Bio-Rad Reports Third-Quarter 2012 Financial Results

Marketwired

HERCULES, CA--(Marketwire - Nov 6, 2012) - 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 third quarter ended September 30, 2012.

Third-quarter reported revenues were $498.7 million, a decrease of 3.5% compared to $516.5 million reported for the third quarter of 2011. On a currency-neutral basis, quarterly revenues increased 3.6% compared to the same period last year. This growth includes $5.2 million of sales of droplet digital PCR products related to Bio-Rad's acquisition of QuantaLife in October 2011. Third-quarter gross margin was 54.8%, compared to 57.3% during the same quarter in 2011. Gross margin was impacted by approximately $2.2 million of amortization expense related to the Company's acquisition of QuantaLife, as well as a $3.8 million reserve associated with certain environmental issues.

Net income for third quarter was $42.4 million, or $1.48 per share on a fully diluted basis versus $45.9 million, or $1.61 per share reported for the same period last year. Bio-Rad's current quarter income results were favorably impacted by $8.5 million due to a reduction in the valuation of the contingent consideration associated with the QuantaLife acquisition.

Year-to-date revenues were $1.50 billion, a decrease of 1.8% compared to $1.52 billion reported in the first three quarters of 2011. Adjusting for the impact of currency, year-to-date revenue growth was 2.7%.

Year-to-date net income for the first three quarters of 2012 was $121.7 million, or $4.26 per share on a fully diluted basis compared to $119.0 million, or $4.18 per share reported during the same period in 2011.

"Performance in the third quarter reflects momentum and growth in many of our product areas, although macroeconomic challenges continue to have an impact on our performance," said Norman Schwartz, Bio-Rad President and Chief Executive Officer.

Life Science
The Life Science segment net sales for the third quarter were $167.0 million, down 2.6% compared to the same period last year. On a currency-neutral basis, Life Science segment sales increased by 2.2% compared to the third quarter of 2011. Performance during the third quarter reflects strength across the segment's product lines, in particular, the Company's QX100 Droplet Digital PCR system as well as shipments of process chromatography media. Strong sales in North America were offset by slowness in Europe and Japan. In September, Bio-Rad introduced the TC20 automated cell counter, the next generation of the Company's TC10 automated cell counter that provides accurate and reliable counts of live mammalian cells in 30 seconds. Also during the quarter, Bio-Rad acquired an automated benchtop cell sorting system from Propel Labs. First shipments of the S3Cell Sorter are anticipated in January 2013.

Clinical Diagnostics
Reported net sales for the Clinical Diagnostics segment in the third quarter were $328.4 million, down 3.8% compared to the third quarter in 2011. On a currency-neutral basis, sales were up 4.5%. During the quarter, the Clinical Diagnostics segment had growth across most product lines most notably from quality controls, diabetes and immunohematology products, as well as the BioPlex® 2200 system. Strength in the Pacific Rim, the U.S., and Eastern Europe were offset by weakness in Western Europe. 

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) November 6, 2012. Interested parties may access the call by dialing 866-730-5764 (in the U.S.) or 857-350-1588 (international), access number 44911474.

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 48801274, for seven days following the call. The webcast of the call will be archived on the Bio-Rad site for on-demand replay for up to a year 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 remained at the center of scientific discovery for more than 50 years, manufacturing and distributing a broad range of products for the life science research and clinical diagnostic markets. The Company is renowned worldwide among hospitals, universities, major research institutions, as well as biotechnology and pharmaceutical companies for its commitment to quality and customer service. Founded in 1952, Bio-Rad is headquartered in Hercules, California, and serves more than 100,000 research and industry customers worldwide through its global network of operations. The Company employs over 7,000 people globally and had revenues exceeding $2 billion in 2011. For more information, 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
September 30,
    Nine Months Ended
September 30,
 
    2012     2011     2012     2011  
Net sales   $ 498,697     $ 516,514     $ 1,495,396     $ 1,523,291  
  Cost of goods sold     225,187       220,338       655,404       656,368  
Gross profit     273,510       296,176       839,992       866,923  
                                 
  Selling, general and administrative expense     160,274       176,867       493,823       521,370  
  Research and development expense     49,004       45,387       154,263       136,327  
Income from operations     64,232       73,922       191,906       209,226  
                                 
  Interest expense     11,901       12,341       37,498       41,148  
  Foreign exchange losses, net     448       6,346       3,508       12,132  
  Other (income) expense, net     (1,511 )     (538 )     (14,692 )     (5,907 )
Income before income taxes     53,394       55,773       165,592       161,853  
                                 
  Provision for income taxes     (11,023 )     (9,911 )     (43,712 )     (43,031 )
Net income including noncontrolling interests     42,371       45,862       121,880       118,822  
                                 
  Net loss (income) attributable to noncontrolling interests     13       35       (148 )     162  
Net income attributable to Bio-Rad   $ 42,384     $ 45,897     $ 121,732     $ 118,984  
                                 
Basic earnings per share:                                
  Net income per share basic attributable to Bio-Rad   $ 1.50     $ 1.63     $ 4.31     $ 4.25  
                                 
  Weighted average common shares - basic     28,312       28,072       28,255       27,997  
                                 
Diluted earnings per share:                                
  Net income per share diluted attributable to Bio-Rad   $ 1.48     $ 1.61     $ 4.26     $ 4.18  
                                 
  Weighted average common shares - diluted     28,645       28,456       28,609       28,454  
                                 
 
 
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
 
(in thousands)
 
    September 30,   December 31,
    2012   2011
    (UNAUDITED)    
Current assets:            
  Cash and cash equivalents   $ 426,457   $ 574,231
  Short-term investments     427,164     238,884
  Accounts receivable, net     375,800     398,674
  Inventories, net     458,428     433,510
  Other current assets     157,592     152,856
    Total current assets     1,845,441     1,798,155
             
Property, plant and equipment, net     397,949     349,501
Goodwill, net     489,355     468,933
Purchased intangibles, net     268,866     259,497
Other assets     301,405     220,717
    Total assets   $ 3,303,016   $ 3,096,803
             
             
Current liabilities:            
  Accounts payable   $ 113,282   $ 129,124
  Accrued payroll and employee benefits     129,690     112,564
  Notes payable and current maturities of long-term debt     306     814
  Income and other taxes payable     30,396     52,285
  Other current liabilities     159,992     164,328
    Total current liabilities     433,666     459,115
             
Long-term debt, net of current maturities     732,233     731,698
Other long-term liabilities     201,635     161,608
    Total liabilities     1,367,534     1,352,421
             
Bio-Rad stockholders' equity     1,934,882     1,743,937
Noncontrolling interests     600     445
    Total stockholders' equity     1,935,482     1,744,382
    Total liabilities and stockholders' equity   $ 3,303,016   $ 3,096,803
             
   
   
Bio-Rad Laboratories, Inc.  
Condensed Consolidated Statements of Cash Flows  
   
(in thousands)  
(UNAUDITED)  
             
    Nine Months Ended September 30,  
             
    2012     2011  
                 
Cash flows from operating activities:                
  Cash received from customers   $ 1,512,991     $ 1,508,934  
  Cash paid to suppliers and employees     (1,231,537 )     (1,249,674 )
  Interest paid     (35,929 )     (46,086 )
  Income tax payments     (73,784 )     (38,029 )
  Other operating activities     8,503       6,094  
  Net cash provided by operating activities     180,244       181,239  
                 
Cash flows from investing activities:                
  Payments for acquisitions and long-term investments     (38,479 )     (8,698 )
  Other investing activities     (302,285 )     (205,191 )
  Net cash used in investing activities     (340,764 )     (213,889 )
                 
Cash flows from financing activities:                
  Payments on long-term borrowings     (496 )     (226,615 )
  Other financing activities     9,569       14,788  
  Net cash provided by (used in) financing activities     9,073       (211,827 )
                 
Effect of foreign exchange rate changes on cash     3,673       8,954  
                 
Net decrease in cash and cash equivalents     (147,774 )     (235,523 )
Cash and cash equivalents at beginning of period     574,231       906,551  
Cash and cash equivalents at end of period   $ 426,457     $ 671,028  
                 
                 
Reconciliation of net income including noncontrolling interests to net cash provided by operating activities:                
                 
Net income including noncontrolling interests   $ 121,880     $ 118,822  
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:                
  Depreciation and amortization     94,885       88,127  
  Changes in working capital     (32,271 )     (49,450 )
  Other     (4,250 )     23,740  
Net cash provided by operating activities   $ 180,244     $ 181,239  
                 
Contact:
For more information contact:
Christine Tsingos
Vice President and Chief Financial Officer
Ron Hutton
Treasurer
Bio-Rad Laboratories, Inc.
510-724-7000
Email Contact
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