BIO Bio Rad Laboratories Inc

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, 2017.

Third-quarter 2017 net sales were $535.0 million, an increase of 5.2 percent compared to $508.7 million reported for the third quarter of 2016. On a currency-neutral basis, quarterly net sales increased 3.4 percent compared to the same period last year.

The Life Science segment net sales in the third quarter of 2017 were $193.6 million, an increase of 8.7 percent compared to the same period last year. On a currency-neutral basis, Life Science segment sales increased 7.6 percent compared to the third quarter of 2016. Currency-neutral sales growth was primarily driven by sales of Droplet Digital PCR, food safety, and gene expression product lines, as well as sales from the recent acquisition of RainDance Technologies. This growth was somewhat offset by a decline in process chromatography media sales. The currency-neutral sales increase was reflected in all three major regions: Americas, Europe, and Asia Pacific.

Net sales for the Clinical Diagnostics segment in the third quarter of 2017 were $338.0 million, an increase of 3.3 percent compared to the third quarter of 2016. On a currency-neutral basis, sales increased 1.2 percent compared to the same period last year. The currency-neutral sales increase was primarily driven by increases in blood typing, immunology, and quality control product lines. Currency-neutral sales for the quarter reflected increases in Europe and Asia Pacific, partially offset by slowness in North America.

Net income for the third quarter of 2017 was $27.4 million, or $0.91 per share on a fully diluted basis, compared to $18.4 million, or $0.62 per share, during the third quarter of 2016. In addition to higher sales, net income for the third quarter of 2017 versus the same period last year was favorably impacted by a higher gross margin that increased to 56.9 percent versus 54.9 percent during the third quarter of 2016.

Net income for the third quarter of 2017 also benefitted from lower SG&A expense, which included a decrease in contingent consideration, professional services, and legal settlement expense. Net income was also somewhat offset by $8.4 million of additional expense associated with the closure of the GnuBIO research program.

“We are encouraged overall by our performance in the third quarter, which reflects growth of many of our key product lines and markets as well as an improved operating result for the quarter,” said Norman Schwartz, Bio-Rad President and Chief Executive Officer. “We are also pleased to report that during the third quarter we recovered a sizable amount of sales that were disrupted by our major ERP deployment in Western Europe during the second quarter, and we are now operating at a more normalized level,” he added.

The following table compares certain non-cash or non-recurring items from Q3 2017 to Q3 2016:

(in millions)

    Q3 2017       Q3 2016 Purchase accounting amortization COGS $4.9 $7.2 SG&A $ 2.4 $1.7 Acquisition-related expense R&D $3.0 - Contingent Consideration SG&A

<$3.0>

<$0.3>

Restructuring SG&A $0.8 - R&D $ 7.6 - Legal matters SG&A - $5.0 Total impact to operations $15.7 $13.6  

The effective income tax rate for the third quarter of 2017 was 29 percent, compared to 19 percent for the same quarter in 2016. The effective tax rate for the third quarter of 2017 included tax benefits related to share-based compensation. The lower tax rate during the third quarter of 2016 was primarily due to tax benefits related to additional foreign tax credits from foreign cash repatriations.

Year-to-date net sales increased 2.9 percent to $1.54 billion compared to $1.50 billion for the same period in 2016. Adjusting for the impact of currency, year-to-date net sales grew 2.7 percent.

Year-to-date net income for 2017 was $44.8 million, or $1.49 per share on a fully diluted basis, compared to $48.7 million, or $1.65 per share, reported during the same period in 2016.

Financial Outlook

For the fourth quarter 2017, the Company anticipates net sales to be between $615 to $625 million, which includes sales from the recently acquired RainDance Technologies, and assumes using current foreign exchange rates. Consolidated gross margin for the fourth quarter is anticipated to be between 54.5 and 55.0 percent which is in line with the year-to-date results. Based on this outlook, the operating margin for the fourth quarter 2017 is anticipated to be between 9.5 to 10.5 percent of sales.

“Our strong performance in the third quarter has paved the way for continued momentum for the fourth quarter, a nice way to exit the year,” Mr. Schwartz said. “Investments in our operations that notably impacted profitability over the past few years are beginning to contribute to our improved outlook in the near term and sets us on a path for growth and margin expansion in 2018 and beyond.”

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) November 2, 2017. Interested parties may access the call at 855-779-9068 within the U.S. or 631-485-4862 outside the U.S., Conference ID: 96703879. 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 8,350 people worldwide and had net sales exceeding $2 billion in 2016. 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 estimated future financial performance or results, the growth of our business, continued momentum for our performance in the fourth quarter, expectations regarding investments in our operations and for an improved outlook in the near term, realizing growth and margin expansion in 2018 and beyond, and our expectations regarding recently acquired businesses and regarding our products and our release of new products. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, “anticipate,” “believe,” “expect,” “assume,” “continue,” “may,” “will,” “intend,” “estimate,” 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, difficulties in implementing our global enterprise resource planning system, our ability to integrate acquired companies, products or technologies into our company successfully, our ability to compete effectively, foreign currency exchange fluctuations, recent and planned changes to our global organizational structure and executive management team, product quality and liability issues, international legal and regulatory risks, reductions in government funding or capital spending of our customers, 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, 2016, and its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2017 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.

  Bio-Rad Laboratories, Inc. Condensed Consolidated Statements of Income (in thousands, except per share data) (UNAUDITED)               Three Months Ended

September 30,

Nine Months Ended

September 30,

  2017     2016     2017     2016   Net sales $ 535,003 $ 508,745 $ 1,539,720 $ 1,496,719 Cost of goods sold   230,483     229,276     691,914     672,989   Gross profit 304,520 279,469 847,806 823,730   Selling, general and administrative expense 196,769 201,452 604,736 596,704 Research and development expense 61,372 49,924 173,483 148,321 lmpairment loss on long-lived asset   -     -     -     2,360   Income from operations 46,379 28,093 69,587 76,345   Interest expense 5,597 5,634 16,408 16,846 Foreign currency exchange losses, net 3,363 1,210 7,668 3,576 Other (income) expense, net   (1,436 )   (1,439 )   (14,611 )   (13,824 ) Income before income taxes 38,855 22,688 60,122 69,747   Provision for income taxes   (11,462 )   (4,283 )   (15,281 )   (21,052 ) Net income $ 27,393   $ 18,405   $ 44,841   $ 48,695     Basic earnings per share: Net income per basic share $ 0.92   $ 0.63   $ 1.51   $ 1.66     Weighted average common shares - basic   29,660     29,444     29,618     29,402     Diluted earnings per share: Net income per diluted share $ 0.91   $ 0.62   $ 1.49   $ 1.65     Weighted average common shares - diluted   30,052     29,671     29,994     29,592     Bio-Rad Laboratories, Inc. Condensed Consolidated Balance Sheets (In thousands)                 September 30, December 31, 2017 2016 (UNAUDITED) Current assets: Cash and cash equivalents $ 328,894 $ 456,264 Short-term investments 392,123 387,736 Accounts receivable, net 419,708 372,348 Inventories, net 601,571 524,961 Other current assets   150,155   103,215 Total current assets 1,892,451 1,844,524   Property, plant and equipment, net 500,687 488,614 Goodwill, net 520,706 477,115 Purchased intangibles, net 181,133 161,609 Other investments 1,032,801 830,790 Other assets   57,950   47,852 Total assets $ 4,185,728 $ 3,850,504     Current liabilities: Accounts payable, accrued payroll and employee benefits $ 273,958 $ 296,473 Current maturities of long-term debt 452 334 Income and other taxes payable 30,983 28,124 Other current liabilities   161,063   146,391 Total current liabilities 466,456 471,322   Long-term debt, net of current maturities 434,475 434,186 Other long-term liabilities   436,350   358,237 Total liabilities 1,337,281 1,263,745     Total stockholders' equity   2,848,447   2,586,759 Total liabilities and stockholders' equity $ 4,185,728 $ 3,850,504   Bio-Rad Laboratories, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (UNAUDITED)          

Nine Months EndedSeptember 30,

  2017     2016     Cash flows from operating activities: Cash received from customers $ 1,518,919 $ 1,530,605 Cash paid to suppliers and employees (1,433,424 ) (1,365,548 ) Interest paid, net (10,572 ) (11,195 ) Income tax payments, net (39,821 ) (37,373 ) Other operating activities   (571 )   4,825   Net cash provided by operating activities 34,531 121,314   Cash flows from investing activities: Payments for acquisitions and long-term investments (74,874 ) (11,785 ) Other investing activities   (87,615 )   (151,972 ) Net cash used in investing activities (162,489 ) (163,757 )   Cash flows from financing activities: Payments on long-term borrowings (220 ) (231 ) Other financing activities   (3,015 )   6,422   Net cash (used in) provided by financing activities (3,235 ) 6,191   Effect of foreign exchange rate changes on cash   3,823     (3,358 )   Net decrease in cash and cash equivalents (127,370 ) (39,610 ) Cash and cash equivalents at beginning of period   456,264     457,549   Cash and cash equivalents at end of period $ 328,894   $ 417,939      

Reconciliation of net income provided by operating activities:

Net income $ 44,841 $ 48,695

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 106,051 110,156 Changes in working capital (144,939 ) (50,374 ) Other   28,578     12,837   Net cash provided by operating activities $ 34,531   $ 121,314  

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Investor & Financial Contacts:Bio-Rad Laboratories, Inc.Christine Tsingos, 510-724-7000Executive Vice President and Chief Financial Officerinvestor_relations@bio-rad.comorRon Hutton, 510-724-7000Vice President and Treasurerinvestor_relations@bio-rad.com