  
    2013     2012  
             
Cash flows from operating activities:            
  Cash received from customers   $ 1,006,345     $ 1,008,515  
  Cash paid to suppliers and employees     (910,801 )     (835,174 )
  Interest paid     (24,681 )     (24,101 )
  Income tax payments     (42,102 )     (47,619 )
  Other operating activities     10,427       7,281  
  Net cash provided by operating activities     39,188       108,902  
                 
Cash flows from investing activities:                
  Payments for acquisitions and long-term investments     (79,383 )     (18,589 )
  Other investing activities     (63,691 )     (218,249 )
  Net cash used in investing activities     (143,074 )     (236,838 )
                 
Cash flows from financing activities:                
  Payments on long-term borrowings     (123 )     (367 )
  Other financing activities     7,061       6,886  
  Net cash provided by financing activities     6,938       6,519  
                 
Effect of foreign exchange rate changes on cash     559       3,673  
                 
Net decrease in cash and cash equivalents     (96,389 )     (117,744 )
Cash and cash equivalents at beginning of period     463,388       574,231  
Cash and cash equivalents at end of period   $ 366,999     $ 456,487  
                 
                 
Reconciliation of net income including noncontrolling interests to net cash provided by operating activities:                
                 
Net income including noncontrolling interests   $ 54,194     $ 79,509  
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:                
  Depreciation and amortization     68,211       62,749  
  Changes in working capital     (89,563 )     (25,426 )
  Other     6,346       (7,930 )
Net cash provided by operating activities   $ 39,188     $ 108,902