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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Bio Rad Laboratories Inc | NYSE:BIO.B | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.42 | -0.15% | 279.49 | 279.49 | 279.49 | 279.49 | 5 | 20:02:10 |
|
(Mark One)
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
94-1381833
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
1000 Alfred Nobel Drive, Hercules, California
|
|
94547
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Yes
x
|
No
o
|
|
Yes
x
|
No
o
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
(Do not check if smaller reporting company)
|
Smaller reporting company
|
o
|
|
|
|
Emerging growth company
|
o
|
|
|
|
|
|
|
Yes
o
|
No
x
|
|
|
|
Title of Class
|
|
Shares Outstanding at May 1, 2018
|
Class A Common Stock, Par Value $0.0001 per share
|
|
24,701,407
|
Class B Common Stock, Par Value $0.0001 per share
|
|
5,103,283
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
ASSETS:
|
(Unaudited)
|
|
|
||||
Cash and cash equivalents
|
$
|
407,272
|
|
|
$
|
383,824
|
|
Short-term investments
|
355,661
|
|
|
371,154
|
|
||
Restricted investments
|
5,560
|
|
|
5,560
|
|
||
Accounts receivable, less allowance for doubtful accounts of $28,443 million at 2018 and $25,549 at 2017
|
430,361
|
|
|
464,847
|
|
||
Inventories:
|
|
|
|
||||
Raw materials
|
115,135
|
|
|
113,925
|
|
||
Work in process
|
142,935
|
|
|
142,589
|
|
||
Finished goods
|
354,147
|
|
|
338,290
|
|
||
Total inventories
|
612,217
|
|
|
594,804
|
|
||
Other current assets
|
166,045
|
|
|
156,460
|
|
||
Total current assets
|
1,977,116
|
|
|
1,976,649
|
|
||
Property, plant and equipment, at cost
|
1,320,930
|
|
|
1,305,150
|
|
||
Less: accumulated depreciation and amortization
|
(821,222
|
)
|
|
(811,654
|
)
|
||
Property, plant and equipment, net
|
499,708
|
|
|
493,496
|
|
||
Goodwill, net
|
510,359
|
|
|
506,069
|
|
||
Purchased intangibles, net
|
168,212
|
|
|
174,113
|
|
||
Other investments
|
2,981,768
|
|
|
1,027,736
|
|
||
Other assets
|
77,749
|
|
|
94,949
|
|
||
Total assets
|
$
|
6,214,912
|
|
|
$
|
4,273,012
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Accounts payable, accrued payroll and employee benefits
|
$
|
259,365
|
|
|
$
|
306,814
|
|
Current maturities of long-term debt and notes payable
|
369
|
|
|
420
|
|
||
Income and other taxes payable
|
42,377
|
|
|
39,941
|
|
||
Other current liabilities
|
154,087
|
|
|
155,521
|
|
||
Total current liabilities
|
456,198
|
|
|
502,696
|
|
||
Long-term debt, net of current maturities
|
434,678
|
|
|
434,581
|
|
||
Deferred income taxes
|
644,957
|
|
|
222,209
|
|
||
Other long-term liabilities
|
190,988
|
|
|
183,276
|
|
||
Total liabilities
|
1,726,821
|
|
|
1,342,762
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Class A common stock, shares issued 24,701,515 and 24,679,127 at 2018 and 2017, respectively; shares outstanding 24,700,933 and 24,678,545 at 2018 and 2017, respectively
|
2
|
|
|
2
|
|
||
Class B common stock, shares issued 5,104,674 and 5,107,674 at 2018 and 2017, respectively; shares outstanding 5,103,757 and 5,106,757 at 2018 and 2017, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
370,988
|
|
|
361,231
|
|
||
Class A treasury stock at cost, 582 shares at 2018 and 2017
|
(128
|
)
|
|
(128
|
)
|
||
Class B treasury stock at cost, 917 shares at 2018 and 2017
|
(89
|
)
|
|
(89
|
)
|
||
Retained earnings
|
4,013,232
|
|
|
1,830,439
|
|
||
Accumulated other comprehensive income
|
104,085
|
|
|
738,794
|
|
||
Total stockholders’ equity
|
4,488,091
|
|
|
2,930,250
|
|
||
Total liabilities and stockholders’ equity
|
$
|
6,214,912
|
|
|
$
|
4,273,012
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Net sales
|
$
|
551,519
|
|
|
$
|
500,051
|
|
Cost of goods sold
|
249,316
|
|
|
229,988
|
|
||
Gross profit
|
302,203
|
|
|
270,063
|
|
||
Selling, general and administrative expense
|
209,130
|
|
|
194,402
|
|
||
Research and development expense
|
49,427
|
|
|
49,452
|
|
||
Income from operations
|
43,646
|
|
|
26,209
|
|
||
Interest expense
|
5,782
|
|
|
5,316
|
|
||
Foreign currency exchange losses, net
|
1,254
|
|
|
1,789
|
|
||
Change in fair market value of equity securities
|
(815,934
|
)
|
|
—
|
|
||
Other (income) expense, net
|
(11,145
|
)
|
|
(1,043
|
)
|
||
Income before income taxes
|
863,689
|
|
|
20,147
|
|
||
Provision for income taxes
|
(206,915
|
)
|
|
(7,734
|
)
|
||
Net income
|
$
|
656,774
|
|
|
$
|
12,413
|
|
|
|
|
|
||||
Basic earnings per share:
|
|
|
|
||||
Net income per basic share
|
$
|
22.05
|
|
|
$
|
0.42
|
|
Weighted average common shares - basic
|
29,787
|
|
|
29,580
|
|
||
|
|
|
|
||||
Diluted earnings per share:
|
|
|
|
||||
Net income per diluted share
|
$
|
21.77
|
|
|
$
|
0.41
|
|
Weighted average common shares - diluted
|
30,171
|
|
|
29,911
|
|
|
Three Months Ended
|
|
||||||
|
March 31,
|
|
||||||
|
2018
|
|
2017
|
|
||||
Net income
|
$
|
656,774
|
|
|
$
|
12,413
|
|
|
Other comprehensive (loss) income:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
46,547
|
|
|
18,843
|
|
|
||
Foreign other post-employment benefits adjustments, net of income taxes
|
(283
|
)
|
|
(115
|
)
|
|
||
Net holding (loss) gain on equity securities and net unrealized holding (loss) gain on available-for-sale (AFS) investments, net of income taxes
|
(1,716
|
)
|
|
80,149
|
|
|
||
Other comprehensive (loss) income, net of income taxes
|
44,548
|
|
|
98,877
|
|
|
||
Comprehensive (loss) income
|
$
|
701,322
|
|
|
$
|
111,290
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Cash received from customers
|
$
|
589,869
|
|
|
$
|
508,982
|
|
Cash paid to suppliers and employees
|
(543,700
|
)
|
|
(550,289
|
)
|
||
Interest (paid) received, net
|
(378
|
)
|
|
54
|
|
||
Income tax payments, net
|
(3,245
|
)
|
|
(8,804
|
)
|
||
Investment proceeds and miscellaneous receipts, net
|
2,158
|
|
|
1,283
|
|
||
Payments for forward foreign exchange contracts, net
|
(4,358
|
)
|
|
(7,429
|
)
|
||
Net cash provided by (used in) operating activities
|
40,346
|
|
|
(56,203
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(27,184
|
)
|
|
(39,332
|
)
|
||
Proceeds from dispositions of property, plant and equipment
|
18
|
|
|
15
|
|
||
Proceeds from divestiture of a product line
|
6,919
|
|
|
—
|
|
||
Payments for acquisitions and long-term investments
|
—
|
|
|
(73,541
|
)
|
||
Payments for purchases of intangible assets
|
(3
|
)
|
|
—
|
|
||
Payments for purchases of marketable securities and investments
|
(61,443
|
)
|
|
(68,305
|
)
|
||
Proceeds from sales of marketable securities and investments
|
17,391
|
|
|
20,201
|
|
||
Proceeds from maturities of marketable securities and investments
|
45,486
|
|
|
50,570
|
|
||
Net cash used in investing activities
|
(18,816
|
)
|
|
(110,392
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net payments on line-of-credit arrangements and notes payable
|
—
|
|
|
(36
|
)
|
||
Payments on long-term borrowings
|
(87
|
)
|
|
(76
|
)
|
||
Payments of contingent consideration
|
(1,270
|
)
|
|
(3,105
|
)
|
||
Proceeds from issuances of common stock
|
3,872
|
|
|
3,890
|
|
||
Net cash provided by financing activities
|
2,515
|
|
|
673
|
|
||
Effect of foreign exchange rate changes on cash
|
(1,383
|
)
|
|
1,338
|
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
22,662
|
|
|
(164,584
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
384,983
|
|
|
457,171
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
407,645
|
|
|
$
|
292,587
|
|
|
March 31, 2018
|
|
March 31, 2017
|
||||
Cash and cash equivalents
|
$
|
407,272
|
|
|
$
|
291,663
|
|
Restricted cash included in Other current assets
|
90
|
|
|
505
|
|
||
Restricted cash included in Other assets
|
283
|
|
|
419
|
|
||
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statements of Cash Flows
|
$
|
407,645
|
|
|
$
|
292,587
|
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Europe
|
|
$
|
199.6
|
|
|
|
$
|
185.1
|
|
|
|
|
Pacific Rim
|
|
109.4
|
|
|
|
94.8
|
|
|
|
|
||
United States
|
|
209.9
|
|
|
|
187.3
|
|
|
|
|
||
Other (primarily Canada and Latin America)
|
|
32.6
|
|
|
|
32.9
|
|
|
|
|
||
Total Net sales
|
|
$
|
551.5
|
|
|
|
$
|
500.1
|
|
|
|
|
January 1, 2018
|
$
|
18.7
|
|
Provision for warranty
|
6.6
|
|
|
Actual warranty costs
|
(8.4
|
)
|
|
March 31, 2018
|
$
|
16.9
|
|
•
|
Level 1: Quoted prices in active markets for identical instruments
|
•
|
Level 2: Other significant observable inputs (including quoted prices in active markets for similar instruments)
|
•
|
Level 3: Significant unobservable inputs (including assumptions in determining the fair value of certain investments)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
53.9
|
|
|
$
|
—
|
|
|
$
|
53.9
|
|
Time deposits
|
36.2
|
|
|
10.0
|
|
|
—
|
|
|
46.2
|
|
||||
Money market funds
|
6.0
|
|
|
—
|
|
|
—
|
|
|
6.0
|
|
||||
Asset-backed securities
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
4.2
|
|
|
—
|
|
|
4.2
|
|
||||
Municipal obligations
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Total cash equivalents (a)
|
42.2
|
|
|
68.6
|
|
|
—
|
|
|
110.8
|
|
||||
Restricted investment
|
5.6
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
||||
Equity securities (b)
|
3,005.0
|
|
|
—
|
|
|
—
|
|
|
3,005.0
|
|
||||
Available-for-sale investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
—
|
|
|
172.9
|
|
|
—
|
|
|
172.9
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
65.2
|
|
|
—
|
|
|
65.2
|
|
||||
Foreign government obligations
|
—
|
|
|
3.8
|
|
|
—
|
|
|
3.8
|
|
||||
Municipal obligations
|
—
|
|
|
15.2
|
|
|
—
|
|
|
15.2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Asset-backed securities
|
—
|
|
|
55.2
|
|
|
—
|
|
|
55.2
|
|
||||
Total available-for-sale investments (c)
|
—
|
|
|
312.3
|
|
|
—
|
|
|
312.3
|
|
||||
Forward foreign exchange contracts (d)
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
||||
Total financial assets carried at fair value
|
$
|
3,052.8
|
|
|
$
|
382.2
|
|
|
$
|
—
|
|
|
$
|
3,435.0
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Forward foreign exchange contracts (e)
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
Contingent consideration (f)
|
—
|
|
|
—
|
|
|
13.3
|
|
|
13.3
|
|
||||
Total financial liabilities carried at fair value
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
13.3
|
|
|
$
|
14.3
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
36.0
|
|
|
$
|
—
|
|
|
$
|
36.0
|
|
Time deposits
|
43.7
|
|
|
10.0
|
|
|
—
|
|
|
53.7
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
11.2
|
|
|
—
|
|
|
11.2
|
|
||||
Money market funds
|
3.4
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
||||
Total cash equivalents (a)
|
47.1
|
|
|
57.2
|
|
|
—
|
|
|
104.3
|
|
||||
Restricted investment
|
5.6
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
||||
Available-for-sale investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
—
|
|
|
185.7
|
|
|
—
|
|
|
185.7
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
67.6
|
|
|
—
|
|
|
67.6
|
|
||||
Foreign government obligations
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
||||
Brokered certificates of deposit
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||
Municipal obligations
|
—
|
|
|
15.0
|
|
|
—
|
|
|
15.0
|
|
||||
Marketable equity securities
|
973.4
|
|
|
—
|
|
|
—
|
|
|
973.4
|
|
||||
Asset-backed securities
|
—
|
|
|
55.6
|
|
|
—
|
|
|
55.6
|
|
||||
Total available-for-sale investments (c)
|
973.4
|
|
|
328.0
|
|
|
—
|
|
|
1,301.4
|
|
||||
Forward foreign exchange contracts (d)
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||
Total financial assets carried at fair value
|
$
|
1,026.1
|
|
|
$
|
385.7
|
|
|
$
|
—
|
|
|
$
|
1,411.8
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Forward foreign exchange contracts (e)
|
$
|
—
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
1.6
|
|
Contingent consideration (f)
|
—
|
|
|
—
|
|
|
16.7
|
|
|
16.7
|
|
||||
Total financial liabilities carried at fair value
|
$
|
—
|
|
|
$
|
1.6
|
|
|
$
|
16.7
|
|
|
$
|
18.3
|
|
(a)
|
Cash equivalents are included in Cash and cash equivalents in the Condensed Consolidated Balance Sheets.
|
(b)
|
Equity securities are included in the following accounts in the Condensed Consolidated Balance Sheets (in millions):
|
|
March 31, 2018
|
||
Short-term investments
|
$
|
43.5
|
|
Other investments
|
2,961.5
|
|
|
Total
|
$
|
3,005.0
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Short-term investments
|
$
|
312.1
|
|
|
$
|
371.2
|
|
Other investments
|
0.2
|
|
|
930.2
|
|
||
Total
|
$
|
312.3
|
|
|
$
|
1,301.4
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Other current liabilities
|
$
|
3.2
|
|
|
$
|
2.7
|
|
Other long-term liabilities
|
10.1
|
|
|
14.0
|
|
||
Total
|
$
|
13.3
|
|
|
$
|
16.7
|
|
January 1, 2018
|
$
|
16.7
|
|
Analytical flow cytometer platform:
|
|
||
Payment of sales milestone
|
(1.3
|
)
|
|
Decrease in estimated fair value of contingent consideration included in Selling, general and administrative expense
|
(2.1
|
)
|
|
March 31, 2018
|
$
|
13.3
|
|
|
|
|
|
|
|
Valuation Technique
|
Unobservable Input
|
|
|
Analytical flow cytometer platform
|
Probability-weighted income approach
|
Sales milestones:
|
|
|
|
|
Discount rate
|
10.8
|
%
|
|
|
Cost of debt
|
4.6
|
%
|
|
|
|
|
|
March 31, 2018
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
174.1
|
|
|
$
|
0.1
|
|
|
$
|
(1.3
|
)
|
|
$
|
172.9
|
|
Municipal obligations
|
15.3
|
|
|
—
|
|
|
(0.1
|
)
|
|
15.2
|
|
||||
Asset-backed securities
|
55.4
|
|
|
—
|
|
|
(0.4
|
)
|
|
55.0
|
|
||||
U.S. government sponsored agencies
|
66.3
|
|
|
—
|
|
|
(1.1
|
)
|
|
65.2
|
|
||||
Foreign government obligations
|
3.8
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
||||
|
314.9
|
|
|
0.1
|
|
|
(2.9
|
)
|
|
312.1
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
Asset-backed securities
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Total
|
$
|
315.1
|
|
|
$
|
0.1
|
|
|
$
|
(2.9
|
)
|
|
$
|
312.3
|
|
|
Amortized
Cost
|
|
Estimated Fair
Value
|
||||
Mature in less than one year
|
$
|
123.1
|
|
|
$
|
122.9
|
|
Mature in one to five years
|
149.0
|
|
|
147.4
|
|
||
Mature in more than five years
|
43.0
|
|
|
42.0
|
|
||
Total
|
$
|
315.1
|
|
|
$
|
312.3
|
|
|
December 31, 2017
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
185.9
|
|
|
$
|
0.3
|
|
|
$
|
(0.5
|
)
|
|
$
|
185.7
|
|
Brokered certificates of deposit
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
||||
Municipal obligations
|
15.1
|
|
|
—
|
|
|
(0.1
|
)
|
|
15.0
|
|
||||
Asset-backed securities
|
55.6
|
|
|
—
|
|
|
(0.2
|
)
|
|
55.4
|
|
||||
U.S. government sponsored agencies
|
68.3
|
|
|
—
|
|
|
(0.7
|
)
|
|
67.6
|
|
||||
Foreign government obligations
|
3.4
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
||||
Marketable equity securities
|
34.4
|
|
|
9.0
|
|
|
—
|
|
|
43.4
|
|
||||
|
363.4
|
|
|
9.3
|
|
|
(1.5
|
)
|
|
371.2
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
Marketable equity securities
|
54.5
|
|
|
875.5
|
|
|
—
|
|
|
930.0
|
|
||||
Asset-backed securities
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
|
54.7
|
|
|
875.5
|
|
|
—
|
|
|
930.2
|
|
||||
Total
|
$
|
418.1
|
|
|
$
|
884.8
|
|
|
$
|
(1.5
|
)
|
|
$
|
1,301.4
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Fair value of investments in a loss position 12 months or more
|
$
|
42.6
|
|
|
$
|
43.9
|
|
Fair value of investments in a loss position less than 12 months
|
$
|
193.7
|
|
|
$
|
168.7
|
|
Gross unrealized losses for investments in a loss position 12 months or more
|
$
|
0.9
|
|
|
$
|
0.7
|
|
Gross unrealized losses for investments in a loss position less than 12 months
|
$
|
2.1
|
|
|
$
|
0.8
|
|
|
March 31,
|
||
|
2018
|
||
Contracts maturing in April through June 2018 to sell foreign currency:
|
|
||
Notional value
|
$
|
37.5
|
|
Unrealized loss
|
$
|
—
|
|
Contracts maturing in April through June 2018 to purchase foreign currency:
|
|
||
Notional value
|
$
|
355.3
|
|
Unrealized gain
|
$
|
0.1
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
|
Fair Value Hierarchy Level
|
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
|
Fair Value Hierarchy Level
|
||||||||
Other investments
|
—
|
|
|
—
|
|
|
|
|
$
|
91.8
|
|
|
$
|
1,249.4
|
|
|
2
|
||
Total long-term debt, excluding leases and current maturities
|
$
|
434.7
|
|
|
$
|
439.9
|
|
|
2
|
|
$
|
423.1
|
|
|
$
|
449.8
|
|
|
2
|
|
Life
Science
|
|
Clinical
Diagnostics
|
|
Total
|
||||||
Balances as of January 1, 2018:
|
|
|
|
|
|
||||||
Goodwill
|
$
|
234.7
|
|
|
$
|
324.6
|
|
|
$
|
559.3
|
|
Accumulated impairment losses
|
(35.9
|
)
|
|
(17.3
|
)
|
|
(53.2
|
)
|
|||
Goodwill, net
|
198.8
|
|
|
307.3
|
|
|
506.1
|
|
|||
|
|
|
|
|
|
||||||
Divestiture
|
—
|
|
|
(1.4
|
)
|
|
(1.4
|
)
|
|||
Currency fluctuations
|
0.1
|
|
|
5.6
|
|
|
5.7
|
|
|||
|
|
|
|
|
|
||||||
Balances as of March 31, 2018:
|
|
|
|
|
|
||||||
Goodwill
|
234.8
|
|
|
328.8
|
|
|
563.6
|
|
|||
Accumulated impairment losses
|
(35.9
|
)
|
|
(17.3
|
)
|
|
(53.2
|
)
|
|||
Goodwill, net
|
$
|
198.9
|
|
|
$
|
311.5
|
|
|
$
|
510.4
|
|
|
March 31, 2018
|
||||||||||||
|
Average
Remaining
Life (years)
|
|
Purchase
Price
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Customer relationships/lists
|
1-7
|
|
$
|
94.3
|
|
|
$
|
(67.5
|
)
|
|
$
|
26.8
|
|
Know how
|
1-8
|
|
197.5
|
|
|
(162.1
|
)
|
|
35.4
|
|
|||
Developed product technology
|
1-11
|
|
135.1
|
|
|
(73.9
|
)
|
|
61.2
|
|
|||
Licenses
|
1-11
|
|
77.0
|
|
|
(37.5
|
)
|
|
39.5
|
|
|||
Tradenames
|
1-6
|
|
4.1
|
|
|
(3.2
|
)
|
|
0.9
|
|
|||
Covenants not to compete
|
1-8
|
|
7.9
|
|
|
(3.5
|
)
|
|
4.4
|
|
|||
Total definite-lived intangible assets
|
|
|
$
|
515.9
|
|
|
$
|
(347.7
|
)
|
|
$
|
168.2
|
|
|
December 31, 2017
|
||||||||||||
|
Average
Remaining
Life (years)
|
|
Purchase
Price
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Customer relationships/lists
|
1-7
|
|
$
|
92.3
|
|
|
$
|
(64.4
|
)
|
|
$
|
27.9
|
|
Know how
|
1-8
|
|
194.9
|
|
|
(157.9
|
)
|
|
37.0
|
|
|||
Developed product technology
|
1-12
|
|
133.3
|
|
|
(70.3
|
)
|
|
63.0
|
|
|||
Licenses
|
1-12
|
|
76.7
|
|
|
(36.0
|
)
|
|
40.7
|
|
|||
Tradenames
|
1-6
|
|
3.9
|
|
|
(3.0
|
)
|
|
0.9
|
|
|||
Covenants not to compete
|
1-8
|
|
7.9
|
|
|
(3.3
|
)
|
|
4.6
|
|
|||
Total definite-lived intangible assets
|
|
|
$
|
509.0
|
|
|
$
|
(334.9
|
)
|
|
$
|
174.1
|
|
|
Three Months Ended
|
|
||||||
|
March 31,
|
|
||||||
|
2018
|
|
2017
|
|
||||
|
|
|
|
|
||||
Amortization expense
|
$
|
7.4
|
|
|
$
|
6.9
|
|
|
|
|||||||
|
Three Months Ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net income
|
$
|
656.8
|
|
|
$
|
12.4
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
34.3
|
|
|
33.7
|
|
||
Share-based compensation
|
5.9
|
|
|
5.4
|
|
||
Losses (gains) on dispositions of securities
|
0.2
|
|
|
(0.1
|
)
|
||
Changes in fair market value of equity securities
|
(815.9
|
)
|
|
—
|
|
||
Gain on divestiture of a product line
|
(5.1
|
)
|
|
—
|
|
||
Losses (gains) on dispositions of fixed assets
|
0.4
|
|
|
(0.1
|
)
|
||
Gain on sale of land
|
(4.1
|
)
|
|
—
|
|
||
Changes in fair value of contingent consideration
|
(2.1
|
)
|
|
(9.4
|
)
|
||
Decrease in accounts receivable
|
40.2
|
|
|
6.8
|
|
||
Increase in inventories
|
(16.9
|
)
|
|
(26.9
|
)
|
||
Increase in other current assets
|
(12.8
|
)
|
|
(19.1
|
)
|
||
Decrease in accounts payable and other current liabilities
|
(47.4
|
)
|
|
(61.2
|
)
|
||
Increase (decrease) in income taxes payable
|
11.5
|
|
|
(1.7
|
)
|
||
Increase (decrease) in deferred income taxes
|
184.5
|
|
|
(0.2
|
)
|
||
Net decrease/increase in other long-term assets/liabilities
|
10.8
|
|
|
4.2
|
|
||
Net cash provided by (used in) operating activities
|
$
|
40.3
|
|
|
$
|
(56.2
|
)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
4.875% Senior Notes due 2020 principal amount
|
$
|
425.0
|
|
|
$
|
425.0
|
|
Less unamortized discount and debt issuance costs
|
(1.8
|
)
|
|
(1.9
|
)
|
||
Long-term debt less unamortized discount and debt issuance costs
|
423.2
|
|
|
423.1
|
|
||
Capital leases and other debt
|
11.9
|
|
|
11.9
|
|
||
|
435.1
|
|
|
435.0
|
|
||
Less current maturities
|
(0.4
|
)
|
|
(0.4
|
)
|
||
Long-term debt
|
$
|
434.7
|
|
|
$
|
434.6
|
|
|
Foreign currency translation adjustments
|
Foreign other post-employment benefits adjustments
|
Net unrealized holding gains on available-for-sale investments
|
Total accumulated other comprehensive income
|
||||||||
Balances as of January 1, 2018*:
|
$
|
77.4
|
|
$
|
(22.3
|
)
|
$
|
4.5
|
|
$
|
59.6
|
|
Other comprehensive income (loss), before reclassifications
|
46.5
|
|
(0.7
|
)
|
(1.8
|
)
|
44.0
|
|
||||
Amounts reclassified from Accumulated other comprehensive income
|
—
|
|
0.3
|
|
0.1
|
|
0.4
|
|
||||
Income tax effects
|
—
|
|
0.1
|
|
—
|
|
0.1
|
|
||||
Other comprehensive income (loss), net of income taxes
|
46.5
|
|
(0.3
|
)
|
(1.7
|
)
|
44.5
|
|
||||
Balances as of March 31, 2018:
|
$
|
123.9
|
|
$
|
(22.6
|
)
|
$
|
2.8
|
|
$
|
104.1
|
|
|
Foreign currency translation adjustments
|
Foreign other post-employment benefits adjustments
|
Net unrealized holding gains on available-for-sale investments
|
Total accumulated other comprehensive income
|
||||||||
Balances as of January 1, 2017:
|
$
|
1.3
|
|
$
|
(18.6
|
)
|
$
|
435.0
|
|
$
|
417.7
|
|
Other comprehensive income (loss), before reclassifications
|
18.8
|
|
(0.3
|
)
|
127.1
|
|
145.6
|
|
||||
Amounts reclassified from Accumulated other comprehensive income
|
—
|
|
0.2
|
|
(0.2
|
)
|
—
|
|
||||
Income tax effects
|
—
|
|
—
|
|
(46.7
|
)
|
(46.7
|
)
|
||||
Other comprehensive income (loss), net of income taxes
|
18.8
|
|
(0.1
|
)
|
80.2
|
|
98.9
|
|
||||
Balances as of March 31, 2017:
|
$
|
20.1
|
|
$
|
(18.7
|
)
|
$
|
515.2
|
|
$
|
516.6
|
|
|
Income before taxes impact (in millions):
|
|
||||||||
|
|
Three Months Ended
|
|
|
||||||
|
|
March 31,
|
|
|
||||||
Components of Comprehensive income
|
|
2018
|
|
2017
|
|
Location
|
||||
Amortization of foreign other post-employment benefit items
|
|
$
|
(0.3
|
)
|
|
$
|
(0.2
|
)
|
|
Other (income) expense, net
|
Net holding (losses) gains on equity securities and available-for-sale investments
|
|
$
|
(0.1
|
)
|
|
$
|
0.2
|
|
|
Other (income) expense, net
|
|
Three Months Ended
|
|
||||
|
March 31,
|
|
||||
|
2018
|
|
2017
|
|
||
Basic weighted average shares outstanding
|
29,787
|
|
|
29,580
|
|
|
Effect of potentially dilutive stock options and restricted stock awards
|
384
|
|
|
331
|
|
|
Diluted weighted average common shares
|
30,171
|
|
|
29,911
|
|
|
Anti-dilutive shares
|
41
|
|
|
17
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Interest and investment income
|
$
|
(2.1
|
)
|
|
$
|
(1.1
|
)
|
Net realized loss (gain) on investments
|
0.1
|
|
|
(0.3
|
)
|
||
Gain on sale of land
|
(4.1
|
)
|
|
—
|
|
||
Gain on divestiture of product line
|
(5.1
|
)
|
|
—
|
|
||
Other expense
|
0.1
|
|
|
0.4
|
|
||
Other (income) expense, net
|
$
|
(11.1
|
)
|
|
$
|
(1.0
|
)
|
•
|
Our deferred tax assets and liabilities were measured at the enacted tax rate that will apply when these temporary differences are expected to be realized or settled.
|
•
|
The Tax Act imposes a Transition Tax payable over eight years. The Transition Tax is assessed on the U.S. shareholders’ share of certain foreign corporations’ accumulated untaxed foreign earnings. Earnings in the form of cash and cash equivalents are taxed at a rate of 15.5% and all other earnings are taxed at a rate of 8.0%. We recorded a provisional income tax expense of
$55 million
for Transition Tax.
|
|
|
Life
Science
|
|
Clinical
Diagnostics
|
|
Other
Operations
|
||||||
|
|
|
|
|
|
|
||||||
Segment net sales
|
2018
|
$
|
197.8
|
|
|
$
|
350.8
|
|
|
$
|
2.9
|
|
|
2017
|
$
|
174.3
|
|
|
$
|
322.3
|
|
|
$
|
3.5
|
|
|
|
|
|
|
|
|
||||||
Segment net profit (loss)
|
2018
|
$
|
3.3
|
|
|
$
|
36.6
|
|
|
$
|
—
|
|
|
2017
|
$
|
(18.8
|
)
|
|
$
|
41.6
|
|
|
$
|
0.2
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Total segment profit
|
$
|
39.9
|
|
|
$
|
23.0
|
|
Foreign currency exchange losses, net
|
(1.3
|
)
|
|
(1.8
|
)
|
||
Net corporate operating, interest and other expense not allocated to segments
|
(1.9
|
)
|
|
(2.1
|
)
|
||
Change in fair market value of equity securities
|
815.9
|
|
|
—
|
|
||
Other income (expense), net
|
11.1
|
|
|
1.0
|
|
||
Consolidated income before income taxes
|
$
|
863.7
|
|
|
$
|
20.1
|
|
|
|
Life Science
|
|
Clinical Diagnostics
|
|
Total
|
||||||
Balance as of January 1, 2018
|
|
$
|
2.2
|
|
|
$
|
4.1
|
|
|
$
|
6.3
|
|
Charged to expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Adjustment to expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash payments
|
|
(0.3
|
)
|
|
(0.7
|
)
|
|
(1.0
|
)
|
|||
Foreign currency translation losses
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Balance as of March 31, 2018
|
|
$
|
1.9
|
|
|
$
|
3.5
|
|
|
$
|
5.4
|
|
|
|
2018
|
||
Balance as of January 1
|
|
$
|
14.1
|
|
Charged to expense
|
|
—
|
|
|
Adjustment to expense
|
|
—
|
|
|
Cash payments
|
|
(1.3
|
)
|
|
Foreign currency translation losses
|
|
0.3
|
|
|
Balance as of March 31
|
|
$
|
13.1
|
|
|
Three Months Ended
|
||||
|
March 31,
|
||||
|
2018
|
|
2017
|
||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
45.2
|
|
|
46.0
|
|
Gross profit
|
54.8
|
|
|
54.0
|
|
Selling, general and administrative expense
|
37.9
|
|
|
38.9
|
|
Research and development expense
|
9.0
|
|
|
9.9
|
|
Net income
|
119.1
|
|
|
2.5
|
|
•
|
Our deferred tax assets and liabilities were measured at the enacted tax rate that will apply when these temporary differences are expected to be realized or settled.
|
•
|
The Tax Act imposes a Transition Tax payable over eight years. The Transition Tax is assessed on the U.S. shareholders’ share of certain foreign corporations’ accumulated untaxed foreign earnings. Earnings in the form of cash and cash equivalents are taxed at a rate of 15.5% and all other earnings are taxed at a rate of 8.0%. We recorded a provisional income tax expense of $55 million for Transition Tax.
|
•
|
higher cash received from customers in 2018 primarily due to higher sales activity in the fourth quarter of 2017 than the same period in 2016, which resulted in more cash collected in the first quarter of 2018, in addition to improving collections subsequent to the ERP implementation last year,
|
•
|
less cash paid to suppliers and employees primarily due to a $10.0 million payment for the RainDance preexisting condition in 2017, and higher 2017 payments to suppliers in preparation for the ERP implementation in April 2017, partially offset by higher employee related costs primarily for merit increases and more development payments to Propel,
|
•
|
lower net income tax payments in 2018 compared to 2017, and
|
•
|
lower net payments in 2018 compared to 2017 for forward foreign exchange contracts.
|
•
|
The trend towards managed care, together with healthcare reform of the delivery system in the United States and efforts to reform in Europe, has resulted in increased pressure on healthcare providers and other participants in the healthcare industry to reduce selling prices. Consolidation among healthcare providers and consolidation among other participants in the healthcare industry has resulted in fewer, more powerful groups, whose purchasing power gives them cost containment leverage. In particular, there has been a consolidation of laboratories and a consolidation of blood transfusion centers. These industry trends and competitive forces place constraints on the levels of overall pricing, and thus could have a material adverse effect on our gross margins for products we sell in clinical diagnostic markets.
|
•
|
Third party payors, such as Medicare and Medicaid in the United States, have reduced their reimbursements for certain medical products and services. Our Clinical Diagnostics business is impacted by the level of reimbursement available for clinical tests from third party payors. In the United States payment for many diagnostic tests furnished to Medicare fee-for-service beneficiaries is made based on the Medicare Clinical Laboratory Fee Schedule (CLFS), a fee schedule established and adjusted from time to time by the Centers for Medicare and Medicaid Services (CMS). Some commercial payors are guided by the CLFS in establishing their reimbursement rates. Clinicians may decide not to order clinical diagnostic tests if third party payments are inadequate, and we cannot predict whether third party payors will offer adequate reimbursement for tests utilizing our products to make them commercially attractive. Legislation, such as the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (PPACA) and the Middle Class Tax Relief and Job Creation Act of 2012, has reduced the payments for clinical laboratory services paid under the CLFS. In addition, the Protecting Access to Medicare Act of 2014 (PAMA) has made significant changes to the way Medicare will pay for clinical laboratory services, which has further reduced reimbursement rates.
|
•
|
The PPACA has also imposed a 2.3% excise tax on the sales of certain medical devices in the U.S., which we are required to pay on most of our United States Clinical Diagnostic sales. However, the Consolidated Appropriations Act, 2016 (Pub. L. 114-113), signed into law on December 18, 2015, included a two year moratorium on the medical device excise tax. On January 22, 2018, the moratorium on the medical device excise tax was further extended until January 1, 2020.
|
•
|
assimilate the operations and personnel of acquired companies;
|
•
|
retain acquired business customers;
|
•
|
minimize potential disruption to our ongoing business;
|
•
|
retain key technical and management personnel;
|
•
|
integrate acquired companies into our strategic and financial plans;
|
•
|
accurately assess the value of target companies, products and technologies;
|
•
|
comply with new regulatory requirements;
|
•
|
harmonize standards, controls, procedures and policies;
|
•
|
minimize the impact to our relationships with our employees and customers; and
|
•
|
assess, document and remediate any deficiencies in disclosure controls and procedures and internal control over financial reporting.
|
•
|
make it more difficult for us to satisfy our financial obligations, including those relating to our outstanding debt;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to the payment of interest and principal due under our debt, which will reduce funds available for other business purposes;
|
•
|
increase our vulnerability to general adverse economic and industry conditions;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;
|
•
|
place us at a competitive disadvantage compared with some of our competitors that have less debt; and
|
•
|
limit our ability to obtain additional financing required to fund working capital and capital expenditures and for other general corporate purposes.
|
•
|
the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from soliciting, receiving, offering or providing remuneration, directly or indirectly, in return for or to induce either the referral of an individual for, or the purchase order or recommendation of, any item or services for which payment may be made under a federal healthcare program such as the Medicare and Medicaid programs;
|
•
|
U.S. federal false claims laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent. In addition, the U.S. federal government may assert that a claim
|
•
|
the U.S. Physician Payment Sunshine Act, which requires certain manufacturers of drugs, biologics, devices and medical supplies to record any transfers of value to U.S. physicians and U.S. teaching hospitals;
|
•
|
the Health Insurance Portability and Accountability Act ("HIPAA"), as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; and
|
•
|
state or foreign law equivalents of each of the U.S. federal laws above, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers.
|
Exhibit
No.
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101.INS
|
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
BIO-RAD LABORATORIES, INC.
|
|||
(Registrant)
|
|||
|
|
|
|
Date:
|
May 10, 2018
|
|
/s/ Norman Schwartz
|
|
|
|
Norman Schwartz, Chairman of the Board,
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date:
|
May 10, 2018
|
|
/s/ Christine A. Tsingos
|
|
|
|
Christine A. Tsingos, Executive Vice President,
|
|
|
|
Chief Financial Officer
|
1 Year Bio Rad Laboratories Chart |
1 Month Bio Rad Laboratories Chart |
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