Bio-Rad Laboratories Reports Third Quarter Financial Results
HERCULES, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Bio-Rad
Laboratories, Inc. (Amex: BIO; BIOb), a multinational manufacturer
and distributor of life science research products and clinical
diagnostics, announced financial results today for the third
quarter ended September 30, 2004. Third quarter net sales from
continuing operations were $258.8 million, up 7.0 percent compared
to the $241.8 million reported for the same quarter of 2003. This
increase was primarily the result of growth in the Company's main
business segments as well as currency effects. For the quarter,
income from continuing operations was $6.3 million compared to
$10.0 million in the third quarter of last year. Income figures for
both the current and prior-year quarters include one-time charges.
Third-quarter 2004 results include $13.7 million, or $9.5 million
net of taxes, of acquisition-related charges to cover purchased
in-process research and development. Third-quarter 2003 earnings
include $13.6 million, or $9.1 million net of taxes, in costs
associated with the refinancing of the Company's long-term debt.
Year-to-date, revenues from continuing operations grew by 8.4
percent to $782.1 million as compared to the same period last year.
Normalizing for the impact of currency effects, growth was 2.5
percent. Year-to-date gross margin was 56.5 percent compared to
56.9 percent over the same period of 2003. Earnings for the
nine-month period were $51.1 million, or $1.99 per share. Third
Quarter Highlights -- Overall net sales for the third quarter grew
by 7.0 percent to reach $258.8 million compared to $241.8 million
reported in the third quarter of 2003. On a currency-neutral basis,
revenues were up 3.1 percent versus third-quarter 2003 results. --
Both basic and diluted earnings per share from continuing
operations were $0.24 compared to basic earnings per share of $0.39
and diluted earnings per share of $0.38 in the same period of last
year. 2004 third quarter earnings include $13.7 million, or $9.5
million net of taxes, of one-time purchased in-process R&D
costs, while earnings in the same quarter of last year included
$13.6 million, or $9.1 million net of taxes, of one-time costs
associated with the refinancing of the Company's long-term debt. --
Life Science segment net sales for the quarter were $120.6 million,
7.6 percent higher than the comparable period last year. On a
currency neutral basis, segment sales grew by 3.5 percent for the
quarter. Performance in this segment was boosted by a product mix
skewing more toward reagents as well as by increased sales in
several product areas including multiplex array technology,
amplification and electrophoresis reagents, and gene transfer
technology. The segment also benefited from the addition of MJ
GeneWorks products for gene expression, an acquisition completed
during the quarter. The Life Science segment was negatively
impacted by the implementation of a new information technology
system which led to the creation of a temporary increased backlog
situation and a reduction in reported sales. The Company estimates
that approximately $5 million of Life Science sales were affected.
-- In August, the Company purchased MJ GeneWorks, Inc. and its
subsidiaries, including MJ Research, Inc., for approximately $31
million in cash and the assumption of certain liabilities of those
companies. Approximately $50 million of contingent liabilities were
recorded during the quarter in connection with the transaction. The
Company is continuing to assess the value of all acquired assets
and liabilities, including the contingent liabilities and will
adjust the carrying values as the final determinations are made.
The acquisition significantly enhances Bio-Rad's portfolio of gene
expression products. MJ Research pioneered the use of
Peltier-effect technology and has introduced a number of other
innovations in the thermal-cycling field. -- The Clinical
Diagnostics segment reported net sales of $136.4 million for the
quarter, up 6.9 percent compared to the third quarter of 2003, or
3.1 percent excluding currency effects. These results are due in
good measure to growth in the following areas: quality-control
management, diabetes monitoring and specialty microbiology. -- In
July, the Company introduced a revolutionary new immunoassay
platform, the BioPlex(TM) 2200. This is the first clinical
diagnostics system to offer multiplexing technology on a
fully-automated, fully- integrated random access platform. The
platform should improve the quality of testing, and aid
laboratories in their efforts to provide more efficient and cost
effective services. During the quarter, the Company also launched
its new D-10(TM) Dual Program for comprehensive hemoglobin testing.
The new state-of-the-art program will enable mid- sized
laboratories to upgrade their hemoglobinopathy testing services and
meet new College of American Pathologists (CAP) guidelines for
quantitative HbA2 beta-thalassemia testing. "Organic growth in our
core businesses, coupled with the expansion of our product lines
through recent product introductions and acquisitions enabled
Bio-Rad to make significant progress this quarter," said Norman
Schwartz, President and Chief Executive Officer. "We also have a
number of projects in the pipeline that should help us close out
the year successfully." Management will discuss these results in a
conference call at 2:00 p.m. PT (5:00 p.m. ET) November 4, 2004.
Interested parties can access the call by dialing 800-291-9234 (in
the U.S.), or 617-614-3923 (international), access number 27797197.
The live web cast can be accessed at http://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 14108693, for seven
days following the call and the web cast can be accessed at
http://www.bio-rad.com/ for 30 days. Bio-Rad Laboratories, Inc. is
a multinational manufacturer and distributor of life science
research products and clinical diagnostics. It is based in
Hercules, California, and serves more than 70,000 research and
industry customers worldwide through a network of more than 30
wholly owned subsidiary offices. Various statements made within
this press release may constitute "forward- looking statements" for
purposes of the Securities and Exchange Commission's "safe harbor"
provisions under the Private Securities Litigation Reform Act of
1995 and Rule 3b-6 under the Securities Exchange Act of 1934. The
forward- looking statements contained herein involve risks and
uncertainties that could cause results to differ materially from
the Company's expectations. Bio-Rad Laboratories, Inc. Third
Quarter 2004 Condensed Consolidated Statements of Income (In
thousands, except per share data) (UNAUDITED) Three Months, Ended
Nine Months, Ended September 30, September 30, 2004 2003 2004 2003
Net sales $258,849 $241,810 $782,144 $721,533 Cost of goods sold
116,036 106,818 340,406 310,803 Gross profit 142,813 134,992
441,738 410,730 Selling, general and administrative expense 90,183
78,218 267,439 230,487 Product research and development expense
26,581 23,024 76,459 65,625 Purchased in-process research and
development expense 13,720 -- 14,620 -- Interest expense 4,995
17,887 14,964 26,234 Foreign exchange losses, net 873 1,515 1,620
2,838 Other (income) expense, net (2,656) (527) (3,306) (2,011)
Income from continuing operations before taxes 9,117 14,875 69,942
87,557 Provision for income taxes 2,827 4,841 20,761 28,891 Income
from continuing operations 6,290 10,034 49,181 58,666 Discontinued
operations Discontinued operations (net of tax) -- (374) (1,487)
(1,686) Gain on divestiture (net of tax) -- -- 3,437 -- Total
discontinued operations -- (374) 1,950 (1,686) Net income $6,290
$9,660 $51,131 $56,980 Basic earnings per share Continuing
operations $0.24 $0.39 $1.91 $2.31 Discontinued operations --
(0.01) 0.08 (0.06) Net income $0.24 $0.38 $1.99 $2.25 Weighted
average common shares 25,753 25,468 25,692 25,380 Diluted earnings
per share Continuing operations $0.24 $0.38 $1.86 $2.23
Discontinued operations -- (0.01) 0.07 (0.06) Net income $0.24
$0.37 $1.93 $2.17 Adjusted weighted average shares 26,471 26,429
26,472 26,292 Bio-Rad Laboratories, Inc. Summary Condensed
Consolidated Balance Sheets (In thousands, except per share data)
(UNAUDITED) At September 30, At December 31, 2004 2003 Current
Assets: Cash and cash equivalents $125,154 $148,642 Accounts
receivable, net 228,186 234,085 Inventories, net 200,183 190,258
Prepaid expenses, taxes and other current assets 104,631 97,893
Total current assets 658,154 670,878 Net property, plant and
equipment 192,147 179,123 Goodwill, net 113,266 69,503 Other assets
128,803 67,354 Total assets $1,092,370 $986,858 Current
liabilities: Notes payable and current maturities of long-term debt
$8,457 $10,423 Accounts payable 55,524 53,995 Accrued payroll and
employee benefits 69,968 71,650 Sales, income and other taxes
payable 13,362 20,833 Other current liabilities 125,063 77,425
Total current liabilities 272,374 234,326 Long-term debt, net of
current maturities 226,009 225,835 Deferred tax liabilities 15,804
13,991 Other long-term liabilities 24,344 16,899 Stockholder's
equity 553,839 495,807 Total liabilities and stockholder's equity
$1,092,370 $986,858 Certain items have been reclassified to conform
to the current year presentation. Bio-Rad Laboratories, Inc.
Summary Condensed Consolidated Statement of Cash Flows (In
thousands, except per share data) (UNAUDITED) Nine Months Ended
September 30, 2004 2003 Cash flows from operating activities: Cash
received from customers $796,395 $737,855 Cash paid to suppliers
and employees (677,032) (585,582) Interest paid (18,922) (16,484)
Income tax payments (32,074) (44,544) Miscellaneous receipts 5,715
831 Discontinued operations (2,019) (2,512) Net cash provided by
operating activities 72,063 89,564 Cash flows from investing
activities: Capital expenditures, net (41,627) (47,671) Other
investing activities (48,202) (30,339) Net cash used in investing
activities (89,829) (78,010) Cash flows from financing activities:
Long-term borrowings -- 249,335 Payments on long-term debt (1,675)
(131,512) Other financing activities (4,830) (10,758) Net cash
provided by (used in) financing activities (6,505) 107,065 Effect
of exchange rate changes on cash 783 (5,604) Net increase
(decrease) in cash and cash equivalents (23,488) 113,015 Cash and
cash equivalents at beginning of period 148,642 27,733 Cash and
cash equivalents at end of period $125,154 $140,748 Reconciliation
of income from continuing operations to net cash provided by
operating activities: Income from continuing operations $49,181
$58,666 Adjustments to reconcile net income to net cash provided by
operating activities (net of effects of acquisitions): Depreciation
and amortization 36,731 31,156 Changes in working capital (19,655)
(29,831) Other 7,293 31,259 Discontinued operations (1,487) (1,686)
Net cash provided by operating activities $72,063 $89,564 Certain
items have been reclassified to conform to the current year
presentation. DATASOURCE: Bio-Rad Laboratories, Inc. CONTACT:
Christine Tsingos, Vice President and Chief Financial Officer, or
Ron Hutton, Treasurer, both of Bio-Rad Laboratories, Inc.,
+1-510-724-7000, or Web site: http://www.bio-rad.com/
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