FOR IMMEDIATE RELEASE
Bio-Rad Laboratories Reports Third Quarter Financial Results
HERCULES, CA - November 4, 2004 - Bio-Rad Laboratories, Inc. (AMEX:
BIO and 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.
(more)
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Bio-Rad Reports Third Quarter 2004
Page 2
- - 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 BioPlexTM 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-10T 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.
For more information contact:
Christine Tsingos, Vice President and Chief Financial Officer, or
Ron Hutton, Treasurer
Bio-Rad Laboratories, Inc.
Phone: (510) 724-7000
E-mail: investor_relations@bio-rad.com
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Bio-Rad Laboratories, Inc.
Third Quarter 2004
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(UNAUDITED)
<table>
Three Months, Ended Nine Months, Ended
September 30, September 30,
2004 2003 2004 2003
----------------------- -----------------------
<s> <c> <c> <c> <c>
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
========= ========= ========= =========
</table>
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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.
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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.
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