-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, pwvx3MtQeS2tX4ASyAZbz7D9duG95Ga8baVtfiw7HHZsYu5GopwqsresgXu3R1N/ 824vJvYpZuIOAEYt86VssQ== 0000012208-94-000007.txt : 19940513 0000012208-94-000007.hdr.sgml : 19940513 ACCESSION NUMBER: 0000012208-94-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIO RAD LABORATORIES INC CENTRAL INDEX KEY: 0000012208 STANDARD INDUSTRIAL CLASSIFICATION: 3826 IRS NUMBER: 941381833 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07928 FILM NUMBER: 94527680 BUSINESS ADDRESS: STREET 1: 1000 ALFRED NOBEL DR CITY: HERCULES STATE: CA ZIP: 94547 BUSINESS PHONE: 5107247000 10-Q 1 10-Q 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, 1994. 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 Former name, former address and former fiscal year, if changed since last year - NO CHANGE 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--
Shares Outstanding Title of each Class at April 30, 1994 Class A Common Stock, Par Value $1.00 per share 6,235,733 Class B Common Stock, Par Value $1.00 per share 1,836,529
PART I - FINANCIAL INFORMATION Item 1. Financial Statements. BIO-RAD LABORATORIES, INC. Condensed Consolidated Statements of Income (In thousands, except per share data)
Three Months Ended March 31, 1994 1993 NET SALES . . . . . . . . . . . . . . . . . . $ 89,657 $ 80,504 Cost of goods sold . . . . . . . . . . . . . 39,409 34,321 GROSS PROFIT . . . . . . . . . . . . . . . . 50,248 46,183 Selling, general and administrative expense . 31,715 32,564 Product research and development expense . . 7,349 8,626 INCOME FROM OPERATIONS . . . . . . . . . . . 11,184 4,993 Interest expense . . . . . . . . . . . . . . (1,704) (2,153) Investment income, net . . . . . . . . . . . 322 3,363 Other, net . . . . . . . . . . . . . . . . . (1,961) (794) INCOME BEFORE TAXES . . . . . . . . . . . . . 7,841 5,409 Provision for income taxes . . . . . . . . . 3,136 2,164 NET INCOME . . . . . . . . . . . . . . . . . $ 4,705 $ 3,245 ======== ======== Earnings per share . . . . . . . . . . . . . $0.58 $0.41 ======== ======== Weighted average common shares . . . . . . . 8,045 7,960 ======== ========
The accompanying notes are an integral part of these unaudited statements. 1 BIO-RAD LABORATORIES, INC. Condensed Consolidated Balance Sheets (In thousands, except share data)
March 31, December 31, 1994 1993 ASSETS: Cash and cash equivalents . . . . . . . . . . . . . . $ 5,662 $ 3,112 Accounts receivable . . . . . . . . . . . . . . . . . 81,857 75,768 Inventories . . . . . . . . . . . . . . . . . . . . . 70,997 72,114 Prepaid expenses, taxes and other current assets. . . 19,280 18,283 Total current assets . . . . . . . . . . . . . . . 177,796 169,277 Net property, plant and equipment . . . . . . . . . . 78,338 80,901 Marketable securities . . . . . . . . . . . . . . . . 4,998 4,111 Other assets . . . . . . . . . . . . . . . . . . . . 5,199 5,601 Total assets . . . . . . . . . . . . . . . . . . $ 266,331 $ 259,890 LIABILITIES AND STOCKHOLDERS' EQUITY: Notes payable and current maturities of long-term debt $ 25,622 $ 30,769 Accounts payable . . . . . . . . . . . . . . . . . . 14,046 14,691 Sales, income and other taxes payable . . . . . . . . 10,993 6,369 Other current liabilities . . . . . . . . . . . . . . 39,242 35,535 Total current liabilities . . . . . . . . . . . . 89,903 87,364 Long-term debt, net of current maturities . . . . . . 44,796 47,834 Deferred tax liabilities. . . . . . . . . . . . . . . 14,082 14,382 Total liabilities . . . . . . . . . . . . . . . . 148,781 149,580 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 - 6,216,164 at March 31, 1994 and 6,188,581 at December 31, 1993 . . . . . . . 6,216 6,189 Class B common stock, $1.00 par value, 6,000,000 shares authorized; outstanding - 1,836,529 at March 31, 1994 and 1,842,229 at December 31, 1993. . . . . . . . 1,837 1,842 Additional paid-in capital . . . . . . . . . . . . . . 18,343 18,179 Retained earnings . . . . . . . . . . . . . . . . . . 88,808 84,103 Currency translation . . . . . . . . . . . . . . . . 1,233 (3) Net unrealized holding gain on available-for-sale securities 1,113 -- Total stockholders' equity . . . . . . . . . . . . 117,550 110,310 Total liabilities and stockholders' equity . . $ 266,331 $ 259,890 ========= =========
The accompanying notes are an integral part of these unaudited statements. 2 BIO-RAD LABORATORIES, INC. Condensed Consolidated Statements of Cash Flows (In thousands)
Three Months Ended March 31, 1994 1993 Cash flows from operating activities: Cash received from customers . . . . . . . . . . . . $ 87,023 $ 77,573 Cash paid to suppliers and employees . . . . . . . . (70,857) (76,610) Interest paid. . . . . . . . . . . . . . . . . . . . (2,056) (2,461) Income tax receipts (payments) . . . . . . . . . . . 1,052 (781) Miscellaneous receipts (payments) . . . . . . . . . (156) 142 Net cash provided by (used in) operating activities. 15,006 (2,137) Cash flows from investing activities: Capital expenditures, net. . . . . . . . . . . . . . (1,716) (4,253) Marketable securities investment activity, net . . . 511 4,061 Foreign currency hedges, net . . . . . . . . . . . . (769) 1,110 Net cash provided by (used in) investing activities. (1,974) 918 Cash flows from financing activities: Net borrowings under line-of-credit arrangements. . (6,105) 1,117 Additions to long-term debt . . . . . . . . . . . . 13,800 20,088 Payments on long-term debt. . . . . . . . . . . . . (17,068) (19,586) Proceeds from issuance of common stock. . . . . . . 186 206 Net cash provided by (used in) financing activities (9,187) 1,825 Effect of exchange rate changes on cash . . . . . . . . . (1,295) 531 Net increase in cash and cash equivalents . . . . . . . . 2,550 1,137 Cash and cash equivalents at beginning of period. . . . . 3,112 2,686 Cash and cash equivalents at end of period. . . . . . . . $ 5,662 $ 3,823 ======== ======== Reconciliation of net income to net cash provided by operating activities: Net income . . . . . . . . . . . . . . . . . . . . . . $ 4,705 $ 3,245 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization . . . . . . . . . . 4,320 3,520 Foreign currency hedges, net . . . . . . . . . . . 1,524 89 Gains on dispositions of marketable securities . . (273) (3,328) Increase in accounts receivable . . . . . . . . . (3,380) (2,506) (Increase) decrease in inventories . . . . . . . . 2,690 (3,373) Increase in other current assets . . . . . . . . . (858) (1,406) Increase (decrease) in accounts payable and other current liabilities. . . . . . . . . . . . . . . 2,032 (26) Increase in income taxes payable . . . . . . . . . 4,188 645 Other. . . . . . . . . . . . . . . . . . . . . . . 58 1,003 Net cash provided by (used in) operating activities . . . $ 15,006 $ (2,137) ======== ========
The accompanying notes are an integral part of these unaudited statements. 3 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, 1993 (the Company's 1993 Annual Report). Certain amounts in the financial statements of the prior year have been reclassified to be consistent with the 1994 presentation. 2. INVENTORIES The principal components of inventories are as follows:
March 31, December 31, 1994 1993 (in thousands) Raw materials $ 21,948 $ 22,827 Work in process 19,354 18,607 Finished goods, net 29,695 30,680 $ 70,997 $ 72,114 ======== ========
3. PROPERTY, PLANT AND EQUIPMENT The principal components of property, plant and equipment are as follows:
March 31, December 31, 1994 1993 (in thousands) Land and improvements $ 8,057 $ 8,057 Buildings and leasehold improvements 49,756 50,599 Equipment 86,692 84,410 144,505 143,066 Less accumulated depreciation 66,167 62,165 Net property, plant and equipment $ 78,338 $ 80,901 ======== ========
4 4. MARKETABLE SECURITIES Bio-Rad adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", effective January 1, 1994. The Company's portfolio of marketable securities is classified as available-for-sale securities and net unrealized holding gains or losses are recorded as a separate component of stockholders' equity. The net unrealized holding gain at January 1, 1994 and March 31, 1994 was $1,572,000 and $1,113,000, respectively. 5 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, 1993. The following table shows operating income and expense items as a percentage of net sales:
Three Months Ended Year Ended March 31, December 31, 1994 1993 1993 Net sales 100.0 100.0 100.0 Cost of goods sold 44.0 42.6 46.0 Gross profit 56.0 57.4 54.0 Selling, general and administrative 35.3 40.5 39.3 Product research and development 8.2 10.7 10.4 Restructuring costs - - 1.2 Income from operations 12.5 6.2 3.1 ===== ===== =====
Three Months Ended March 31, 1994 Compared to Three Months Ended March 31, 1993 Corporate Results - Sales, Margins and Expenses Bio-Rad's net sales in the first quarter of 1994 reached a record $89.7 million up 11% from the $80.5 million reported in the first quarter of 1993. Although sales increased in all three segments of the Company's business, Life Science accounted for $7.8 million of the $9.2 million increase in sales. The increase in Life Science sales is attributed to increased instrument sales as products introduced in the past eighteen to twenty-four months are making an impact. (The confocal microscope product line has been reclassified to Life Science from Analytical Instruments. All prior period information has been restated for comparability.) Although instrument sales have increased, the Company's growth rates in certain business segments continue to be impeded by uncertainties in the international health care markets and 6 sluggish economies. Consolidated gross margins declined to 56.0% in the first quarter of 1994 from 57.4% in the first quarter of 1993 although they were higher than the 54.0% reported for the entire year of 1993. The decline in gross margins is principally attributed to a decline in Life Science margins related to the increase in sales of instruments which generally have lower gross margins than consumables. Gross margins were down slightly in Clinical Diagnostics and increased in Analytical Instruments. Both selling, general and administrative expense (SG&A) and product research and development expense (R&D) declined from the first quarter of 1993. Through improved expense control and an approximate 10% reduction in work force, all segments of the Company reduced SG&A and R&D costs both in absolute dollars and as a percentage of sales. Bio-Rad continues to be committed to long- term growth through R&D. Corporate Results - Non-Operating Items Net interest expense was $449,000 less in the first quarter of 1994 than the comparable period of 1993 principally as a result of lower average borrowings. Average borrowings in the first three months of 1994 were 21% less than average borrowings in the same period of 1993. Investment income for the first quarter of 1994 was $0.3 million compared to $3.4 million in the first quarter of 1993. Investment income in the first quarter of 1993 included a $3.1 million gain from sales of Escagenetics stock. The Company has sold substantially all of the Escagenetics stock acquired upon International Plant Research Institute's emergence from bankruptcy. Net other income and expense in the first quarter of 1994 includes non-operating legal costs and hedging costs related to foreign exchange exposures. Net other income and expense in the first quarter of 1993 was primarily hedging costs related to foreign exchange exposures and fixed asset dispositions. The Company's effective tax rate was constant at 40% for both 1994 and 1993. Financial Condition The Company's ongoing and principal capital requirement is for working capital to fund its growth in operations. At March 31, 1994, the Company had available $5.7 million in cash and cash equivalents and $48.0 million under its principal revolving credit agreement. In addition, Bio-Rad held marketable securities with a market value of $5.0 million, most of which could be readily 7 converted to cash. At March 31, 1994 consolidated net inventories decreased for the fourth consecutive quarter. Inventory levels peaked at $86.0 million at March 31, 1993 and have now been reduced 17%. Inventory control remains central to management's efforts to moderate capital growth requirements. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. At the annual meeting of the stockholders of Bio-Rad Laboratories, Inc. on April 26, 1994 the stockholders re-elected the Board of Directors and ratified proposals to amend the 1988 Employee Stock Purchase Plan (Purchase Plan) and to approve the 1994 Stock Option Plan (Option Plan). These proposals are described in subparts II and III of the Proxy Statement dated March 25, 1994, filed with the Securities and Exchange Commission and incorporated herein by this reference. The votes cast were as follows:
Purchase Plan Option Plan For 1,894,159 1,868,701 Against 30,567 56,115 Abstentions 7,466 7,376 Broker non-votes 171,959 171,959 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. 22.1 Proxy Statement dated March 25, 1994 (definitive form filed March 29, 1994 and incorporated by reference). (b) Reports on Form 8-K There were no reports on Form 8-K for the quarter ended March 31, 1994. 8 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 11, 1994 /s/ Thomas L. Braje Thomas L. Braje, Vice President, Chief Financial Officer Date: May 11, 1994 /s/ James R. Stark James R. Stark, Corporate Controller 9
EX-11 2 EXHIBIT 11 EXHIBIT 11.1 - COMPUTATION OF EARNINGS PER SHARE Bio-Rad Laboratories, Inc. (In thousands, except per share data)
Three Months Ended March 31, 1994 1993 Computation for Consolidated Statements of Income: Net income $ 4,705 $ 3,245 ======= ======= Weighted average common shares 8,045 7,960 ======= ======= Earnings per share $0.58 $0.41 ======= ======= Additional Primary Computation (1): Weighted average common shares per above 8,045 7,960 Add-Dilutive effect of outstanding options (as determined by the application of the treasury stock method) 6 0 Weighted average common shares, as adjusted 8,051 7,960 ======= ======= Primary earnings per share $0.58 $0.41 ======= ======= Fully Diluted Computation (1): Weighted average common shares per above 8,045 7,960 Add-Dilutive effect of outstanding options (as determined by the application of the treasury stock method) 8 0 Weighted average common shares, as adjusted 8,053 7,960 ======= ======= Fully diluted earnings per share $0.58 $0.41 ======= =======
[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%. -----END PRIVACY-ENHANCED MESSAGE-----