<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995.
OR
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________.
Commission file number 1-7928
BIO-RAD LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
A Delaware Corporation 94-1381833
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
1000 Alfred Nobel Drive, Hercules, California 94547
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 724-7000
Indicate by check whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 month (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date--
<TABLE>
<CAPTION>
Shares Outstanding
Title of each Class at April 30, 1995
<S> <C>
Class A Common Stock,
Par Value $1.00 per share 6,350,132
Class B Common Stock,
Par Value $1.00 per share 1,780,190
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
BIO-RAD LABORATORIES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
NET SALES . . . . . . . . . . . . . . . . . . $ 97,858 $ 89,657
Cost of goods sold . . . . . . . . . . . . . 41,817 39,409
GROSS PROFIT . . . . . . . . . . . . . . . . 56,041 50,248
Selling, general and administrative expense . 34,956 31,715
Product research and development expense . . 8,376 7,349
INCOME FROM OPERATIONS . . . . . . . . . . . 12,709 11,184
Interest expense . . . . . . . . . . . . . . (1,282) (1,704)
Investment income, net . . . . . . . . . . . 208 322
Other, net . . . . . . . . . . . . . . . . . (897) (1,961)
INCOME BEFORE TAXES . . . . . . . . . . . . . 10,738 7,841
Provision for income taxes . . . . . . . . . 2,685 3,136
NET INCOME . . . . . . . . . . . . . . . . . $ 8,053 $ 4,705
======== ========
Earnings per share . . . . . . . . . . . . . $0.99 $0.58
======== ========
Weighted average common shares . . . . . . . 8,113 8,045
======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited statements.
1
<PAGE>
BIO-RAD LABORATORIES, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . $ 5,917 $ 3,751
Accounts receivable . . . . . . . . . . . . . . . . . 92,452 81,714
Inventories . . . . . . . . . . . . . . . . . . . . . 80,447 73,339
Prepaid expenses, taxes and other current assets. . . 20,187 19,526
Total current assets . . . . . . . . . . . . . . . 199,003 178,330
Net property, plant and equipment . . . . . . . . . . 75,079 75,625
Marketable securities . . . . . . . . . . . . . . . . 4,871 4,743
Other assets . . . . . . . . . . . . . . . . . . . . 5,152 4,952
Total assets . . . . . . . . . . . . . . . . . . $ 284,105 $ 263,650
LIABILITIES AND STOCKHOLDERS' EQUITY:
Notes payable and current maturities of long-term debt $ 22,619 $ 21,593
Accounts payable . . . . . . . . . . . . . . . . . . 24,065 21,116
Accrued payroll and employee benefits . . . . . . . . 21,926 21,191
Sales, income and other taxes payable . . . . . . . . 9,196 6,377
Other current liabilities . . . . . . . . . . . . . . 24,037 19,601
Total current liabilities . . . . . . . . . . . . 101,843 89,878
Long-term debt, net of current maturities . . . . . . 25,392 26,287
Deferred tax liabilities . . . . . . . . . . . . . . 16,925 17,667
Total liabilities . . . . . . . . . . . . . . . . 144,160 133,832
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value, 2,300,000 shares
authorized; none outstanding . . . . . . . . . . . -- --
Class A common stock, $1.00 par value, 15,000,000 shares
authorized; outstanding - 6,334,018 at March 31, 1995
and 6,311,128 at December 31, 1994 . . . . . . . 6,334 6,311
Class B common stock, $1.00 par value, 6,000,000 shares
authorized; outstanding - 1,787,907 at March 31, 1995
and 1,794,999 at December 31, 1994. . . . . . . . 1,788 1,795
Additional paid-in capital . . . . . . . . . . . . . . 19,193 18,927
Retained earnings . . . . . . . . . . . . . . . . . . 107,754 99,701
Currency translation . . . . . . . . . . . . . . . . 4,396 2,566
Net unrealized holding gain on available-for-sale securities 480 518
Total stockholders' equity . . . . . . . . . . . . 139,945 129,818
Total liabilities and stockholders' equity . . $ 284,105 $ 263,650
========= =========
</TABLE>
The accompanying notes are an integral part of these unaudited statements.
2
<PAGE>
BIO-RAD LABORATORIES, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers . . . . . . . . . . . . $ 92,121 $ 87,023
Cash paid to suppliers and employees . . . . . . . . (81,696) (70,857)
Interest paid. . . . . . . . . . . . . . . . . . . . (1,232) (2,056)
Income tax receipts (payments) . . . . . . . . . . . (591) 1,052
Miscellaneous payments . . . . . . . . . . . . . . . (59) (156)
Net cash provided by operating activities. . . . . . 8,543 15,006
Cash flows from investing activities:
Capital expenditures, net. . . . . . . . . . . . . . (2,676) (1,716)
Marketable securities investment activity, net . . . (1) 511
Foreign currency hedges, net . . . . . . . . . . . . (464) (769)
Net cash used in investing activities. . . . . . . . (3,141) (1,974)
Cash flows from financing activities:
Net borrowings under line-of-credit arrangements. . (213) (6,105)
Additions to long-term debt . . . . . . . . . . . . 17,967 13,800
Payments on long-term debt. . . . . . . . . . . . . (19,084) (17,068)
Proceeds from issuance of common stock. . . . . . . 282 186
Net cash used in financing activities . . . . . . . (1,048) (9,187)
Effect of exchange rate changes on cash . . . . . . . . . (2,188) (1,295)
Net increase in cash and cash equivalents . . . . . . . . 2,166 2,550
Cash and cash equivalents at beginning of period. . . . . 3,751 3,112
Cash and cash equivalents at end of period. . . . . . . . $ 5,917 $ 5,662
======== ========
Reconciliation of net income to net cash provided by operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . $ 8,053 $ 4,705
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization. . . . . . . . . . . 4,181 4,320
Foreign currency hedges, net . . . . . . . . . . . 1,921 1,524
Gains on dispositions of marketable securities . . (143) (273)
Increase in accounts receivable. . . . . . . . . . (7,861) (3,380)
(Increase) decrease in inventories . . . . . . . . (4,465) 2,690
Increase in other current assets . . . . . . . . . (373) (858)
Increase in accounts payable and other
current liabilities. . . . . . . . . . . . . . . 5,385 2,032
Increase in income taxes payable . . . . . . . . . 2,088 4,188
Other. . . . . . . . . . . . . . . . . . . . . . . (243) 58
Net cash provided by operating activities . . . . . . . . $ 8,543 $ 15,006
======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited statements.
3
<PAGE>
BIO-RAD LABORATORIES, INC.
Notes to Condensed Consolidated Financial Statements
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements of Bio-Rad Laboratories, Inc. ("Bio-Rad" or the
"Company"), reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of the
interim periods presented. All such adjustments are of a normal
recurring nature. The condensed consolidated financial
statements should be read in conjunction with the notes to
consolidated financial statements contained in the Company's
Annual Report for the year ended December 31, 1994 (the Company's
1994 Annual Report). Certain amounts in the financial statements
of the prior year have been reclassified to be consistent with
the 1995 presentation.
2. INVENTORIES
<TABLE>
The principal components of inventories are as follows:
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
<S> <C> <C>
Raw materials $ 24,586 $ 23,713
Work in process 20,549 19,813
Finished goods, net 35,312 29,813
$ 80,447 $ 73,339
======== ========
</TABLE>
3. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
The principal components of property, plant and equipment are as
follows:
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
<S> <C> <C>
Land and improvements $ 8,057 $ 8,057
Buildings and leasehold
improvements 51,151 50,757
Equipment 94,550 91,600
153,758 150,414
Less accumulated depreciation 78,679 74,789
Net property, plant and equipment $ 75,079 $ 75,625
======== ========
</TABLE>
4
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition.
This discussion should be read in conjunction with the information
contained both in this report and in the Company's Consolidated
Financial Statements for the year ended December 31, 1994.
<TABLE>
The following table shows operating income and expense items as a
percentage of net sales:
<CAPTION>
Three Months Ended Year Ended
March 31, December 31,
1995 1994 1994
<S> <C> <C> <C>
Net sales 100.0 100.0 100.0
Cost of goods sold 42.7 44.0 43.9
Gross profit 57.3 56.0 56.1
Selling, general and
administrative 35.7 35.3 37.3
Product research and
development 8.6 8.2 8.5
Income from operations 13.0 12.5 10.3
===== ===== =====
</TABLE>
Three Months Ended March 31, 1995 Compared to
Three Months Ended March 31, 1994
Corporate Results - Sales, Margins and Expenses
Bio-Rad's net sales (sales) in the first quarter of 1995 reached
a record $97.9 million up 9% from the $89.7 million reported in
the first quarter of 1994. For the first quarter of 1995, the
effects of a weakened U.S. dollar account for approximately half
of the increase in consolidated sales compared to sales based on
1994 exchange rates. Compared to the first quarter of 1994,
sales increased 22% in Analytical Instruments, 8% in Life Science
and 6% in Clinical Diagnostics. Excluding the affects of the
weakened U.S. dollar, segment sales increased 17% in Analytical
Instruments, 3% in Life Science and 2% in Clinical Diagnostics.
The increase in Analytical Instruments sales is attributed to the
recent strength of the semiconductor instrument market. Life
Science growth was low compared to an extremely strong first
quarter in 1994 characterized by increased demand in Japan and
the Far East. The diagnostic market remains very competitive in
response to concerns regarding healthcare spending.
5
<PAGE>
Consolidated gross margins increased to 57.3% for the first quarter
of 1995 from 56.0% for the first quarter of 1994 and 56.1% reported
for the entire year of 1994. The increase in gross margin occurred
in all three segments and is principally attributed to the
aforementioned weakened dollar increasing the gross margin of
foreign sales. While the Company sells its products worldwide,
they are primarily manufactured in the United States.
Selling, general and administrative expense (SG&A) and product
research and development expense (R&D) increased from the first
quarter of 1994, both in absolute dollars and as a percent of
sales. SG&A, at 35.7% of sales, increased when compared to 35.3%
of sales for the first quarter of 1994 but decreased when compared
to 37.3% of sales for the entire year of 1994. The 0.4% increase
represents approximately $0.4 million, the majority of which was
spent in direct sales and sales support efforts. SG&A in the Life
Science and Clinical Diagnostics segments increased at a rate
slightly greater than the increase in sales while SG&A in the
Analytical Instruments segment increased at half the rate of the
increase in this segment's sales. Analytical Instruments is
characterized by long lead times in completing sales and SG&A can
fluctuate more significantly than in Life Science and Clinical
Diagnostics. Management continually monitors the growth in SG&A
spending in order to find ways to improve overall profitability by
reducing SG&A as a percent of sales. As planned, R&D was expanded
and spending increased in all segments as part of Bio-Rad's
continuing commitment to long-term growth.
Corporate Results - Non-Operating Items
Interest expense was $422,000 less in the first quarter of 1995
than the comparable period of 1994 principally as a result of lower
average borrowings. Average borrowings in the first three months
of 1995 were 36% less than average borrowings in the same period of
1994.
Net other income and expense in the first quarter of 1995 is
primarily non-operating legal costs. Net other income and expense
in the first quarter of 1994 included non-operating legal costs and
hedging costs related to foreign exchange exposures.
The Company's effective tax rate in the first quarter of 1995 was
25% compared to 40% for the first quarter of 1994 and 35% for the
year 1994. The lower effective tax rate is the result of changes
in the location of taxable income and fewer non-deductible expenses
and reserves. The tax rate reflects the utilization of foreign
loss carryforwards, foreign sales corporation benefits and foreign
tax credits. These benefits are expected to continue into 1996.
6
<PAGE>
Financial Condition
At March 31, 1995, the Company had available $5.9 million in cash
and cash equivalents and $55.7 million under its principal
revolving credit agreement. In addition, Bio-Rad held marketable
securities with a market value of $4.9 million, most of which could
be readily converted to cash. The Company is open to acquisition
opportunities to enhance growth. Future cash flows would be
affected should any of these opportunities result in an actual
acquisition. Available funds and cash flows from operations are
adequate to meet the Company's objectives for operations, research
and development, internal and external growth.
Net cash provided by operations was $8.5 million for the quarter
ended March 31, 1995 compared to $15.0 million for the comparable
quarter of 1994. Increases in accounts receivable and inventories
as described below account for the majority of the difference. For
the seventh consecutive quarter, cash provided by operations and
limited capital expenditures have allowed Bio-Rad to improve its
debt to equity ratio.
At March 31, 1995, consolidated accounts receivable were $10.7
million higher than at December 31, 1994. Approximately $3.6
million of the increase is attributed to increased sales in the
first quarter of 1995 when compared to the fourth quarter of 1994.
Approximately $2.9 million of the increase is attributed to the
weakened U.S. dollar. Additionally, the reorganization of the
Italian healthcare reimbursement system has temporarily slowed
payments until the administrative transition is complete. The
collection of accounts receivable is also slowed by increases in
the sales of instruments which historically have extended payment
terms.
At March 31, 1995 consolidated net inventories increased by $7.1
million from December 31, 1994. Approximately $2.6 million of the
increase is attributed to the weakened U.S. dollar. The remainder
is principally due to increases in Life Science instrumentation
production to lower back order levels and increases in Clinical
Diagnostics for anticipated growth. Inventory levels remain below
the peak of $86.0 million reported at March 31, 1993 and inventory
control remains central to management's efforts to moderate capital
growth requirements.
7
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The following documents are filed as part of this report:
Exhibit No.
11.1 Computation of Earnings Per Share.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
There were no reports on Form 8-K for the quarter ended March 31,
1995.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereto duly authorized.
BIO-RAD LABORATORIES, INC.
(Registrant)
Date: May 10, 1994 /s/ Thomas L. Braje
Thomas L. Braje, Vice President,
Chief Financial Officer
Date: May 10, 1994 /s/ James R. Stark
James R. Stark,
Corporate Controller
9
<PAGE>
EXHIBIT 11.1 - COMPUTATION OF EARNINGS PER SHARE
Bio-Rad Laboratories, Inc.
(In thousands, except per share data)
<TABLE>
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
Computation for Consolidated Statements of Income:
Net income $ 8,053 $ 4,705
======= =======
Weighted average common shares 8,113 8,045
======= =======
Earnings per share $0.99 $0.58
======= =======
Additional Primary Computation (1):
Weighted average common shares per above 8,113 8,045
Add-Dilutive effect of outstanding options
(as determined by the application of
the treasury stock method) 105 6
Weighted average common shares, as adjusted 8,218 8,051
======= =======
Primary earnings per share $0.98 $0.58
======= =======
Fully Diluted Computation (1):
Weighted average common shares per above 8,113 8,045
Add-Dilutive effect of outstanding options
(as determined by the application of
the treasury stock method) 114 8
Weighted average common shares, as adjusted 8,227 8,053
======= =======
Fully diluted earnings per share $0.98 $0.58
======= =======
</TABLE>
[FN]
(1) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted
from Bio-Rad Laboratories, Inc. Form 10-Q for the quarter ended
March 31, 1995 and is qualified in its entirety by reference
to such financial statements.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 5,917
<SECURITIES> 0
<RECEIVABLES> 92,452
<ALLOWANCES> 0
<INVENTORY> 80,447
<CURRENT-ASSETS> 199,003
<PP&E> 153,758
<DEPRECIATION> 78,679
<TOTAL-ASSETS> 284,105
<CURRENT-LIABILITIES> 101,843
<BONDS> 25,392
<COMMON> 8,122
0
0
<OTHER-SE> 131,823
<TOTAL-LIABILITY-AND-EQUITY> 284,105
<SALES> 97,858
<TOTAL-REVENUES> 97,858
<CGS> 41,817
<TOTAL-COSTS> 41,817
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,282
<INCOME-PRETAX> 10,738
<INCOME-TAX> 2,685
<INCOME-CONTINUING> 8,053
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,053
<EPS-PRIMARY> .99
<EPS-DILUTED> 0
</TABLE>
