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Bio-Rad Reports First-Quarter 2014 Financial Results

Companies mentioned in this article: Bio-Rad Laboratories

HERCULES, CA -- (Marketwired) -- 05/06/14 -- Bio-Rad Laboratories, Inc. (NYSE: BIO) (NYSE: BIO.B), a global manufacturer and distributor of life science research and clinical diagnostic products, announced financial results today for the first quarter ended March 31, 2014.

First-quarter reported revenues were $509.3 million, up 1.9% compared to $499.7 million reported for the first quarter of 2013. On a currency-neutral basis, quarterly revenues increased 2.9% compared to the same period last year. First-quarter 2014 gross margin was 54.0% compared to 54.3% during the same quarter last year.

Net income attributable to Bio-Rad for the first quarter of 2014 was $6.7 million, or $0.23 per share on a fully diluted basis compared to $20.2 million or $0.70 per share during the same period last year. The lower net income in the first quarter of 2014 versus the first quarter of 2013 reflected higher relative SG&A expenses primarily due to an accrued expense of $9.8 million during the first quarter of 2014 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, as well as higher information technology and employee-related expenses. Tax expense was skewed during the first quarters of 2013 and 2014 due to certain discrete items and the expiration of the U.S. research & development tax credit in 2014 versus the retroactive reinstatement of that credit in the first quarter of 2013. Cash flow was strong in the quarter, as cash provided by operations was $68.9 million versus $24.0 million in the same period last year. This strength was primarily due to an increase in customer collections, a decrease in interest paid resulting from the redemption of our 8% Senior Subordinated Notes, and a decrease in taxes paid.

"We are encouraged with sales results in the first quarter especially in emerging markets," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "Investments in acquired technologies and in systems will continue to moderate our profitability in the near term but should yield significant benefit to the company in the future."

Life Science
The Life Science segment net sales for the first quarter of 2014 were $161.5 million, up 3.3% compared to the same period last year. On a currency-neutral basis, Life Science segment sales increased 4.6% compared to the first quarter in 2013. Results from the first quarter benefitted from increased sales of Droplet Digital™ PCR, food science, and process chromatography products, as well as strength in the European and China markets. Growth of the Life Science segment during the first quarter of 2014 was offset by continued challenges in the research spending environment, particularly in the U.S.

Clinical Diagnostics
Net sales for the Clinical Diagnostics segment in the first quarter of 2014 were $344.3 million, an increase of 1.3% compared to the first quarter for 2013. On a currency-neutral basis, net sales were up 2.1% compared to the same period last year. Performance of the Clinical Diagnostics segment reflects modest growth across most product lines as well as strength in the Asia Pacific and Latin America markets.

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) May 6, 2014. Interested parties may access the call by dialing 800-299-9630 within the U.S. or 617-786-2904 outside the U.S., access number 16595168.

A live webcast of the conference call may be accessed in the Investor Relations section of our website at www.bio-rad.com. A replay of the call will be available at 888-286-8010 within the U.S. or 617-801-6888 outside the U.S., access number 44551012, 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 of www.bio-rad.com.

About Bio-Rad
Bio-Rad Laboratories, Inc. (NYSE: BIO) (NYSE: BIO.B) 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 over 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 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
                                                             March 31,
                                                       --------------------
                                                          2014       2013
                                                       ---------  ---------
Net sales                                              $ 509,344  $ 499,672
  Cost of goods sold                                     234,055    228,260
                                                       ---------  ---------
Gross profit                                             275,289    271,412

  Selling, general and administrative expense            202,275    185,917
  Research and development expense                        52,543     50,343
                                                       ---------  ---------
Income from operations                                    20,471     35,152

  Interest expense                                         3,857     10,977
  Foreign exchange losses, net                             2,737      1,528
  Other (income) expense, net                               (661)    (1,400)
                                                       ---------  ---------
Income before income taxes                                14,538     24,047

  Provision for income taxes                              (7,870)    (3,875)
                                                       ---------  ---------
Net income including noncontrolling interests              6,668     20,172

  Net income attributable to noncontrolling interests          -        (21)
                                                       ---------  ---------
Net income attributable to Bio-Rad                     $   6,668  $  20,151
                                                       =========  =========

Basic earnings per share:
  Net income per basic share attributable to Bio-Rad   $    0.23  $    0.71
                                                       =========  =========

  Weighted average common shares - basic                  28,791     28,494
                                                       =========  =========

Diluted earnings per share:
  Net income per diluted share attributable to Bio-Rad $    0.23  $    0.70
                                                       =========  =========

  Weighted average common shares - diluted                29,059     28,817
                                                       =========  =========



                         Bio-Rad Laboratories, Inc.
                    Condensed Consolidated Balance Sheets

                               (In thousands)

                                                   March 31,    December 31,
                                                      2014          2013
                                                 ------------- -------------
                                                  (UNAUDITED)
Current assets:
  Cash and cash equivalents                      $     364,507 $     331,551
  Short-term investments                               276,826       277,369
  Accounts receivable, net                             383,928       422,660
  Inventories, net                                     513,852       501,291
  Other current assets                                 227,697       214,985
                                                 ------------- -------------
    Total current assets                             1,766,810     1,747,856

Property, plant and equipment, net                     430,876       429,355
Goodwill, net                                          520,525       517,770
Purchased intangibles, net                             256,444       266,188
Other assets                                           466,723       427,621
                                                 ------------- -------------
      Total assets                               $   3,441,378 $   3,388,790
                                                 ============= =============

Current liabilities:
  Accounts payable                               $     130,864 $     148,510
  Accrued payroll and employee benefits                133,048       130,658
  Notes payable and current maturities of long-
   term debt                                             1,732         1,786
  Income and other taxes payable                        32,596        33,555
  Other current liabilities                            183,011       172,963
                                                 ------------- -------------
    Total current liabilities                          481,251       487,472

Long-term debt, net of current maturities              435,611       435,615
Other long-term liabilities                            291,913       278,981
                                                 ------------- -------------
      Total liabilities                              1,208,775     1,202,068

      Total stockholders' equity                     2,232,603     2,186,722
                                                 ------------- -------------
      Total liabilities and stockholders' equity $   3,441,378 $   3,388,790
                                                 ============= =============



                         Bio-Rad Laboratories, Inc.
              Condensed Consolidated Statements of Cash Flows

                               (In thousands)
                                (UNAUDITED)

                                                          Three Months
                                                         Ended March 31,

                                                        2014        2013
                                                     ----------  ----------

Cash flows from operating activities:
  Cash received from customers                       $  544,447  $  504,158
  Cash paid to suppliers and employees                 (468,101)   (460,093)
  Interest paid                                            (292)    (11,675)
  Income tax payments                                    (6,909)    (14,195)
  Other operating activities                               (224)      5,822
                                                     ----------  ----------
  Net cash provided by operating activities              68,921      24,017
                                                     ----------  ----------


Cash flows from investing activities:
  Payment for acquisitions and long-term investments     (1,364)    (64,056)
  Other investing activities                            (37,557)    (44,226)
                                                     ----------  ----------
  Net cash used in investing activities                 (38,921)   (108,282)
                                                     ----------  ----------

Cash flows from financing activities:
  Payments on long-term debt                                (66)        (74)
  Other financing activities                              3,556      (7,352)
                                                     ----------  ----------
  Net cash provided by (used in) financing
   activities                                             3,490      (7,426)
                                                     ----------  ----------

Effect of foreign exchange rate changes on cash            (534)     (3,068)
                                                     ----------  ----------

Net increase (decrease) in cash and cash equivalents     32,956     (94,759)
Cash and cash equivalents at beginning of period        331,551     463,388
                                                     ----------  ----------
Cash and cash equivalents at end of period           $  364,507  $  368,629
                                                     ==========  ==========


Reconciliation of net income including
 noncontrolling interests to net cash provided by
 operating activities:

Net income including noncontrolling interests        $    6,668  $   20,172
Adjustments to reconcile net income including
 noncontrolling interests to net cash provided by
 operating activities:
    Depreciation and amortization                        36,671      33,290
    Changes in working capital                           25,689     (33,892)
    Other                                                  (107)      4,447
                                                     ----------  ----------
Net cash provided by operating activities            $   68,921  $   24,017
                                                     ==========  ==========



Contact:

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
Email Contact