Exhibit 99.1
Press Release
Bio-Rad Reports Third-Quarter Currency-Neutral Revenue
Growth of 9.1 Percent
HERCULES, Calif.-November 1, 2016-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 third quarter ended September 30, 2016.
Third-quarter reported revenues were $508.7 million, an increase of 8.3 percent compared to $470.0 million reported for the third quarter of 2015. On a currency-neutral basis, quarterly revenues increased 9.1 percent compared to the same period last year. Third-quarter gross margin was 54.9 percent compared to 56.1 percent during the same quarter in 2015. The year-over-year decrease in gross margin during the third quarter of 2016 compared to the same period last year was primarily due to product mix and increased instrument placements, as well as higher manufacturing and service costs.
Net income for the third quarter was $18.4 million, or $0.62 per share on a fully diluted basis, compared to $17.4 million, or $0.59 per share during the same period last year. Net income for the third quarter of 2016 reflects several items that increased SG&A expenses including costs associated with the continued implementation of our global ERP system and various legal matters. Research & development (R&D) expenses also increased during the third of quarter 2016 compared to the same period last year. The effective tax rate for the third quarter of 2016 was 19 percent, compared to the tax rate of 32 percent during the same period last year. The lower tax rate in 2016 was primarily due to adjustments related to U.S. federal taxes.
Year-to-date revenues were $1.50 billion, an increase of 3.3 percent compared to $1.45 billion reported in the first three quarters of 2015. Adjusting for the impact of currency, year-to-date revenue growth for the first nine months of 2016 was 5.2 percent.
Year-to-date net income for the first three quarters of 2016 was $48.7 million, or $1.65 per share on a fully diluted basis, compared to $63.6 million, or $2.17 per share reported during the same period in 2015. The year-over-year decrease in net income was primarily the result of lower margins, an increase in SG&A expenses including $9.5 million in restructuring costs coordinated with the implementation of our global ERP system, $10.1 million in costs associated with various legal matters, and an increase in R&D expense.
“We are pleased with a strong sales performance in the third quarter, in particular, our life science business, with nearly 20 percent currency-neutral growth,” said Norman Schwartz, Bio‑Rad President and Chief Executive Officer. “Continued investments in our operations have affected profitability for the first nine months of the year, but these investments are necessary to support our growth.”
Life Science
The Life Science segment net sales for the third quarter were $178.1 million, an increase of 18.4 percent compared to the same period last year. On a currency-neutral basis, the Life Science segment sales were up 19.3 percent compared to the third quarter of 2015. Results from the third quarter benefitted from increased sales of Droplet Digital™ PCR and process media products. Sales for the Life Science segment reflected growth across all regions. During the quarter Bio-Rad announced the launch of two residual DNA quantification (RDQ) kits designed for use with the Company’s Droplet Digital™ PCR Systems. The kits simplify the quantification of host-cell DNA (HCD) in process development, quality control, and biomanufacturing processes.
Clinical Diagnostics
Reported net sales for the Clinical Diagnostics segment in the third quarter were $327.1 million, an increase of 3.5 percent compared to the third quarter in 2015. On a currency-neutral basis, the Clinical Diagnostics segment sales increased 4.4 percent. Results from the second quarter reflected significant growth across several product lines, most notably clinical immunology, diabetes, and quality controls. Sales growth in North America and Asia Pacific was partially offset by markets in Western Europe and Japan. In August, the Company introduced Amplichek™ I quality control, one in a series of infectious disease controls that Bio-Rad has introduced for the molecular diagnostic testing market this year.
Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) November 1, 2016. Interested parties may access the call at 855-779-9068 within the U.S. or 631-485-4862 outside the U.S., conference ID: 93613814. You may also listen to the conference call live via a webcast that is available on the “Investor Relations” section of our website under “Quarterly Results” at www.bio‑rad.com. The webcast will be available for up to a year.
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 8,000 people worldwide and had revenues exceeding $2 billion in 2015. For more information, please visit www.bio-rad.com.
This release may be deemed to contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements we make regarding the growth of our business, our release of new products and future financial performance. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, “plan,” “believe,” “expect,” “anticipate,” “may,” “will,” “intend,” “estimate,” “continue,” or similar expressions or the negative of those terms or expressions, although not all forward-looking statements contain these words. 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. These risks and uncertainties include our ability to develop and market new or improved products, our ability to compete effectively, difficulties in implementing our global enterprise resource planning system, recent and planned changes to our global organizational structure and executive management team, foreign currency exchange fluctuations, international legal and regulatory risks, reductions in government funding or capital spending of our customers, our ability to integrate acquired companies, products or technologies into our company successfully, product quality and liability issues, supply chain issues, changes in the healthcare industry, global economic conditions, and natural disasters and other catastrophic events beyond our control. For further information regarding the Company's risks and uncertainties, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s public reports filed with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016 to be filed with the SEC. 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, Treasurer
510-724-7000
investor_relations@bio-rad.com
Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Net sales | $ | 508,745 |
| | $ | 469,961 |
| | $ | 1,496,719 |
| | $ | 1,448,884 |
|
| Cost of goods sold | 229,276 |
| | 206,509 |
| | 672,989 |
| | 635,729 |
|
| Gross profit | 279,469 |
| | 263,452 |
| | 823,730 |
| | 813,155 |
|
| Selling, general and administrative expense | 201,452 |
| | 187,445 |
| | 596,704 |
| | 568,845 |
|
| Research and development expense | 49,924 |
| | 43,336 |
| | 150,681 |
| | 137,085 |
|
| Income from operations | 28,093 |
| | 32,671 |
| | 76,345 |
| | 107,225 |
|
| Interest expense | 5,634 |
| | 5,822 |
| | 16,846 |
| | 15,658 |
|
| Foreign currency exchange losses, net | 1,210 |
| | 2,166 |
| | 3,576 |
| | 8,910 |
|
| Other (income) expense, net | (1,439 | ) | | (732 | ) | | (13,824 | ) | | (8,992 | ) |
| Income before income taxes | 22,688 |
| | 25,415 |
| | 69,747 |
| | 91,649 |
|
| Provision for income taxes | (4,283 | ) | | (8,045 | ) | | (21,052 | ) | | (28,038 | ) |
| Net income | $ | 18,405 |
| | $ | 17,370 |
| | $ | 48,695 |
| | $ | 63,611 |
|
| | | | | | | | |
| Basic earnings per share: | | | | | | | |
| Net income per basic share | $ | 0.63 |
| | $ | 0.59 |
| | $ | 1.66 |
| | $ | 2.18 |
|
| Weighted average common shares - basic | 29,444 |
| | 29,195 |
| | 29,402 |
| | 29,141 |
|
| | | | | | | | |
| Diluted earnings per share: | | | | | | | |
| Net income per diluted share | $ | 0.62 |
| | $ | 0.59 |
| | $ | 1.65 |
| | $ | 2.17 |
|
| Weighted average common shares - diluted | 29,671 |
| | 29,439 |
| | 29,592 |
| | 29,372 |
|
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
|
| | | | | | | |
| | September 30,
2016 | | December 31,
2015 |
| | (Unaudited) | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 417,939 |
| | $ | 457,549 |
|
| Short-term investments | 392,387 |
| | 332,928 |
|
| Accounts receivable, net | 367,662 |
| | 391,485 |
|
| Inventories, net | 556,358 |
| | 490,224 |
|
| Other current assets | 115,757 |
| | 105,410 |
|
| Total current assets | 1,850,103 |
| | 1,777,596 |
|
| | | | |
| Property, plant and equipment, net | 474,667 |
| | 437,690 |
|
| Goodwill, net | 506,573 |
| | 495,948 |
|
| Purchased intangibles, net | 220,904 |
| | 214,026 |
|
| Other investments | 903,658 |
| | 719,840 |
|
| Other assets | 63,821 |
| | 64,618 |
|
| Total assets | $ | 4,019,726 |
| | $ | 3,709,718 |
|
| | | | |
| Current liabilities: | | | |
| Accounts payable, accrued payroll and employee benefits | $ | 280,453 |
| | $ | 280,248 |
|
| Current maturities of long-term debt | 297 |
| | 298 |
|
| Income and other taxes payable | 22,274 |
| | 29,339 |
|
| Other current liabilities | 139,694 |
| | 131,466 |
|
| Total current liabilities | 442,718 |
| | 441,351 |
|
| | | | |
| Long-term debt, net of current maturities | 434,137 |
| | 433,883 |
|
| Other long-term liabilities | 440,180 |
| | 343,981 |
|
| Total liabilities | 1,317,035 |
| | 1,219,215 |
|
| | | | |
| Total stockholders’ equity | 2,702,691 |
| | 2,490,503 |
|
| Total liabilities and stockholders’ equity | $ | 4,019,726 |
| | $ | 3,709,718 |
|
Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
| | | | | | | |
| | Nine Months Ended |
| | September 30, |
| | 2016 | | 2015 |
| Cash flows from operating activities: | | | |
| Cash received from customers | $ | 1,530,605 |
| | $ | 1,443,672 |
|
| Cash paid to suppliers and employees | (1,365,548 | ) | | (1,278,255 | ) |
| Interest paid, net | (11,195 | ) | | (9,620 | ) |
| Income tax payments, net | (37,373 | ) | | (15,646 | ) |
| Other operating activities | 4,825 |
| | 10,107 |
|
| Net cash provided by operating activities | 121,314 |
| | 150,258 |
|
| Cash flows from investing activities: | | | |
| Payments for acquisition and long-term investment | (11,785 | ) | | (3,490 | ) |
| Other investing activities | (151,972 | ) | | (79,601 | ) |
| Net cash used in investing activities | (163,757 | ) | | (83,091 | ) |
| Cash flows from financing activities: | | | |
| Payments on long-term borrowings | (231 | ) | | (206 | ) |
| Other financing activities | 6,422 |
| | 5,059 |
|
| Net cash provided by financing activities | 6,191 |
| | 4,853 |
|
| Effect of foreign exchange rate changes on cash | (3,358 | ) | | 22,058 |
|
| Net (decrease) increase in cash and cash equivalents | (39,610 | ) | | 94,078 |
|
| Cash and cash equivalents at beginning of period | 457,549 |
| | 413,251 |
|
| Cash and cash equivalents at end of period | $ | 417,939 |
| | $ | 507,329 |
|
| | | | |
| Reconciliation of net income to net cash provided by operating activities: | | | |
| Net income | $ | 48,695 |
| | $ | 63,611 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 110,156 |
| | 97,970 |
|
| Changes in working capital | (50,374 | ) | | (15,364 | ) |
| Other | 12,837 |
| | 4,041 |
|
| Net cash provided by operating activities | $ | 121,314 |
| | $ | 150,258 |
|
