10-K 1 r10k2003.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________ FORM 10-K __ | X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003 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) Delaware 94-1381833 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) 1000 Alfred Nobel Drive, Hercules, CA 94547 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (510)724-7000 Securities registered pursuant to Section 12(b) of the Act:
Market Value on Name of Each Exchange Shares Outstanding March 1, 2004 of Stocks Title of Each Class on Which Registered March 1, 2004 Held by Non-Affiliates ------------------- --------------------- ------------------ ------------------------ Class A Common Stock Par Value $0.0001 per share American Stock Exchange 20,800,252 $918,616,460 Class B Common Stock Par Value $0.0001 per share American Stock Exchange 4,850,140 $ 29,207,664
Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark 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 months (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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 126-2 of the Act). Yes X No____ Documents Incorporated by Reference Document Form 10-K Parts _________________________________________ ____________________ (1) Annual Report to Stockholders for the fiscal year ended December 31, 2003 (specified portions) I, II, IV (2) Definitive Proxy Statement to be mailed to stockholders in connection with the registrant's 2004 Annual Meeting of Stockholders (specified portions) III P A R T I ITEM 1. BUSINESS General Founded in 1957, Bio-Rad Laboratories, Inc. ("Bio-Rad" or the "Company") was initially engaged in the development and production of specialty chemicals used in biochemical, pharmaceutical and other life science research applications. In 1967, the Company entered the field of clinical diagnostics with the development of its first test kit based on separation techniques and materials developed for life science research. Recognizing that the fields of clinical diagnostics and life science research were evolving toward more automated techniques, Bio-Rad expanded into the field of analytical and measuring instrument systems through internal research and development efforts and acquisitions in the late 1970's and 1980's. As Bio-Rad broadened its product lines, it also expanded its geographical market. The Company has distribution channels in over thirty countries outside the United States through subsidiaries whose primary focus is customer service and product distribution. On October 1, 1999 Bio-Rad acquired the stock of Pasteur Sanofi Diagnostics (PSD) and the rights to certain ancillary assets for $210 million. PSD was founded by the Institut Pasteur to commercialize its diagnostic research, and holds certain exclusive licenses from the Institut Pasteur in the HIV and infectious disease diagnostic product market. PSD also expanded the geographic reach and market penetration for the Company's products particularly in Latin America, Africa and France. During 2000 and 2001, the Company sold substantially all of its analytical instruments product lines. These divestitures have allowed the Company to focus on its core segments of Life Science and Clinical Diagnostics. Bio-Rad manufactures and supplies the life science research, healthcare, analytical chemistry and other markets with a broad range of products and systems used to separate complex chemical and biological materials and to identify, analyze and purify their components. Description of Business Business Segments The Company operates in two industry segments designated as Life Science and Clinical Diagnostics. Each operates in both the United States and international markets. For a description of business and financial information on industry and geographic segments, see Note 15 on pages 27 through 29 of Exhibit 13.1, which is incorporated herein by reference. 1 Life Science Segment. Life science is the study of the characteristics, behavior, and structure of living organisms and their component systems. Life science researchers use a variety of products and systems-- including reagents, instruments, software and apparatus-- to advance the study of life processes, drug discovery, biotechnology and food pathogen testing, primarily within a laboratory setting. We focus on selected segments of the life science market-- proteomics, genomics and cell biology -- for which we estimate 2003 worldwide sales totaled approximately $3.8 billion. The primary technological applications that we supply to these segments consist of electrophoresis, image analysis, molecular detection, chromatography, gene transfer, sample preparation and amplification. The primary end-users in our sectors of the market are universities and medical schools, industrial research organizations, government agencies, pharmaceutical manufacturers, biotechnology researchers and food testing laboratories. Clinical Diagnostics Segment. The clinical diagnostics industry encompasses a broad array of technologies incorporated into a variety of tests used to detect, identify and quantify substances in blood or other bodily fluids and tissues. The test results are used as aids for medical diagnosis, detection, evaluation, monitoring and treatment of diseases and other medical conditions. The bulk of tests are performed in vitro (outside the body), while the remainder consist of in vivo ("in the body") tests. The most common type of in vitro tests are routine chemistry tests that measure important health parameters, such as glucose, cholesterol or sodium, as part of routine blood checks. Other diagnostic tests are more specialized and require more sophisticated equipment and materials than do routine tests. These specialized tests are also lower-volume and higher-priced than routine tests. We estimate that in 2003 the global clinical diagnostics market totaled approximately $23.5 billion. The primary end-users in the areas of the clinical diagnostics industry we target are hospital laboratories, reference laboratories, physician office laboratories, government agencies and other diagnostics manufacturers. Raw Materials and Components The Company utilizes a wide variety of chemicals, biological materials, electronic components, machined metal parts, optical parts, minicomputers and peripheral devices. Most of these materials and components are available from numerous sources and the Company has not experienced difficulty in securing adequate supplies. 2 Patents and Trademarks We own numerous U.S. and international patents and patent licenses. We believe, however, that our ability to develop and manufacture our products depends primarily on our knowledge, technology and special skills. Under several patent license agreements, we pay royalties on the sales of certain products. We view these patents and license agreements as valuable assets. Seasonal Operations and Backlog The Company's business is not inherently seasonal, however, the European custom of concentrating vacation during the summer months usually has had a negative impact on third quarter sales volume and operating income. For the most part, the Company operates in markets characterized by short lead times and the absence of significant backlogs. Management has concluded that backlog information is not material to the Company's business as a whole. Sales and Marketing Each of Bio-Rad's segments maintains a sales force to sell its products on a direct basis. Each sales force is technically trained in the disciplines associated with its products. Sales are also generated through direct mail advertising, exhibits at trade shows and technical meetings, telemarketing, the Company website and by extensive advertising in technical and trade publications. Sales and marketing efforts are augmented by technical service departments that assist customers in effective product utilization and in new product applications. Bio-Rad also produces and distributes technical literature and holds seminars for customers on the use of its products. Our customer base is broad and diversified. In 2003, no single customer accounted for more than 3% of our total net sales. Our sales are affected by certain external factors. For example, a number of our customers, particularly in the Life Science segment, are substantially dependent on government grants and research contracts for their funding. A significant reduction of government funding would have a detrimental effect on the results of this segment. The Company is the leading provider of BSE (Bovine Spongiform Encephalopathy or mad cow) tests throughout the world. Revenues from the sales of testing products for BSE within our Life Science segment represented approximately 11% and 12% of consolidated net revenue in 2003 and 2002, respectively. A large portion of the revenue for this product is from government agencies currently mandating the use of the test. Competition, pricing, changes in test standards, technology or a decrease in government demand could negatively impact the Company's future revenue from this product. Most of the Company's international sales are generated by wholly-owned subsidiaries and their branch offices in Australia, 3 Austria, Belgium, Brazil, Canada, the Czech Republic, Denmark, England, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Israel, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Norway, People's Republic of China, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan and Thailand. Certain of these subsidiaries also have manufacturing facilities. While Bio-Rad's international operations are subject to certain risks common to foreign operations in general, such as changes in governmental regulations, import restrictions and foreign exchange fluctuations, the Company's international operations are principally in developed nations, which the Company regards as presenting no significantly greater risks to its operations than are present in the United States. Competition Most markets served by our product groups are competitive. Our competitors range in size from start-ups to large multinational corporations. Reliable independent information on sales and market share of products produced by our competitors is not generally available. We believe, however, based on our own marketing information, that while some competitors are dominant with respect to certain individual products, no one company, including us, is dominant with respect to a material portion of any segment of our business. Because of the breadth of its product lines, Life Science does not face the same competitor for all of its products. Competitors in this market include Amersham Biosciences, Invitrogen, Qiagen, Zeiss, Olympus, Leica, Nikon and Applied Biosystems. We compete primarily based on meeting performance specifications. Competitors in the Clinical Diagnostics segment range in size from small private companies to large multinational corporations. We compete mainly in specific market niches and do not attempt to pursue the most competitive general diagnostics markets. We compete based on our technological ability to provide customers with very specific tests and believe we are usually a significant competitor within our market niche. Competitors include Abbott Laboratories, bioMerieux, Inc., Roche Diagnostics, BioChem Pharma, Inova, diaSorin and Medical Analysis Systems. Product Research and Development The Company conducts extensive product research and development activities in all areas of our business, employing approximately 550 people worldwide in these activities. Research and development have played a major role in Bio-Rad's growth and are expected to continue to do so in the future. Our research teams are continuously developing new products and new applications for existing products. In our development and testing of new products and applications, we consult with scientific and medical professionals at universities, hospitals and medical schools, and in industry. We spent approximately $94.3 million, $82.9 million and $76.5 million on research and development activities during the years ended December 31, 2003, 2002 and 2001 respectively. 4 Regulatory Matters The manufacturing, marketing and labeling of certain of our products (primarily diagnostic products) are subject to regulation in the United States by the Center for Devices and Radiological Health of the United States Food and Drug Administration (FDA) and in other jurisdictions by state and foreign government authorities. FDA regulations require that some new products have pre-marketing approval by the FDA and require certain products to be manufactured in accordance with "good manufacturing practices," to be extensively tested and to be properly labeled to disclose test results and performance claims and limitations. As a multinational manufacturer and distributor of sophisticated instrumentation equipment, we must meet a wide array of electromagnetic compatibility and safety compliance requirements to satisfy regulations in the United States, the European Community and other jurisdictions. The FDA must approve an export permit application before companies can market products outside the U.S. prior to the products' receipt of FDA approval. The requirements relating to testing and trials, product licensing, pricing and reimbursement vary widely among countries. Our operations are subject to federal, state, local and foreign environmental laws and regulations that govern such activities as emissions to air and discharges to water, as well as handling and disposal practices for solid, hazardous and medical wastes. In addition to environmental laws that regulate our operations, we are also subject to environmental laws and regulations that create liabilities and clean-up responsibility for spills, disposals or other releases of hazardous substances into the environment as a result of our operations or otherwise impacting real property that we own or operate. The environmental laws and regulations also subject us to claims by third parties for damages resulting from any spills, disposals or releases resulting from our operations or at any of our properties. Employees At December 31, 2003 Bio-Rad had approximately 4,800 full-time employees. Fewer than 10% of Bio-Rad's 2,200 U. S. employees are covered by a collective bargaining agreement which will expire on November 7, 2006. Many of Bio-Rad's non-U.S. full-time employees, especially in France, are covered by collective bargaining agreements. Bio-Rad considers its employee relations in general to be good. Available Information The Company files annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934. The public may read and copy any materials that the Company files with the SEC at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by 5 calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file electronically with the SEC. The public can obtain any documents that the Company files with the SEC at http://www.sec.gov. The Company's website address is www.bio-rad.com. The Company makes available, free of charge through its Internet website, its Form 10-K's, 10-Q's and 8-K's, and any amendments to these forms, as soon as reasonably practicable after filing with the SEC. ITEM 2. PROPERTIES We own our Corporate headquarters located in Hercules, California. The principal manufacturing and research locations for each segment are as follows: Approximate Segment Location Square Ftg. Owned/Leased Life Science Richmond, California 201,000 Owned/Leased Hercules, California 346,800 Owned/Leased Hemel Hempstead, England 102,000 Leased Milan, Italy 50,000 Leased Riom, France 24,000 Owned/Leased Clinical Diagnostics Hercules, California 135,000 Owned/Leased Irvine, California 185,900 Leased Greater Seattle, Washington 127,600 Owned/Leased Lille, France 182,000 Owned Paris, France 162,000 Leased Munich, Germany 55,000 Leased Nazareth-Eke, Belgium 30,000 Leased Most manufacturing and research facilities also house administration, sales and distribution activities. In addition, we lease office and warehouse facilities in a variety of locations around the world. The facilities are used principally for sales, service, distribution and administration for both segments. The Marnes la Coquette facility near Paris, France which served as the corporate headquarters for PSD, as well as a significant manufacturing and research facility has been renewed until December 31, 2005. The Company recently completed building additional facilities at its Northern California headquarters. Historically, adequate space to expand sales and distribution channels has been available and we have leased space as needed. 6 ITEM 3. LEGAL PROCEEDINGS Note 14, "Legal Proceedings," appearing on page 27 of the Exhibit 13.1 is incorporated herein by reference. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of the Company's security holders during the fourth quarter of the fiscal year covered by this report. P A R T II ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS Information Concerning Common Stock The Company's Class A and Class B Common Stock are listed on the American Stock Exchange with the symbols BIO and BIO.B, respectively. The following sets forth, for the periods indicated, the high and low prices for the Company's Class A and Class B Common Stock. Class A Class B High Low High Low 2003 Fourth Quarter 65.00 48.81 65.10 47.95 Third Quarter 62.50 48.52 63.00 50.00 Second Quarter 62.85 35.35 61.00 35.00 First Quarter 39.11 33.20 44.35 32.00 2002 Fourth Quarter 45.90 36.25 44.35 37.00 Third Quarter 45.99 34.90 45.00 36.00 Second Quarter 51.00 36.30 50.25 38.50 First Quarter 38.00 27.45 37.50 27.50 On March 1, 2004 the Company had 1,308 holders of record of Class A Common Stock and 208 holders of record of Class B Common Stock. Bio-Rad has never paid a cash dividend and has no present plans to pay cash dividends. ITEM 6. SELECTED FINANCIAL DATA The table headed "Summary of Operations and Selected Financial Data" appearing on page 1 of Exhibit 13.1 is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The section headed "Management's Discussion and Analysis of Results of Operations and Financial Condition" appearing on pages 34 through 44 of Exhibit 13.1 is incorporated herein by reference. 7 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The section headed "Financial Risk Management" appearing on page 44 of Exhibit 13.1 is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements and Notes thereto and the Reports of Independent Public Accountants appearing on pages 2 through 30 of Exhibit 13.1 are incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9a. CONTROLS AND PROCEDURES The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. These disclosure controls are also designed that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Management is also required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective to provide reasonable assurance that material information relating to the Company is made known to management, including the Chief Executive Officer and Chief Financial Officer, particularly during the period when our periodic reports are being prepared. 8 There has been no change in the Company's internal controls over financial reporting during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The sections labeled "Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" of the definitive Proxy Statement mailed to stockholders in connection with the 2004 Annual Meeting of Stockholders ("the 2004 Proxy Statement") are incorporated herein by reference. The Company's Board of Directors has determined that Philip L. Padou is an "audit committee financial expert," as defined in Item 401(h) of Regulation S-K. Mr. Padou is also an "independent" director, as determined in accordance with the independence standards set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, and Section 121A of the American Stock Exchange Company Guide. The Company has adopted a code of business ethics and conduct that applies to its principal executive officer, principal financial officer, principal accounting officer or controller and all other employees. The Company will provide a copy of the code of ethics to any person, without charge, upon request, by writing to the Company at "Bio-Rad Laboratories, Inc., Investor Relations, 1000 Alfred Nobel Drive, Hercules, CA 94547". ITEM 11. EXECUTIVE COMPENSATION The sections labeled "Executive Compensation and Other Information," "Compensation of Directors," "Compensation Committee Interlocks and Insider Participation," "Report of the Compensation Committee of the Board of Directors" and "Stock Performance Graph" of the 2004 Proxy Statement are incorporated herein by reference. 9 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The section labeled "Principal and Management Stockholders" of the 2004 Proxy Statement is incorporated herein by reference. (a) (b) (c) Number of Number of securities securities to be issued Weighted- remaining available upon exercise average for future issuance of exercise under equity outstanding price compensation plans Plan category options, of (excluding warrants and outstanding securities rights options, reflected in column warrants (a)) and rights Equity compensation plans approved by security holders (1) 1,582,915 $ 20.04 2,862,784 (2) Equity compensation plans not approved by stockholders -- -- -- ---------- ------- ---------- Total 1,582,915 $ 20.04 2,862,784 ========== ======= ========== (1) Consists of the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan, the 2003 Stock Option Plan and the Bio-Rad Laboratories, Inc. Amended and Restated 1988 Employee Stock Purchase Plan. (2) Consists of 918,545 shares available for issuance under the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan, 1,675,000 shares available under the 2003 Stock Option Plan and 269,239 shares available for issuance under the Bio-Rad Laboratories, Inc. Amended and Restated 1988 Employee Stock Purchase Plan. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The section labeled "Certain Relationships and Related Party Transactions" and "Compensation of Directors" of the 2004 Proxy Statement is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item is incorporated by reference to the section entitled "Report of the Audit Committee of the Board of Directors" of the 2004 Proxy Statement. 10 P A R T IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) 1. Index to Financial Statements The following Consolidated Financial Statements are included in Exhibit 13.1 and are incorporated herein by reference pursuant to Item 8: Page in Exhibit 13.1 Consolidated Balance Sheets at December 31, 2003 and 2002 2-3 Consolidated Statements of Income for each of the three years in the period ended December 31, 2003 4 Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2003 5 Consolidated Statements of Changes in Stockholders' Equity for each of the three years in the period ended December 31, 2003 6 Notes to Consolidated Financial Statements 7-30 Independent Auditors' Report 31-32 Report of Independent Public Accountants 33 2. Index to Financial Statement Schedule Page in Form 10-K Schedule II Valuation and Qualifying Accounts 12 Independent Auditors' Report on Supplemental Schedule 13 Report of Independent Public Accountants on Schedule II 14 All other financial statement schedules are omitted because they are not required or because the required information is included in the Consolidated Financial Statements or the Notes thereto. 3. Index to Exhibits The exhibits listed in the accompanying Index to Exhibits on pages 16 through 18 of this report are filed or incorporated by reference as part of this report. (b) Reports on Form 8-K None. 11 BIO-RAD LABORATORIES, INC,. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2003, 2002 and 2001 (In thousands) Reserve for doubtful accounts receivable Additions Balance at Charged to Balance Beginning Costs and at End of Year Expenses Deductions Other of Year 2003 . . . $12,122 $4,687 $(3,831) -- $12,978 ======= ====== ======= ===== ======= 2002 . . . $11,509 $2,857 $(2,244) -- $12,122 ======= ====== ======= ===== ======= 2001 . . . $10,255 $5,200 $(3,946) -- $11,509 ======= ====== ======= ===== ======= Valuation allowance for deferred tax asset Deductions Balance at Charged to Balance Beginning Costs and at End of Year Additions Expenses Other(A) of Year 2003 . . . . $12,867 $1,965 $ (432) -- $14,400 ======= ====== ======= ======= ======= 2002 . . . . $17,302 $1,241 $(2,342) $(3,334) $12,867 ======= ====== ======= ======= ======= 2001 . . . . $20,620 $4,959 $(2,793) $(5,484) $17,302 ======= ====== ======= ======= ======= (A) Valuation arising from the acquisition of PSD. 12 INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL SCHEDULE To the Board of Directors and Shareholders of Bio-Rad Laboratories, Inc. We have audited the consolidated financial statements of Bio-Rad Laboratories, Inc. and subsidiaries (the "Company") as of December 31, 2003 and 2002, and for the years then ended, and have issued our report thereon dated March 10, 2004 (which report expresses an unqualified opinion and includes explanatory paragraphs concerning the Company's change in it's method of accounting for goodwill and intangible assets and the application of procedures relating to certain disclosures and reclassifications of consolidated financial statement amounts related to the 2001 consolidated financial statements that were audited by other auditors who have ceased operations); such consolidated financial statements and report are included in the Company's 2003 Annual Report to the Shareholders and are incorporated herein by reference. Our audit also included the 2003 and 2002 consolidated financial statement schedule of the Company, listed in Item 15(a)2. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the consolidated 2003 and 2002 financial statement schedules, when considered in relation to the 2003 and 2002 basic consolidated financial statements taken as a whole, present fairly in all material respects, the information set forth therein. The financial statement schedules for the year ended December 31, 2001 were audited by other auditors who have ceased operations. Those auditors expressed an opinion, in their report dated February 4, 2002, (February 6, 2002, as to a subsequent event), that such 2001 financial statement schedules considered in relation to the 2001 basic financial statements taken as a whole (prior to the disclosures and reclassifications referred to above), presented fairly, in all material respects, the information set forth therein. /s/ DELOITTE & TOUCHE LLP San Francisco, California March 10, 2004 13 This report is a copy of the previously issued report covering 2001, 2000, and 1999. The predecessor auditors have not reissued their report. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE II To Bio-Rad Laboratories, Inc.: We have audited in accordance with auditing standards generally accepted in the United States, the consolidated financial statements included in Bio-Rad Laboratories, Inc.'s annual report to stockholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 4, 2002. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed in the index, Item 14(a)2, is the responsibility of the Company's management and is presented for the purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP San Francisco, California February 4, 2002 14 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BIO-RAD LABORATORIES, INC. By:/s/ Sanford S. Wadler --------------------- Sanford S. Wadler Secretary Date: March 12, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Principal Executive Officer: /s/ Norman Schwartz President and Director March 12, 2004 (Norman Schwartz) Principal Financial Officer Vice President, /s/ Christine A. Tsingos Chief Financial Officer March 12, 2004 (Christine A. Tsingos) Principal Accounting Officer: /s/ James R. Stark Corporate Controller March 12, 2004 (James R. Stark) Other Directors: /s/ James J. Bennett Director March 12, 2004 (James J. Bennett) /s/ Albert J. Hillman Director March 12, 2004 (Albert J. Hillman) /s/ Ruediger Naumann-Etienne Director March 12, 2004 (Ruediger Naumann-Etienne) /s/ Philip L. Padou Director March 12, 2004 (Philip L. Padou) /s/ Alice N. Schwartz Director March 12, 2004 (Alice N. Schwartz) /s/ David Schwartz Director March 12, 2004 (David Schwartz) 15 BIO-RAD LABORATORIES, INC. INDEX TO EXHIBITS ITEM 14(a)3 Exhibits 32.1 and 32.2 are furnished herewith and should not be deemed to be "filed under the Securities Exchange Act of 1934." Exhibit No. ---------- 3.1 Restated Certificate of Incorporation, as of February 8, 2002. (1) 3.2 Bylaws of the Registrant, as amended February 19, 1980. (2) 4.1 Credit Agreement dated as of September 9, 2003 among Bio-Rad Laboratories, Inc., the lenders, Bank One, N.A., as Administrative Agent, Wells Fargo Bank, N.A. And Union Bank of California, N.A., as Syndication Agents and ABN AMRO Bank N.V. and BNP Paribas, as Documentation Agents. (3) 4.2 Pledge Amendment dated as of September 9, 2003 among Bio-Rad Laboratories, Inc., and Bank One, N.A., as contractual representative. (3) 4.3 Security Agreement dated as of September 9, 2003 among Bio- Rad Laboratories, Inc., as Grantor and Bank One N.A., as Administrative Agent. (3) 4.4 The Indenture dated as of August 11, 2003 for 7.50% Senior Subordinated Notes due 2013 among Bio-Rad Laboratories, Inc., as Issuer, and Wells Fargo Bank, N.A., as Trustee. (3) 4.5 The Exchange and Registration Rights Agreement dated as of August 11, 2003 for 7.50% Senior Subordinated Notes due 2013. (3) 10.4 1994 Stock Option Plan. (7) 10.4.1 Amendment to the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan dated April 28, 1998. (8) 10.4.2 Second Amendment to the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan dated December 6, 1999. (8) 10.4.3 Third Amendment to the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan dated September 19, 2000. (8) 10.4.4 Fourth Amendment to the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan dated April 25, 2001. 10.5 Amended and Restated 1988 Employee Stock Purchase Plan.(9) 10.5.1 Amendment to the Amended 1988 Employee Stock Purchase Plan. 16 10.6 Employees' Deferred Profit Sharing Retirement Plan (Amended and Restated effective January 1, 1997). (11) 10.7 2003 Stock Option Plan. (12) 10.10 Non-competition and employment continuation agreement with James J. Bennett. (11) 10.12 Split Dollar Life Insurance Agreement dated September 17, 1999 between the Schwartz Irrevocable Descendants Trust and Bio-Rad Laboratories, Inc. (4) 13.1 Excerpt from Annual Report to Stockholders' for the fiscal year ended December 31, 2003, (to be deemed filed only to the extent required by the instructions to exhibits for reports on Form 10-K). 21.1 Listing of Subsidiaries. 23.1 Consent of Independent Public Accountants. 31.1 Certification of Chief Executive Officer Required by Rule 13a(14(a) (17 CFR 240.13a-14(a)). 31.2 Certification of Chief Financial Officer Required by Rule 13a(14(a) (17 CFR 240.13a-14(a)). 32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. 32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ______________________________________________________________ (1) Incorporated by reference from Exhibits to the Company's Form 10-K filing for the fiscal year ended December 31, 2001, dated March 28, 2002. (2) Incorporated by reference from the Exhibits to the Company's Registration Statement on Form S-7 Registration No. 2-66797, which became effective April 22, 1980. (3) Incorporated by reference from Exhibits to the Company's Form S-4 dated September 19, 2003. (4) Incorporated by reference from the Exhibits to the Company's Form 10-K filing for the fiscal year ended December 31, 1999, dated March 28, 2000. (5) Incorporated by reference from Exhibits to the Company's September 30, 2002, Form 10-Q filing dated November 13, 2002. 17 (6) Incorporated by reference from Exhibits to the Company's June 30, 2000, Form 10-Q filing dated August 14, 2000. (7) Incorporated by reference from the Exhibits to the Company's Form S-8 filing, dated April 28, 1994. (8) Incorporated by reference from the Exhibits to the Company's Form 10-K filing for the fiscal year ended December 31, 2000, dated March 28, 2001. (9) Incorporated by reference from the Exhibits to the Company's September 30, 1998, Form 10-Q filing dated November 10, 1998. (10) Incorporated by reference from the Exhibits to the Company's September 30, 1997, Form 10-Q filing dated November 13, 1997. (11) Incorporated by reference from the Exhibits to the Company's Form 10-K filing for the fiscal year ended December 31, 1996, dated March 26, 1997. (12) Incorporated by reference from Exhibits to the Company's March 31, 2003, Form 10-Q filing dated May 13, 2003. 18