BIO-RAD LABORATORIES, INC. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - November 4, 2014

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Exhibit 99.1

Press Release


Bio-Rad Reports Third-Quarter 2014 Financial Results

HERCULES, CA - November 4, 2014 - Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb), a multinational manufacturer and distributor of life science research and clinical diagnostic products, announced financial results today for the third quarter ended September 30, 2014.

Third-quarter reported revenues were $530.6 million, an increase of 5.1% compared to $505.1 million reported for the third quarter of 2013. On a currency-neutral basis, quarterly revenues increased 4.3% compared to the same period last year. Third-quarter gross margin was 54.4%, compared to 56.3% during the same quarter in 2013. Gross margin during the quarter was negatively impacted by $3.1 million of expenses related to the closing and consolidation of some small manufacturing locations. Margins were also negatively affected by continued pricing pressures in the diagnostics markets.

Net income for the third quarter was $11.5 million, or $0.39 per share on a fully diluted basis, compared to a net loss of ($7.1) million, or ($0.25) per share during the same period last year. Net income for the third quarter of 2014 includes an incremental accrual of $12.1 million for the final settlement of the previously disclosed investigation in connection with the United States Foreign Corrupt Practices Act, which compares to an accrual of $20 million recorded in the same period last year. (On November 3, 2014, Bio‑Rad announced the resolution of investigations by the U.S. Department of Justice and Securities and Exchange Commission).

Year-to-date revenues were $1.58 billion, an increase of 3.1% compared to $1.53 billion reported in the first three quarters of 2013. Adjusting for the impact of currency, year-to-date revenue growth was 2.7%.

Year-to-date net income for the first three quarters of 2014 was $49.8 million, or $1.71 per share on a fully diluted basis, compared to $47.7 million, or $1.65 per share reported during the same period in 2013. The change in net income resulted primarily from the increase of sales, reduced interest expense, and a gain of $7.0 million reflecting the revaluation of contingent considerations for certain acquisitions. These results were somewhat offset by a higher effective tax rate.

Cash flow was strong for the first nine months ended September 30, 2014, compared to the same period last year, as cash provided by operations was $233.1 million in 2014 versus $98.6 million last year.

“We are encouraged with the third-quarter results, which reflect customer acceptance of many recently introduced products and buoyancy in some markets,” said Norman Schwartz, Bio‑Rad President and Chief Executive Officer.

Life Science
The Life Science segment net sales for the third quarter were $172.8 million, an increase of 6.1% compared to the same period last year. On a currency-neutral basis, the Life Science segment sales increased by 5.5% compared to the third quarter of 2013. Growth during the quarter was fueled by sales of the Company’s Droplet Digital™ PCR, cell biology and protein separations products. Sales for the Life Science segment were particularly strong in Europe and North America. In September, the Company introduced ZOE™ Fluorescent Cell Imager, a digital imaging system that simplifies fluorescence imaging for cell culture applications.



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Clinical Diagnostics
Reported net sales for the Clinical Diagnostics segment in the third quarter were $354.7 million, an increase of 4.7% compared to the third quarter in 2013. On a currency-neutral basis, the Clinical Diagnostics segment sales increased 3.9%. Results from the third quarter benefitted primarily from growth of immunohematology and autoimmune products. Sales for the Clinical Diagnostics segment reflected strength in Eastern Europe and Asia.

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) November 4, 2014. Interested parties may access the call at 866-383-8009 (in the U.S.) or 617-597-5342 (international), passcode 64852364.

A live webcast of the conference call may be accessed in the Investor Relations area 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), passcode: 34114260, 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 area of www.bio-rad.com.

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 7,800 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, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. 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




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

 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
Net sales
$
530,644

 
$
505,066

 
$
1,576,820

 
$
1,530,059

Cost of goods sold
242,068

 
220,850

 
715,713

 
674,330

Gross profit
288,576

 
284,216

 
861,107

 
855,729

Selling, general and administrative expense
202,550

 
202,238

 
600,663

 
583,486

Research and development expense
52,786

 
52,920

 
161,046

 
155,104

Income from operations
33,240

 
29,058

 
99,398

 
117,139

Interest expense
7,710

 
31,611

 
17,131

 
54,252

Foreign currency exchange losses, net
3,667

 
3,330

 
6,118

 
5,723

Other (income) expense, net
(613
)
 
(667
)
 
(9,662
)
 
(10,711
)
Income (loss) before income taxes
22,476

 
(5,216
)
 
85,811

 
67,875

Provision for income taxes
(10,967
)
 
(1,883
)
 
(36,003
)
 
(20,200
)
Net income (loss) including noncontrolling interests 
11,509

 
(7,099
)
 
49,808

 
47,675

Net income attributable to noncontrolling interests
—

 
—

 
—

 
(21
)
Net income (loss) attributable to Bio-Rad
$
11,509

 
$
(7,099
)
 
$
49,808

 
$
47,654

 
 
 
 
 
 
 
 
Basic earnings per share:
 
 
 
 
 
 
 
Net income (loss) per basic share attributable to
Bio-Rad
$
0.40

 
$
(0.25
)
 
$
1.73

 
$
1.67

Weighted average common shares - basic
28,884

 
28,603

 
28,834

 
28,545

 
 
 
 
 
 
 
 
Diluted earnings per share:
 
 
 
 
 
 
 
Net income (loss) per diluted share attributable to
Bio-Rad
$
0.39

 
$
(0.25
)
 
$
1.71

 
$
1.65

Weighted average common shares - diluted
29,141

 
28,603

 
29,097

 
28,870


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


 
September 30,
2014
 
December 31,
2013
 
 (Unaudited)
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
424,593

 
$
331,551

Short-term investments
277,985

 
277,369

Accounts receivable, net
354,401

 
422,660

Inventories, net
516,047

 
516,245

Other current assets
191,419

 
209,654

        Total current assets
1,764,445

 
1,757,479

 
 
 
 
Property, plant and equipment, net
420,897

 
414,401

Goodwill, net
513,454

 
517,770

Purchased intangibles, net
273,527

 
266,188

Other assets
413,701

 
432,952

Total assets
$
3,386,024

 
$
3,388,790

 
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
126,640

 
$
148,510

Accrued payroll and employee benefits
148,283

 
130,658

Notes payable and current maturities of long-term debt
1,471

 
1,786

Income and other taxes payable
24,399

 
33,555

Other current liabilities
202,990

 
172,963

        Total current liabilities
503,783

 
487,472

 
 
 
 
Long-term debt, net of current maturities
435,739

 
435,615

Other long-term liabilities
269,772

 
278,981

Total liabilities
1,209,294

 
1,202,068

 
 
 
 
Total stockholders’ equity
2,176,730

 
2,186,722

Total liabilities and stockholders’ equity
$
3,386,024

 
$
3,388,790



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

 
Nine Months Ended
 
September 30,
 
2014
 
2013
Cash flows from operating activities:
 
 
 
Cash received from customers
$
1,613,723

 
$
1,531,251

Cash paid to suppliers and employees
(1,352,654
)
 
(1,335,844
)
Interest paid
(10,757
)
 
(50,188
)
Income tax payments
(31,105
)
 
(59,720
)
Other operating activities
13,889

 
13,087

Net cash provided by operating activities
233,096

 
98,586

Cash flows from investing activities:
 
 
 
Payments for acquisitions and long-term investments
(43,645
)
 
(68,510
)
Other investing activities
(97,422
)
 
108,874

Net cash (used in) provided by investing activities
(141,067
)
 
40,364

Cash flows from financing activities:
 
 
 
Payments on long-term borrowings
(181
)
 
(300,178
)
Other financing activities
8,245

 
(15,287
)
Net cash provided by (used in) financing activities
8,064

 
(315,465
)
Effect of foreign exchange rate changes on cash
(7,051
)
 
4,920

Net increase (decrease) in cash and cash equivalents
93,042

 
(171,595
)
Cash and cash equivalents at beginning of period
331,551

 
463,388

Cash and cash equivalents at end of period
$
424,593

 
$
291,793

 
 
 
 
Reconciliation of net income including noncontrolling interests to net cash provided by operating activities:
 
 
 
Net income including noncontrolling interests
$
49,808

 
$
47,675

Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
 
 
 
Depreciation and amortization
110,129

 
105,181

Changes in working capital
61,772

 
(63,963
)
Other
11,387

 
9,693

Net cash provided by operating activities
$
233,096

 
$
98,586


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BIO-RAD LABORATORIES, INC. Reports