Full Press Release Details
Bio-Rad Reports Fourth-Quarter and Full-Year 2013 Financial Results
HERCULES, CA - February 27, 2014 - Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb), a global manufacturer and distributor of life science research and clinical diagnostic products, announced financial results today for the fourth quarter and fiscal year ended December 31, 2013.
Fourth-quarter 2013 reported revenues were $602.6 million, up 5.0% compared to $573.8 million reported for the fourth quarter of 2012. These results included $6.0 million of sales resulting from the Company's acquisition of AbD Serotec in January 2013. On a currency-neutral basis, quarterly revenues increased 5.7% compared to the same period in 2012. Fourth-quarter gross margin was 53.6% compared to 54.8% during the same quarter in 2012.
Net income for the fourth quarter of 2013 was $30.1 million, or $1.04 per share on a fully diluted basis, compared to $43.3 million, or $1.51 per share during the same period in 2012. These results included an accrued expense of $15 million in connection with the Company's efforts to resolve the previously disclosed investigation of the Company in connection with the United States Foreign Corrupt Practices Act; this is in addition to an accrued expense of $20 million in the third quarter of 2013.
For the full year of 2013, sales were $2,132.7 million compared to $2,069.2 million in 2012, an increase of 3.1%, or 3.9% on a currency neutral basis.
Full-year net income in 2013 was $77.8 million, or $2.69 per share on a fully diluted basis, compared to $165.5 million, or $5.78 per share in 2012. Full-year gross margin was 55.3% compared to 55.8% reported in 2012. The decrease in net income in 2013 was primarily due to higher SG&A expenses resulting from employee expenses associated with acquisitions; the $35 million legal accrual mentioned above, which includes $5 million in interest; and expenses associated with the enterprise resource planning (ERP) implementation. Also in 2013, interest expense increased primarily due to our decision to redeem certain bonds in the third quarter of 2013, which resulted in related expenses of $15.6 million.
In addition, certain events occurred during 2012 that favorably impacted results that year and include reductions in the valuation of the contingent consideration associated with the QuantaLife acquisition of $16.1 million, as well as higher "other income" resulting from certain investment gains.
"Even though 2013 results were negatively impacted by some one-time events, we are encouraged by the results in the fourth quarter, which reflect strength across many of our product lines," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "Our 2013 results were also tempered by continued investments in new products and systems that will provide the company greater operating leverage for the future."
The Life Science segment net sales for the fourth quarter were $220.5 million, up 8.0% compared to the same period in 2012. On a currency-neutral basis, Life Science segment sales increased by 9.4%. The sales increase during the quarter was primarily driven by sales of antibodies and reagents from the Company's acquisition of AbD Serotec, the QX200 Droplet Digital PCR (ddPCR) system, as well as other recently introduced products including the NGC family of chromatography systems and the S3 cell sorter. During the quarter Bio-Rad's installed base of ddPCR systems exceeded 500 units; the system has been featured in 75-peer-reviewed publications since it was first introduced. Full-year reported revenues for the Life Science segment were $710 million, up 3.1% compared to 2012, or an increase of 4.5% on a currency-neutral basis.
Clinical Diagnostics
The Clinical Diagnostics segment reported net sales of $377.9 million for the fourth quarter, up 3.3% compared to the same period in 2012. On a currency-neutral basis, net sales were up 3.6%. Performance in the Clinical Diagnostics segment in the fourth quarter reflected growth across all product lines, most notably the Company's quality controls, diabetes monitoring, and autoimmune testing products. Full-year reported revenues for the Clinical Diagnostics segment were $1,408.0 million, up 3.1% compared to the same period in 2012. On a currency-neutral basis, full-year sales increased 3.6% compared to 2012.
2013 Full-Year Highlights
In connection with the engagement of new auditors during the third quarter of 2013, the Company will delay the filing of its Form 10-K for the year ended December 31, 2013, to allow the newly appointed auditors adequate time to complete their procedures related to the Company's financials for 2013. Bio-Rad will file a Notification of Late Filing on Form 12b-25 with the Securities and Exchange Commission.
Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) February 27, 2014. Interested parties may access the call by dialing 866-314-5232 (in the U.S.) or 617-213-8052 (international), access number 92640314. 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 92261486, for seven days following the call. The webcast of the call will be archived on the Bio-Rad site for replay for up to a year and may be accessed in the "Investor Relations" section of www.bio rad.com.
Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb) designs, manufactures, and distributes 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 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 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.
Investor and Financial Contacts:
Bio-Rad Laboratories, Inc.
Christine Tsingos, Executive Vice President and Chief Financial Officer
Ron Hutton, Vice President and Treasurer
Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Net sales | $ | 602,635 | $ | 573,839 | $ | 2,132,694 | $ | 2,069,235 | |||||||
| Cost of goods sold | 279,886 | 259,293 | 954,216 | 914,077 | |||||||||||
| Gross profit | 322,749 | 314,546 | 1,178,478 | 1,155,158 | |||||||||||
| Selling, general and administrative expense | 214,584 | 188,865 | 798,070 | 681,778 | |||||||||||
| Research and development expense | 55,848 | 58,567 | 210,952 | 209,204 | |||||||||||
| Income from operations | 52,317 | 67,114 | 169,456 | 264,176 | |||||||||||
| Interest expense | 7,019 | 13,614 | 61,271 | 51,112 | |||||||||||
| Foreign exchange losses, net | 2,843 | 1,532 | 8,566 | 5,040 | |||||||||||
| Other (income) expense, net | (2,055 | ) | (7,191 | ) | (12,766 | ) | (21,883 | ) | |||||||
| Income before income taxes | 44,510 | 59,159 | 112,385 | 229,907 | |||||||||||
| Provision for income taxes | (14,374 | ) | (15,986 | ) | (34,574 | ) | (64,361 | ) | |||||||
| Net income including noncontrolling interests | 30,136 | 43,173 | 77,811 | 165,546 | |||||||||||
| Net loss (income) attributable to noncontrolling interests | - | 79 | (21 | ) | (69 | ) | |||||||||
| Net income attributable to Bio-Rad | $ | 30,136 | $ | 43,252 | $ | 77,790 | $ | 165,477 | |||||||
| Basic earnings per share: | |||||||||||||||
| Net income per basic share attributable to Bio-Rad | $ | 1.05 | $ | 1.52 | $ | 2.72 | $ | 5.85 | |||||||
| Weighted average common shares - basic | 28,708 | 28,394 | 28,586 | 28,290 | |||||||||||
| Diluted earnings per share: | |||||||||||||||
| Net income per diluted share attributable to Bio-Rad | $ | 1.04 | $ | 1.51 | $ | 2.69 | $ | 5.78 | |||||||
| Weighted average common shares - diluted | 28,988 | 28,712 | 28,906 | 28,642 |
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
| December 31, 2013 | December 31, 2012 | ||||||
| (Unaudited) | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 331,551 | $ | 463,388 | |||
| Short-term investments | 277,369 | 457,685 | |||||
| Accounts receivable, net | 422,660 | 398,739 | |||||
| Inventories, net | 501,291 | 455,120 | |||||
| Other current assets | 214,985 | 161,750 | |||||
| Total current assets | 1,747,856 | 1,936,682 | |||||
| Property, plant and equipment, net | 429,355 | 416,938 | |||||
| Goodwill, net | 517,770 | 495,418 | |||||
| Purchased intangibles, net | 266,188 | 260,939 | |||||
| Other assets | 427,621 | 333,526 | |||||
| Total assets | $ | 3,388,790 | $ | 3,443,503 | |||
| Current liabilities: | |||||||
| Accounts payable | $ | 148,510 | $ | 130,867 | |||
| Accrued payroll and employee benefits | 130,658 | 135,955 | |||||
| Notes payable and current maturities of long-term debt | 1,786 | 1,750 | |||||
| Income and other taxes payable | 33,555 | 34,779 | |||||
| Other current liabilities | 172,963 | 169,049 | |||||
| Total current liabilities | 487,472 | 472,400 | |||||
| Long-term debt, net of current maturities | 435,615 | 732,414 | |||||
| Other long-term liabilities | 278,981 | 223,149 | |||||
| Total liabilities | 1,202,068 | 1,427,963 | |||||
| Bio-Rad stockholders' equity | 2,186,722 | 2,015,005 | |||||
| Noncontrolling interests | - | 535 | |||||
| Total stockholders' equity | 2,186,722 | 2,015,540 | |||||
| Total liabilities and stockholders' equity | $ | 3,388,790 | $ | 3,443,503 |
Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Cash Flows
| Year Ended | |||||||
| December 31, | |||||||
| 2013 | 2012 | ||||||
| (Unaudited) | |||||||
| Cash flows from operating activities: | |||||||
| Cash received from customers | $ | 2,090,030 | $ | 2,063,805 | |||
| Cash paid to suppliers and employees | (1,797,688 | ) | (1,654,943 | ) | |||
| Interest paid | (61,233 | ) | (46,369 | ) | |||
| Income tax payments | (71,144 | ) | (93,697 | ) | |||
| Other operating activities | 15,511 | 7,232 | |||||
| Net cash provided by operating activities | 175,476 | 276,028 | |||||
| Cash flows from investing activities: | |||||||
| Payments for acquisitions and long-term investments | (72,054 | ) | (39,443 | ) | |||
| Other investing activities | 66,633 | (370,491 | ) | ||||
| Net cash used in investing activities | (5,421 | ) | (409,934 | ) | |||
| Cash flows from financing activities: | |||||||
| Payments on long-term borrowings | (300,228 | ) | (620 | ) | |||
| Other financing activities | (11,469 | ) | 13,208 | ||||
| Net cash (used in) provided by financing activities | (311,697 | ) | 12,588 | ||||
| Effect of foreign exchange rate changes on cash | 9,805 | 10,475 | |||||
| Net decrease in cash and cash equivalents | (131,837 | ) | (110,843 | ) | |||
| Cash and cash equivalents at beginning of year | 463,388 | 574,231 | |||||
| Cash and cash equivalents at end of year | $ | 331,551 | $ | 463,388 | |||
| Reconciliation of net income including noncontrolling interests to net cash provided by operating activities: | |||||||
| Net income including noncontrolling interests | $ | 77,811 | $ | 165,546 | |||
| Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 147,157 | 130,424 | |||||
| Changes in working capital | (66,610 | ) | (4,506 | ) | |||
| Other | 17,118 | (15,436 | ) | ||||
| Net cash provided by operating activities | $ | 175,476 | $ | 276,028 |