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 5^th 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

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
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