EX-99.1 2 bio-8k2262015xex991.htm EXHIBIT 99.1 BIO-8K 2.26.2015-EX99.1


Exhibit 99.1
        
Press Release

Bio-Rad Reports Fourth-Quarter and Full-Year 2014 Financial Results

HERCULES, CA - February 26, 2015 - Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb), a global provider of life science research and clinical diagnostic products, announced financial results today for the fourth quarter and fiscal year ended December 31, 2014.

Fourth-quarter 2014 reported revenues were $598.2 million, a decrease of 0.7% compared to $602.6 million reported for the fourth quarter of 2013. On a currency-neutral basis, quarterly revenues increased 4.6% compared to the same period in 2013. Fourth-quarter gross margin was 53.1% compared to 53.6% during the same quarter in 2013.

Net income for the fourth quarter of 2014 was $39.0 million, or $1.34 per share on a fully diluted basis, compared to $30.1 million, or $1.04 per share during the same period in 2013. Impacting the fourth quarter of 2014 was $11.4 million of expense associated with a product line discontinuation and $7.0 million reflecting the re-valuation of contingent consideration related to prior acquisitions. The fourth quarter of 2014 benefitted from no accrual of settlement costs associated with the United States Foreign Corrupt Practice Act (FCPA) matter, compared to the prior year quarter.

The effective tax rate for the fourth quarter of 2014 of 14.7% was significantly lower than the effective tax rate for the fourth quarter of 2013 of 32.3% mainly due to the reinstatement of the 2014 U.S. research & development tax credit and releases of valuation allowances and tax reserves.

For the full year of 2014, sales were $2,175.0 million compared to $2,132.7 million in 2013, an increase of 2.0%, or 3.3% on a currency neutral basis. Full-year gross margin was 54.2% compared to 55.3% reported in 2013. The net decline in gross margin is largely attributable to $11.6 million resulting from plant closures and product line discontinuations.

Full-year net income in 2014 was $88.8 million, or $3.05 per share on a fully diluted basis, compared to $77.8 million, or $2.69 per share in 2013. The change in net income was primarily due to a reduction of $18.7 million of annual interest expense in 2014 arising from the redemption of Senior Subordinated Notes in September 2013 and $15.0 million less in settlement costs associated with the FCPA matter. These items were offset in large part by the overall impact of $14.7 million from plant closures and product line discontinuations as well as additional investment associated with our April 2014 acquisition of GnuBIO.

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As announced previously, in the fourth quarter of 2014 the Company settled the previously disclosed investigations by the U.S. Department of Justice and the Securities and Exchange Commission in connection with the FCPA matter and paid approximately $55 million in resolution.

“In the absence of currency headwinds experienced in the latter part of the year, we are encouraged with our underlying performance in the fourth quarter and the entire year,” said Norman Schwartz, Bio-Rad President and Chief Executive Officer. “The year was one of progress on many fronts and we look forward to 2015.”

Life Science
The Life Science segment net sales for the fourth quarter were $223.7 million, up 1.5% compared to the same period in 2013. On a currency-neutral basis, Life Science segment sales increased by 6.3%. The sales increase during the quarter reflected growth in the segment’s core businesses, in particular, sales of gene expression and protein quantification products and the Company’s QX200™ Droplet Digital™ PCR system. During the quarter Bio-Rad introduced its S3e™ Cell Sorter, an enhanced system for cell analysis. Full-year reported revenues for the Life Science segment were $728.3 million, up 2.6% compared to the same period in 2013, or an increase of 4.0% on a currency-neutral basis.

Clinical Diagnostics
The Clinical Diagnostics segment reported net sales of $370.3 million for the fourth quarter, a decrease of 2.0% compared to the same period in 2013. On a currency-neutral basis, net sales were up 3.6%. Results from the fourth quarter reflected growth across most product lines, most notably immunology, quality controls, and diabetes products. During the fourth quarter, the Company announced that it had received Premarket Application approval from the U.S. Food and Drug Administration for the Company’s Geenius™ HIV 1/2 Supplemental Assay. The assay is a single-use test intended for use as an additional, more specific, test to confirm the presence of and differentiate antibodies to HIV Types 1 and 2. Full-year reported revenues for the Clinical Diagnostics segment were $1,432.3 million, up 1.7% compared to the same period in 2013. On a currency-neutral basis, full-year sales increased 2.9% compared to 2013.

2014 Full-Year Highlights
•
Full-year, sales were $2,175.0 million compared to $2,132.7 million in 2013. After normalizing for the impact of currency effects, full year revenues increased 3.3%.
•
Year-over-year net income was $88.8 million, or $3.05 per share on a fully diluted basis, compared to $77.8 million, or $2.69 per share in 2013.
•
In April, Bio-Rad purchased GnuBIO, a droplet-based DNA sequencing technology that is intended to integrate workflow for medical diagnostics.

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•
Also during the second 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 5th generation HIV test, and the BioPlex® Vitamin D kit. Both kits were launched in markets outside the U.S.
•
In September, Bio-Rad introduced ZOE™ Fluorescent Cell Imager, a digital imaging system that simplifies fluorescence imaging for cell culture applications.
•
During the fourth quarter Bio-Rad introduced the S3e Cell Sorter, a benchtop platform to improve cell research.
•
Also during the fourth quarter, Bio-Rad expanded its family of NGC™ Medium-Pressure Chromatography Systems launching the NGC Discover™ and NGC™ Discover Pro Systems.
•
In November, Bio-Rad received Premarket Application approval from the U.S. Food and Drug Administration for the Company’s Geenius HIV 1/2 Supplemental Assay.

Management will discuss these results in a conference call at 2 PM Pacific Standard Time (5 PM Eastern Standard Time) February 26, 2015. Interested parties may access the call at 866-700-6067 within the U.S. or 617-213-8834 outside the U.S., passcode 53419928. A live webcast of the conference call may be accessed on the "Investor Relations" section of www.bio-rad.com under “Quarterly Results.”

A replay of the call will be available at 888-286-8010 within the U.S. or 617-801-6888 outside the U.S., passcode 84461033 for seven days following the call. A webcast of the call will be archived on the Bio-Rad site for replay for up to a year and may be accessed under “Quarterly Results” in the "Investor Relations" section of our website.

About Bio-Rad
Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb) 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 more than 7,600 people worldwide and had revenues exceeding $2.1 billion in 2014. For more information, please 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

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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
510-724-7000
investor_relations@bio-rad.com


        
        


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Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)

 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2014
 
2013
 
2014
 
2013
Net sales
$
598,224

 
$
602,635

 
$
2,175,044

 
$
2,132,694

Cost of goods sold
280,814

 
279,886

 
996,527

 
954,216

Gross profit
317,410

 
322,749

 
1,178,517

 
1,178,478

Selling, general and administrative expense
207,537

 
214,584

 
808,200

 
798,070

Research and development expense
59,287

 
55,848

 
220,333

 
210,952

Income from operations
50,586

 
52,317

 
149,984

 
169,456

Interest expense
5,000

 
7,019

 
22,131

 
61,271

Foreign exchange losses, net
3,187

 
2,843

 
9,305

 
8,566

Other (income) expense, net
(3,347
)
 
(2,055
)
 
(13,009
)
 
(12,766
)
Income before income taxes
45,746

 
44,510

 
131,557

 
112,385

Provision for income taxes
(6,709
)
 
(14,374
)
 
(42,712
)
 
(34,574
)
Net income including noncontrolling interests 
39,037

 
30,136

 
88,845

 
77,811

Net income attributable to noncontrolling interests
—

 
—

 
—

 
(21
)
Net income attributable to Bio-Rad
$
39,037

 
$
30,136

 
$
88,845

 
$
77,790

 
 
 
 
 
 
 
 
Basic earnings per share:
 
 
 
 
 
 
 
Net income per basic share attributable to Bio-Rad
$
1.35

 
$
1.05

 
$
3.08

 
$
2.72

Weighted average common shares - basic
29,000

 
28,708

 
28,876

 
28,586

 
 
 
 
 
 
 
 
Diluted earnings per share:
 
 
 
 
 
 
 
Net income per diluted share attributable to Bio-Rad
$
1.34

 
$
1.04

 
$
3.05

 
$
2.69

Weighted average common shares - diluted
29,192

 
28,988

 
29,133

 
28,906


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Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)


 
December 31,
2014
 
December 31,
2013
Current assets:
 
 
 
Cash and cash equivalents
$
413,251

 
$
331,551

Short-term investments
284,384

 
277,369

Accounts receivable, net
377,640

 
422,660

Inventories, net
470,997

 
516,245

Other current assets
170,095

 
209,654

Total current assets
1,716,367

 
1,757,479

 
 
 
 
Property, plant and equipment, net
428,836

 
414,401

Goodwill, net
500,441

 
517,770

Purchased intangibles, net
254,228

 
266,188

Other assets
441,406

 
432,952

Total assets
$
3,341,278

 
$
3,388,790

 
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
128,608

 
$
148,510

Accrued payroll and employee benefits
153,426

 
130,658

Notes payable and current maturities of long-term debt
265

 
1,786

Income and other taxes payable
35,165

 
33,555

Other current liabilities
129,297

 
172,963

Total current liabilities
446,761

 
487,472

 
 
 
 
Long-term debt, net of current maturities
435,710

 
435,615

Other long-term liabilities
273,652

 
278,981

Total liabilities
1,156,123

 
1,202,068

Total stockholders’ equity
2,185,155

 
2,186,722

 
 
 
 
Total liabilities and stockholders’ equity
$
3,341,278

 
$
3,388,790



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Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)


 
Year Ended
 
December 31,
 
2014
 
2013
Cash flows from operating activities:
 
 
 
Cash received from customers
$
2,162,520

 
$
2,090,030

Cash paid to suppliers and employees
(1,806,526
)
 
(1,804,028
)
Interest paid
(20,793
)
 
(61,233
)
Income tax payments
(28,939
)
 
(71,144
)
Settlement to the SEC and DOJ relating to the FCPA, including interest
(55,050
)
 
—

Other operating activities
22,100

 
15,511

Net cash provided by operating activities
273,312

 
169,136

Cash flows from investing activities:
 
 
 
Payments for acquisitions and long-term investments
(44,627
)
 
(72,054
)
Other investing activities
(145,884
)
 
72,973

Net cash (used in) provided by investing activities
(190,511
)
 
919

Cash flows from financing activities:
 
 
 
Payments on long-term borrowings
(253
)
 
(300,228
)
Other financing activities
11,942

 
(11,469
)
Net cash provided by (used in) financing activities
11,689

 
(311,697
)
Effect of foreign exchange rate changes on cash
(12,790
)
 
9,805

Net increase (decrease) in cash and cash equivalents
81,700

 
(131,837
)
Cash and cash equivalents at beginning of year
331,551

 
463,388

Cash and cash equivalents at end of year
$
413,251

 
$
331,551

Reconciliation of net income including noncontrolling interests to net cash provided by operating activities:
 
 
 
Net income including noncontrolling interests
$
88,845

 
$
77,811

Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
 
 
 
Depreciation and amortization
149,889

 
147,157

Changes in working capital
21,700

 
(72,950
)
Other
12,878

 
17,118

Net cash provided by operating activities
$
273,312

 
$
169,136


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