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
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171102006749/en/
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
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