Bio-Rad Laboratories, Inc. has announced financial results for the fourth quarter and fiscal year ended December 31, 2014.
Fourth-quarter 2014 reported revenues were $598.2 million, a decrease of 0.7% compared to $602.6 million reported for the fourth quarter of 2013. On a currency-neutral basis, quarterly revenues increased 4.6% compared to the same period in 2013. Fourth-quarter gross margin was 53.1% compared to 53.6% during the same quarter in 2013.
Net income for the fourth quarter of 2014 was $39.0 million, or $1.34 per share on a fully diluted basis, compared to $30.1 million, or $1.04 per share during the same period in 2013. Impacting the fourth quarter of 2014 was $11.4 million of expense associated with a product line discontinuation and $7.0 million reflecting the re-valuation of contingent consideration related to prior acquisitions.
The fourth quarter of 2014 benefitted from no accrual of settlement costs associated with the United States Foreign Corrupt Practice Act (FCPA) matter, compared to the prior year quarter.
The effective tax rate for the fourth quarter of 2014 of 14.7% was significantly lower than the effective tax rate for the fourth quarter of 2013 of 32.3% mainly due to the reinstatement of the 2014 U.S. research & development tax credit and releases of valuation allowances and tax reserves.
For the full year of 2014, sales were $2,175.0 million compared to $2,132.7 million in 2013, an increase of 2.0%, or 3.3% on a currency neutral basis. Full-year gross margin was 54.2% compared to 55.3% reported in 2013. The net decline in gross margin is largely attributable to $11.6 million resulting from plant closures and product line discontinuations.
Full-year net income in 2014 was $88.8 million, or $3.05 per share on a fully diluted basis, compared to $77.8 million, or $2.69 per share in 2013. The change in net income was primarily due to a reduction of $18.7 million of annual interest expense in 2014 arising from the redemption of Senior Subordinated Notes in September 2013 and $15.0 million less in settlement costs associated with the FCPA matter. These items were offset in large part by the overall impact of $14.7 million from plant closures and product line discontinuations as well as additional investment associated with our April 2014 acquisition of GnuBIO.
As announced previously, in the fourth quarter of 2014 the Company settled the previously disclosed investigations by the U.S. Department of Justice and the Securities and Exchange Commission in connection with the FCPA matter and paid approximately $55 million in resolution.
"In the absence of currency headwinds experienced in the latter part of the year, we are encouraged with our underlying performance in the fourth quarter and the entire year," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "The year was one of progress on many fronts and we look forward to 2015."
The Life Science segment net sales for the fourth quarter were $223.7 million, up 1.5% compared to the same period in 2013. On a currency-neutral basis, Life Science segment sales increased by 6.3%. The sales increase during the quarter reflected growth in the segment’s core businesses, in particular, sales of gene expression and protein quantification products and the Company’s QX200™ Droplet Digital™ PCR system. During the quarter Bio-Rad introduced its S3e™ Cell Sorter, an enhanced system for cell analysis. Full-year reported revenues for the Life Science segment were $728.3 million, up 2.6% compared to the same period in 2013, or an increase of 4.0% on a currency-neutral basis.
The Clinical Diagnostics segment reported net sales of $370.3 million for the fourth quarter, a decrease of 2.0% compared to the same period in 2013. On a currency-neutral basis, net sales were up 3.6%. Results from the fourth quarter reflected growth across most product lines, most notably immunology, quality controls, and diabetes products. During the fourth quarter, the Company announced that it had received Premarket Application approval from the U.S. Food and Drug Administration for the Company’s Geenius™ HIV 1/2 Supplemental Assay. The assay is a single-use test intended for use as an additional, more specific, test to confirm the presence of and differentiate antibodies to HIV Types 1 and 2. Full-year reported revenues for the Clinical Diagnostics segment were $1,432.3 million, up 1.7% compared to the same period in 2013. On a currency-neutral basis, full-year sales increased 2.9% compared to 2013.
2014 Full-Year Highlights
• Full-year, sales were $2,175.0 million compared to $2,132.7 million in 2013. After normalizing for the impact of currency effects, full year revenues increased 3.3%.
• Year-over-year net income was $88.8 million, or $3.05 per share on a fully diluted basis, compared to $77.8 million, or $2.69 per share in 2013.
• In April, Bio-Rad purchased GnuBIO, a droplet-based DNA sequencing technology that is intended to integrate workflow for medical diagnostics.
• Also during the second quarter, Bio-Rad announced the launch of two new kits for its fully-automated BioPlex® 2200 system: the BioPlex® 2200 HIV Ag-Ab kit, a first-in-class 5th generation HIV test, and the BioPlex® 2200 25-OH Vitamin D kit. Both kits were launched in markets outside the U.S.
• In September, Bio-Rad introduced ZOE™ Fluorescent Cell Imager, a digital imaging system that simplifies fluorescence imaging for cell culture applications.
• During the fourth quarter Bio-Rad introduced the S3e Cell Sorter, a benchtop platform to improve cell research.
• Also during the fourth quarter, Bio-Rad expanded its family of NGC™ Medium-Pressure Chromatography Systems launching the NGC Discover™ and NGC™ Discover Pro Systems.
• In November, Bio-Rad received Premarket Application approval from the U.S. Food and Drug Administration for the Company’s Geenius HIV 1/2 Supplemental Assay.