|
(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
|
|
Yes
o
|
No
x
|
Title of Class
|
|
Shares Outstanding at July 31, 2012
|
Class A Common Stock, Par Value $0.0001 per share
|
|
23,193,829
|
Class B Common Stock, Par Value $0.0001 per share
|
|
5,105,222
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
ASSETS:
|
(Unaudited)
|
|
|
||||
Cash and cash equivalents
|
$
|
456,487
|
|
|
$
|
574,231
|
|
Short-term investments
|
378,770
|
|
|
238,884
|
|
||
Accounts receivable, net
|
373,817
|
|
|
398,674
|
|
||
Inventories:
|
|
|
|
||||
Raw materials
|
93,707
|
|
|
99,326
|
|
||
Work in process
|
122,227
|
|
|
120,191
|
|
||
Finished goods
|
233,523
|
|
|
213,993
|
|
||
Total inventories
|
449,457
|
|
|
433,510
|
|
||
Prepaid expenses, taxes and other current assets
|
152,541
|
|
|
152,856
|
|
||
Total current assets
|
1,811,072
|
|
|
1,798,155
|
|
||
Property, plant and equipment, at cost
|
937,723
|
|
|
881,912
|
|
||
Less: accumulated depreciation and amortization
|
(557,067
|
)
|
|
(532,411
|
)
|
||
Property, plant and equipment, net
|
380,656
|
|
|
349,501
|
|
||
Goodwill, net
|
466,157
|
|
|
468,933
|
|
||
Purchased intangibles, net
|
241,341
|
|
|
259,497
|
|
||
Other assets
|
269,669
|
|
|
220,717
|
|
||
Total assets
|
$
|
3,168,895
|
|
|
$
|
3,096,803
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Accounts payable
|
$
|
119,448
|
|
|
$
|
129,124
|
|
Accrued payroll and employee benefits
|
113,435
|
|
|
112,564
|
|
||
Notes payable and current maturities of long-term debt
|
783
|
|
|
814
|
|
||
Income and other taxes payable
|
32,609
|
|
|
52,285
|
|
||
Accrued royalties
|
21,445
|
|
|
25,219
|
|
||
Other current liabilities
|
129,464
|
|
|
139,109
|
|
||
Total current liabilities
|
417,184
|
|
|
459,115
|
|
||
Long-term debt, net of current maturities
|
732,054
|
|
|
731,698
|
|
||
Other long-term liabilities
|
167,165
|
|
|
161,608
|
|
||
Total liabilities
|
1,316,403
|
|
|
1,352,421
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Bio-Rad stockholders’ equity:
|
|
|
|
||||
Class A common stock, shares issued 23,193,951 and 23,020,215 at 2012 and 2011, respectively; shares outstanding 23,193,829 and 23,020,215 at 2012 and 2011, respectively
|
2
|
|
|
2
|
|
||
Class B common stock, shares issued 5,106,139 and 5,164,765 at 2012 and 2011, respectively; shares outstanding 5,105,222 and 5,164,765 at 2012 and 2011, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
198,492
|
|
|
185,334
|
|
||
Class A treasury stock at cost, 122 and zero shares at 2012 and 2011, respectively
|
(12
|
)
|
|
—
|
|
||
Class B treasury stock at cost, 917 and zero shares at 2012 and 2011, respectively
|
(89
|
)
|
|
—
|
|
||
Retained earnings
|
1,439,258
|
|
|
1,359,910
|
|
||
Accumulated other comprehensive income
|
214,236
|
|
|
198,690
|
|
||
Total Bio-Rad stockholders’ equity
|
1,851,888
|
|
|
1,743,937
|
|
||
Noncontrolling interests
|
604
|
|
|
445
|
|
||
Total stockholders’ equity
|
1,852,492
|
|
|
1,744,382
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,168,895
|
|
|
$
|
3,096,803
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
510,422
|
|
|
$
|
521,656
|
|
|
$
|
996,699
|
|
|
$
|
1,006,777
|
|
Cost of goods sold
|
222,522
|
|
|
228,520
|
|
|
430,217
|
|
|
436,030
|
|
||||
Gross profit
|
287,900
|
|
|
293,136
|
|
|
566,482
|
|
|
570,747
|
|
||||
Selling, general and administrative expense
|
162,256
|
|
|
176,740
|
|
|
333,549
|
|
|
344,503
|
|
||||
Research and development expense
|
52,336
|
|
|
48,210
|
|
|
105,259
|
|
|
90,940
|
|
||||
Income from operations
|
73,308
|
|
|
68,186
|
|
|
127,674
|
|
|
135,304
|
|
||||
Interest expense
|
12,401
|
|
|
12,041
|
|
|
25,597
|
|
|
28,807
|
|
||||
Foreign exchange losses, net
|
1,619
|
|
|
2,744
|
|
|
3,060
|
|
|
5,786
|
|
||||
Other (income) expense, net
|
(6,731
|
)
|
|
(4,418
|
)
|
|
(13,181
|
)
|
|
(5,369
|
)
|
||||
Income before income taxes
|
66,019
|
|
|
57,819
|
|
|
112,198
|
|
|
106,080
|
|
||||
Provision for income taxes
|
(17,454
|
)
|
|
(17,797
|
)
|
|
(32,689
|
)
|
|
(33,120
|
)
|
||||
Net income including noncontrolling interests
|
48,565
|
|
|
40,022
|
|
|
79,509
|
|
|
72,960
|
|
||||
Net (income) loss attributable to noncontrolling interests
|
(222
|
)
|
|
26
|
|
|
(161
|
)
|
|
127
|
|
||||
Net income attributable to Bio-Rad
|
$
|
48,343
|
|
|
$
|
40,048
|
|
|
$
|
79,348
|
|
|
$
|
73,087
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income per share basic attributable to Bio-Rad
|
$
|
1.71
|
|
|
$
|
1.43
|
|
|
$
|
2.81
|
|
|
$
|
2.61
|
|
Weighted average common shares - basic
|
28,250
|
|
|
28,014
|
|
|
28,226
|
|
|
27,959
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income per share diluted attributable to Bio-Rad
|
$
|
1.69
|
|
|
$
|
1.41
|
|
|
$
|
2.78
|
|
|
$
|
2.57
|
|
Weighted average common shares - diluted
|
28,610
|
|
|
28,495
|
|
|
28,582
|
|
|
28,443
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net income including noncontrolling interests
|
$
|
48,565
|
|
|
$
|
40,022
|
|
|
$
|
79,509
|
|
|
$
|
72,960
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(46,019
|
)
|
|
63,322
|
|
|
(11,650
|
)
|
|
84,110
|
|
||||
Reclassification of realized portion of cumulative translation adjustments due to liquidation, for the three and six months ended June 30, 2012 and 2011, all net of tax expense of $0.
|
70
|
|
|
—
|
|
|
70
|
|
|
—
|
|
||||
Other post-employment benefits adjustments for the three and six months ended June 30, 2012 and 2011, all net of tax expense of $0.
|
175
|
|
|
—
|
|
|
181
|
|
|
—
|
|
||||
Net unrealized holding gains on available-for-sale investments, net of tax expense of $2.0 million for both the three months ended June 30, 2012 and 2011, and $13.2 million and $8.2 million for the six months ended June 30, 2012 and 2011, respectively.
|
3,434
|
|
|
3,461
|
|
|
22,688
|
|
|
14,085
|
|
||||
Reclassification adjustments for gains (losses) included in Net income including noncontrolling interests, net of tax expense of $0.1 million and $0 million for the three months ended June 30, 2012 and 2011, respectively, and $2.5 million and $0.1 million for the six months ended June 30, 2012 and 2011, respectively.
|
170
|
|
|
(37
|
)
|
|
4,254
|
|
|
104
|
|
||||
Other comprehensive (loss) income, net of tax
|
(42,170
|
)
|
|
66,746
|
|
|
15,543
|
|
|
98,299
|
|
||||
Comprehensive income
|
6,395
|
|
|
106,768
|
|
|
95,052
|
|
|
171,259
|
|
||||
Comprehensive (income) loss attributable to noncontrolling interests
|
(207
|
)
|
|
186
|
|
|
(159
|
)
|
|
373
|
|
||||
Comprehensive income attributable to Bio-Rad
|
$
|
6,188
|
|
|
$
|
106,954
|
|
|
$
|
94,893
|
|
|
$
|
171,632
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2012
|
|
2011
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Cash received from customers
|
$
|
1,008,515
|
|
|
$
|
1,020,282
|
|
Cash paid to suppliers and employees
|
(835,174
|
)
|
|
(842,830
|
)
|
||
Interest paid
|
(24,101
|
)
|
|
(33,296
|
)
|
||
Income tax payments
|
(47,619
|
)
|
|
(18,709
|
)
|
||
Investment proceeds and miscellaneous receipts, net
|
7,830
|
|
|
6,405
|
|
||
Excess tax benefits from share-based compensation
|
(549
|
)
|
|
(1,771
|
)
|
||
Net cash provided by operating activities
|
108,902
|
|
|
130,081
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(75,697
|
)
|
|
(42,557
|
)
|
||
Proceeds from sales of property, plant and equipment
|
114
|
|
|
114
|
|
||
Payments for acquisitions, net of cash received, and long-term investments
|
(18,589
|
)
|
|
(5,228
|
)
|
||
Payments for purchases of intangible assets
|
(1,233
|
)
|
|
(143
|
)
|
||
Payments for purchases of marketable securities and investments
|
(402,808
|
)
|
|
(237,984
|
)
|
||
Proceeds from sales of marketable securities and investments
|
48,971
|
|
|
43,327
|
|
||
Proceeds from maturities of marketable securities and investments
|
209,200
|
|
|
94,925
|
|
||
Proceeds from (payments for) foreign currency economic hedges, net
|
3,204
|
|
|
(10,530
|
)
|
||
Net cash used in investing activities
|
(236,838
|
)
|
|
(158,076
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net borrowings on line-of-credit arrangements and notes payable
|
226
|
|
|
498
|
|
||
Payments on long-term borrowings
|
(367
|
)
|
|
(226,368
|
)
|
||
Proceeds from issuance of common stock
|
6,212
|
|
|
10,458
|
|
||
Debt issuance costs on long-term borrowings
|
—
|
|
|
(242
|
)
|
||
Purchase of treasury stock
|
(101
|
)
|
|
—
|
|
||
Excess tax benefits from share-based compensation
|
549
|
|
|
1,771
|
|
||
Net cash provided by (used in) financing activities
|
6,519
|
|
|
(213,883
|
)
|
||
Effect of foreign exchange rate changes on cash
|
3,673
|
|
|
5,628
|
|
||
Net decrease in cash and cash equivalents
|
(117,744
|
)
|
|
(236,250
|
)
|
||
Cash and cash equivalents at beginning of period
|
574,231
|
|
|
906,551
|
|
||
Cash and cash equivalents at end of period
|
$
|
456,487
|
|
|
$
|
670,301
|
|
Reconciliation of net income including noncontrolling interests to net cash provided by operating activities:
|
|
|
|
||||
Net income including noncontrolling interests
|
$
|
79,509
|
|
|
$
|
72,960
|
|
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities excluding the effects of acquisitions:
|
|
|
|
||||
Depreciation and amortization
|
62,749
|
|
|
57,743
|
|
||
Share-based compensation
|
6,326
|
|
|
5,304
|
|
||
Foreign currency economic hedges, net
|
(3,204
|
)
|
|
10,530
|
|
||
(Gains) losses on dispositions of securities
|
(6,379
|
)
|
|
477
|
|
||
Excess tax benefits from share-based compensation
|
(549
|
)
|
|
(1,771
|
)
|
||
Decrease in accounts receivable
|
19,928
|
|
|
12,665
|
|
||
Increase in inventories
|
(15,295
|
)
|
|
(29,785
|
)
|
||
Increase in other current assets
|
(8,714
|
)
|
|
(11,962
|
)
|
||
Decrease in accounts payable and other current liabilities
|
(5,172
|
)
|
|
(9,344
|
)
|
||
(Decrease) increase in income taxes payable
|
(14,891
|
)
|
|
11,078
|
|
||
Other
|
(5,406
|
)
|
|
12,186
|
|
||
Net cash provided by operating activities
|
$
|
108,902
|
|
|
$
|
130,081
|
|
•
|
an overstatement of income tax expense in the first quarter of 2011 in the amount of
$1.6 million
, due to a delay in recognizing a reduction in a foreign tax rate; and
|
•
|
an understatement of income tax expense over the years 2008 to 2011 in the amount of
$0.9 million
, due to claiming a tax deduction in excess of a statutory limit.
|
•
|
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 (a):
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
81.1
|
|
|
$
|
—
|
|
|
$
|
81.1
|
|
Asset-backed securities
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.4
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
12.3
|
|
|
—
|
|
|
12.3
|
|
||||
Time deposits
|
30.0
|
|
|
—
|
|
|
—
|
|
|
30.0
|
|
||||
Money market funds
|
34.2
|
|
|
—
|
|
|
—
|
|
|
34.2
|
|
||||
Total cash equivalents
|
64.2
|
|
|
94.8
|
|
|
—
|
|
|
159.0
|
|
||||
Available-for-sale investments (b):
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
—
|
|
|
192.3
|
|
|
—
|
|
|
192.3
|
|
||||
Brokered certificates of deposit
|
—
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
86.4
|
|
|
—
|
|
|
86.4
|
|
||||
Foreign government obligations
|
—
|
|
|
4.2
|
|
|
—
|
|
|
4.2
|
|
||||
Municipal obligations
|
—
|
|
|
8.7
|
|
|
—
|
|
|
8.7
|
|
||||
Marketable equity securities
|
185.8
|
|
|
—
|
|
|
—
|
|
|
185.8
|
|
||||
Asset-backed securities
|
—
|
|
|
68.1
|
|
|
—
|
|
|
68.1
|
|
||||
Total available-for-sale investments
|
185.8
|
|
|
362.2
|
|
|
—
|
|
|
548.0
|
|
||||
Forward foreign exchange contracts (c)
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||
Total financial assets carried at fair value
|
$
|
250.0
|
|
|
$
|
457.5
|
|
|
$
|
—
|
|
|
$
|
707.5
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Forward foreign exchange contracts (d)
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
3.1
|
|
Contingent consideration (e)
|
—
|
|
|
—
|
|
|
16.6
|
|
|
16.6
|
|
||||
Total financial liabilities carried at fair value
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
16.6
|
|
|
$
|
19.7
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (a):
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
106.0
|
|
|
$
|
—
|
|
|
$
|
106.0
|
|
Bonds
|
—
|
|
|
8.6
|
|
|
—
|
|
|
8.6
|
|
||||
Time deposits
|
21.6
|
|
|
—
|
|
|
—
|
|
|
21.6
|
|
||||
Money market funds
|
58.3
|
|
|
—
|
|
|
—
|
|
|
58.3
|
|
||||
Total cash equivalents
|
79.9
|
|
|
114.6
|
|
|
—
|
|
|
194.5
|
|
||||
Available-for-sale investments (b):
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
—
|
|
|
170.6
|
|
|
—
|
|
|
170.6
|
|
||||
Brokered certificates of deposit
|
—
|
|
|
1.8
|
|
|
—
|
|
|
1.8
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
36.9
|
|
|
—
|
|
|
36.9
|
|
||||
Foreign government obligations
|
—
|
|
|
5.7
|
|
|
—
|
|
|
5.7
|
|
||||
Municipal obligations
|
—
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
||||
Marketable equity securities
|
134.8
|
|
|
—
|
|
|
—
|
|
|
134.8
|
|
||||
Asset-backed securities
|
—
|
|
|
11.2
|
|
|
—
|
|
|
11.2
|
|
||||
Total available-for-sale investments
|
134.8
|
|
|
231.2
|
|
|
—
|
|
|
366.0
|
|
||||
Forward foreign exchange contracts (c)
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
||||
Total financial assets carried at fair value
|
$
|
214.7
|
|
|
$
|
346.6
|
|
|
$
|
—
|
|
|
$
|
561.3
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Forward foreign exchange contracts (d)
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
Contingent consideration (e)
|
—
|
|
|
—
|
|
|
24.1
|
|
|
24.1
|
|
||||
Total financial liabilities carried at fair value
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
24.1
|
|
|
$
|
25.3
|
|
(a)
|
Cash equivalents are included in Cash and cash equivalents in the Condensed Consolidated Balance Sheets.
|
(b)
|
Available-for-sale investments are included in the following accounts in the Condensed Consolidated Balance Sheets (in millions):
|
|
June 30,
2012 |
|
December 31, 2011
|
||||
Short-term investments
|
$
|
378.8
|
|
|
$
|
238.8
|
|
Other assets
|
169.2
|
|
|
127.2
|
|
||
Total
|
$
|
548.0
|
|
|
$
|
366.0
|
|
(c)
|
Forward foreign exchange contracts in an asset position are included in Prepaid expenses, taxes and other current assets in the Condensed Consolidated Balance Sheets.
|
(d)
|
Forward foreign exchange contracts in a liability position are included in Other current liabilities in the Condensed Consolidated Balance Sheets.
|
(e)
|
Contingent consideration liability is included in the following accounts in the Condensed Consolidated Balance Sheet (in millions):
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
Other current liabilities
|
$
|
9.8
|
|
|
$
|
8.5
|
|
Other long-term liabilities
|
6.8
|
|
|
15.6
|
|
||
Total
|
$
|
16.6
|
|
|
$
|
24.1
|
|
|
2012
|
||
January 1
|
$
|
24.1
|
|
Decrease in fair value included in Selling, general and administrative expense
|
(7.5
|
)
|
|
June 30
|
$
|
16.6
|
|
|
June 30,
|
||
|
2012
|
||
|
|
||
Contracts maturing in July through September 2012 to sell foreign currency:
|
|
||
Notional value
|
$
|
49.9
|
|
Unrealized loss
|
$
|
0.8
|
|
Contracts maturing in July through September 2012 to purchase foreign currency:
|
|
||
Notional value
|
$
|
344.6
|
|
Unrealized loss
|
$
|
1.8
|
|
|
June 30, 2012
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
191.8
|
|
|
$
|
0.6
|
|
|
$
|
(0.1
|
)
|
|
$
|
192.3
|
|
Brokered certificates of deposit
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
||||
Municipal obligations
|
8.7
|
|
|
—
|
|
|
—
|
|
|
8.7
|
|
||||
Asset-backed securities
|
67.6
|
|
|
0.2
|
|
|
—
|
|
|
67.8
|
|
||||
U.S. government sponsored agencies
|
86.3
|
|
|
0.2
|
|
|
(0.1
|
)
|
|
86.4
|
|
||||
Foreign government obligations
|
4.0
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
||||
Marketable equity securities
|
17.2
|
|
|
0.2
|
|
|
(0.3
|
)
|
|
17.1
|
|
||||
|
378.1
|
|
|
1.2
|
|
|
(0.5
|
)
|
|
378.8
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
Marketable equity securities
|
56.9
|
|
|
111.8
|
|
|
—
|
|
|
168.7
|
|
||||
Asset-backed securities
|
0.5
|
|
|
—
|
|
|
(0.2
|
)
|
|
0.3
|
|
||||
Foreign government obligations
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
|
57.6
|
|
|
111.8
|
|
|
(0.2
|
)
|
|
169.2
|
|
||||
Total
|
$
|
435.7
|
|
|
$
|
113.0
|
|
|
$
|
(0.7
|
)
|
|
$
|
548.0
|
|
|
December 31, 2011
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
170.9
|
|
|
$
|
0.1
|
|
|
$
|
(0.4
|
)
|
|
$
|
170.6
|
|
Brokered certificates of deposit
|
1.8
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
||||
Municipal obligations
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
||||
Asset-backed securities
|
10.8
|
|
|
—
|
|
|
—
|
|
|
10.8
|
|
||||
U.S. government sponsored agencies
|
36.8
|
|
|
0.1
|
|
|
—
|
|
|
36.9
|
|
||||
Foreign government obligations
|
5.4
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
||||
Marketable equity securities
|
7.7
|
|
|
0.6
|
|
|
—
|
|
|
8.3
|
|
||||
|
238.4
|
|
|
0.8
|
|
|
(0.4
|
)
|
|
238.8
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
Marketable equity securities
|
57.2
|
|
|
70.0
|
|
|
(0.7
|
)
|
|
126.5
|
|
||||
Asset-backed securities
|
0.5
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.4
|
|
||||
Foreign government obligations
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
|
58.0
|
|
|
70.0
|
|
|
(0.8
|
)
|
|
127.2
|
|
||||
Total
|
$
|
296.4
|
|
|
$
|
70.8
|
|
|
$
|
(1.2
|
)
|
|
$
|
366.0
|
|
|
June 30,
2012 |
|
December 31, 2011
|
||||
Fair value
|
$
|
156.1
|
|
|
$
|
77.8
|
|
Gross unrealized losses for investments in a loss position 12 months or more
|
$
|
0.1
|
|
|
$
|
0.4
|
|
Gross unrealized losses for investments in a loss position less than 12 months
|
$
|
0.6
|
|
|
$
|
0.8
|
|
|
Amortized
Cost
|
|
Estimated Fair
Value
|
||||
Mature in less than one year
|
$
|
130.8
|
|
|
$
|
130.8
|
|
Mature in one to five years
|
184.1
|
|
|
184.4
|
|
||
Mature in more than five years
|
46.7
|
|
|
47.0
|
|
||
Total
|
$
|
361.6
|
|
|
$
|
362.2
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
|
Fair Value Hierarchy Level
|
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
|
Fair Value Hierarchy Level
|
||||||||
Other assets
|
$
|
233.3
|
|
|
$
|
355.6
|
|
|
1
|
|
$
|
186.6
|
|
|
$
|
252.4
|
|
|
1
|
Total long-term debt, excluding leases
and current maturities
|
$
|
719.5
|
|
|
$
|
771.8
|
|
|
2
|
|
$
|
719.1
|
|
|
$
|
759.1
|
|
|
2
|
|
Life
Science
|
|
Clinical
Diagnostics
|
|
Total
|
||||||
Balances as of January 1, 2012:
|
|
|
|
|
|
||||||
Goodwill
|
$
|
176.8
|
|
|
$
|
319.3
|
|
|
$
|
496.1
|
|
Accumulated impairment losses
|
(27.2
|
)
|
|
—
|
|
|
(27.2
|
)
|
|||
Goodwill, net
|
149.6
|
|
|
319.3
|
|
|
468.9
|
|
|||
|
|
|
|
|
|
||||||
Acquisitions
|
—
|
|
|
1.1
|
|
|
1.1
|
|
|||
Final purchase accounting fair value adjustments
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|||
Currency fluctuations
|
—
|
|
|
(3.2
|
)
|
|
(3.2
|
)
|
|||
|
|
|
|
|
|
||||||
Balances as of June 30, 2012
|
|
|
|
|
|
||||||
Goodwill
|
176.2
|
|
|
317.2
|
|
|
493.4
|
|
|||
Accumulated impairment losses
|
(27.2
|
)
|
|
—
|
|
|
(27.2
|
)
|
|||
Goodwill, net
|
$
|
149.0
|
|
|
$
|
317.2
|
|
|
$
|
466.2
|
|
|
June 30, 2012
|
||||||||||||
|
Average
Remaining
Life (years)
|
|
Purchase
Price
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Customer relationships/lists
|
1-12
|
|
$
|
96.9
|
|
|
$
|
(34.2
|
)
|
|
$
|
62.7
|
|
Know how
|
1-14
|
|
185.9
|
|
|
(55.1
|
)
|
|
130.8
|
|
|||
Developed product technology
|
1-10
|
|
52.2
|
|
|
(27.0
|
)
|
|
25.2
|
|
|||
Licenses
|
1-8
|
|
35.5
|
|
|
(17.2
|
)
|
|
18.3
|
|
|||
Tradenames
|
1-10
|
|
29.1
|
|
|
(24.9
|
)
|
|
4.2
|
|
|||
Covenants not to compete
|
1-7
|
|
5.8
|
|
|
(5.7
|
)
|
|
0.1
|
|
|||
Patents
|
—
|
|
1.0
|
|
|
(1.0
|
)
|
|
—
|
|
|||
Other
|
—
|
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|||
|
|
|
$
|
406.5
|
|
|
$
|
(165.2
|
)
|
|
$
|
241.3
|
|
|
December 31, 2011
|
||||||||||||
|
Average
Remaining
Life (years)
|
|
Purchase
Price
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Customer relationships/lists
|
1-12
|
|
$
|
98.7
|
|
|
$
|
(30.9
|
)
|
|
$
|
67.8
|
|
Know how
|
1-14
|
|
187.0
|
|
|
(45.7
|
)
|
|
141.3
|
|
|||
Developed product technology
|
1-11
|
|
47.6
|
|
|
(24.6
|
)
|
|
23.0
|
|
|||
Licenses
|
1-9
|
|
35.6
|
|
|
(15.7
|
)
|
|
19.9
|
|
|||
Tradenames
|
1-10
|
|
29.5
|
|
|
(22.1
|
)
|
|
7.4
|
|
|||
Covenants not to compete
|
1-7
|
|
5.8
|
|
|
(5.7
|
)
|
|
0.1
|
|
|||
Patents
|
—
|
|
1.0
|
|
|
(1.0
|
)
|
|
—
|
|
|||
Other
|
—
|
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|||
|
|
|
$
|
405.3
|
|
|
$
|
(145.8
|
)
|
|
$
|
259.5
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Amortization expense
|
$
|
10.7
|
|
|
$
|
9.3
|
|
|
$
|
21.5
|
|
|
$
|
18.1
|
|
December 31, 2011
|
$
|
16.4
|
|
Provision for warranty
|
8.6
|
|
|
Actual warranty costs
|
(10.1
|
)
|
|
June 30, 2012
|
$
|
14.9
|
|
|
June 30,
2012 |
|
December 31, 2011
|
||||
|
|
|
|
||||
8.0% Senior Subordinated Notes due 2016
|
$
|
296.6
|
|
|
$
|
296.3
|
|
4.875% Senior Notes due 2020
|
422.9
|
|
|
422.8
|
|
||
Capital leases and other debt
|
13.0
|
|
|
13.2
|
|
||
|
732.5
|
|
|
732.3
|
|
||
Less current maturities
|
(0.4
|
)
|
|
(0.6
|
)
|
||
Long-term debt
|
$
|
732.1
|
|
|
$
|
731.7
|
|
January 1, 2012
|
$
|
0.4
|
|
Net income attributable to noncontrolling interests
|
0.2
|
|
|
Currency fluctuations
|
—
|
|
|
June 30, 2012
|
$
|
0.6
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
Basic weighted average shares outstanding
|
28,250
|
|
|
28,014
|
|
|
28,226
|
|
|
27,959
|
|
Effect of potentially dilutive stock options and restricted stock awards
|
360
|
|
|
481
|
|
|
356
|
|
|
484
|
|
Diluted weighted average common shares
|
28,610
|
|
|
28,495
|
|
|
28,582
|
|
|
28,443
|
|
Anti-dilutive shares
|
91
|
|
|
—
|
|
|
93
|
|
|
37
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Interest and investment income
|
$
|
(5.9
|
)
|
|
$
|
(4.9
|
)
|
|
$
|
(6.9
|
)
|
|
$
|
(5.6
|
)
|
Net realized (gains) losses on investments
|
(1.0
|
)
|
|
0.1
|
|
|
(7.4
|
)
|
|
(0.2
|
)
|
||||
Miscellaneous other expense items
|
0.2
|
|
|
0.4
|
|
|
1.1
|
|
|
0.4
|
|
||||
Other (income) expense, net
|
$
|
(6.7
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(13.2
|
)
|
|
$
|
(5.4
|
)
|
|
|
Life
Science
|
|
Clinical
Diagnostics
|
|
Other
Operations
|
||||||
|
|
|
|
|
|
|
||||||
Segment net sales
|
2012
|
$
|
162.4
|
|
|
$
|
344.0
|
|
|
$
|
4.0
|
|
|
2011
|
$
|
169.9
|
|
|
$
|
348.0
|
|
|
$
|
3.7
|
|
|
|
|
|
|
|
|
||||||
Segment profit
|
2012
|
$
|
5.4
|
|
|
$
|
55.4
|
|
|
$
|
0.8
|
|
|
2011
|
$
|
10.0
|
|
|
$
|
46.6
|
|
|
$
|
0.5
|
|
|
|
Life
Science
|
|
Clinical
Diagnostics
|
|
Other
Operations
|
||||||
|
|
|
|
|
|
|
||||||
Segment net sales
|
2012
|
$
|
317.2
|
|
|
$
|
671.2
|
|
|
$
|
8.3
|
|
|
2011
|
$
|
324.4
|
|
|
$
|
675.2
|
|
|
$
|
7.2
|
|
|
|
|
|
|
|
|
||||||
Segment profit
|
2012
|
$
|
1.5
|
|
|
$
|
101.2
|
|
|
$
|
1.6
|
|
|
2011
|
$
|
13.1
|
|
|
$
|
94.6
|
|
|
$
|
0.7
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Total segment profit
|
$
|
61.6
|
|
|
$
|
57.1
|
|
|
$
|
104.3
|
|
|
$
|
108.4
|
|
Foreign exchange losses, net
|
(1.6
|
)
|
|
(2.7
|
)
|
|
(3.1
|
)
|
|
(5.8
|
)
|
||||
Net corporate operating, interest and other expense not allocated to segments
|
(0.7
|
)
|
|
(1.0
|
)
|
|
(2.2
|
)
|
|
(1.9
|
)
|
||||
Other income (expense), net
|
6.7
|
|
|
4.4
|
|
|
13.2
|
|
|
5.4
|
|
||||
Consolidated income before taxes
|
$
|
66.0
|
|
|
$
|
57.8
|
|
|
$
|
112.2
|
|
|
$
|
106.1
|
|
•
|
an overstatement of income tax expense in the first quarter of 2011 in the amount of
$1.6 million
, due to a delay in recognizing a reduction in a foreign tax rate; and
|
•
|
an understatement of income tax expense over the years 2008 to 2011 in the amount of
$0.9 million
, due to claiming a tax deduction in excess of a statutory limit.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
43.6
|
|
|
43.8
|
|
|
43.2
|
|
|
43.3
|
|
Gross profit
|
56.4
|
|
|
56.2
|
|
|
56.8
|
|
|
56.7
|
|
Selling, general and administrative expense
|
31.8
|
|
|
33.9
|
|
|
33.5
|
|
|
34.2
|
|
Research and development expense
|
10.3
|
|
|
9.2
|
|
|
10.6
|
|
|
9.0
|
|
Net income attributable to Bio-Rad
|
9.5
|
|
|
7.7
|
|
|
8.0
|
|
|
7.3
|
|
•
|
Company-wide, comprehensive training of our personnel in the requirements of the FCPA, including training with respect to those areas of our operations that are most likely to raise FCPA compliance concerns;
|
•
|
With the assistance of special counsel to the Audit Committee, who have extensive experience in the area of FCPA compliance, our adoption of a comprehensive FCPA compliance policy which we have determined is appropriate for us in light of our worldwide operations, particularly in geographical areas that present challenges to regulatory compliance because of less mature legal frameworks, and which specifically includes:
|
◦
|
Specific Procedures for engaging third party distributors, agents and similar representatives; and
|
◦
|
Pre-approval of certain customer-related expenditures;
|
•
|
Formation and operation of a formal Disclosure Committee;
|
•
|
Global reorganization of our finance department in which finance managers report directly to our Chief Financial Officer;
|
•
|
Our hiring of a Corporate Compliance Officer, who reports directly to our Chief Executive Officer, to assist with anti-corruption and other compliance matters;
|
•
|
Implementation of new expenditure approval processes in some countries;
|
•
|
An increase in audit scope by our internal audit department to test for pre-approval of certain customer-related expenditures;
|
•
|
An increase in the number of locations audited by our internal audit department;
|
•
|
Imposition of personnel actions for non-compliance with our policies; and
|
•
|
Our determination that, in the future, FCPA compliance will be a point of emphasis to be evaluated periodically by our internal legal and audit departments, and that a report on our FCPA compliance will be provided regularly to the Audit Committee.
|
•
|
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.
|
|
At June 30, 2012
|
||
|
(dollars in millions)
|
||
Total debt
|
$
|
732.8
|
|
Bio-Rad’s stockholders’ equity
|
$
|
1,851.9
|
|
Debt to equity ratio
|
0.4
|
|
•
|
make it more difficult for us to satisfy our financial obligations, including those relating to our outstanding notes;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to the payment of interest and principal due under our debt, including our outstanding notes, 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.
|
•
|
incur additional debt;
|
•
|
acquire other businesses or assets through merger or purchase;
|
•
|
create liens;
|
•
|
make investments;
|
•
|
enter into transactions with affiliates;
|
•
|
sell assets;
|
•
|
in the case of some of our subsidiaries, guarantee debt; and
|
•
|
declare or pay dividends, redeem stock or make other distributions to stockholders.
|
BIO-RAD LABORATORIES, INC.
|
|||
(Registrant)
|
|||
|
|
|
|
Date:
|
August 9, 2012
|
|
/s/ Norman Schwartz
|
|
|
|
Norman Schwartz, President,
|
|
|
|
Chief Executive Officer
|
|
|
|
|
Date:
|
August 9, 2012
|
|
/s/ Christine A. Tsingos
|
|
|
|
Christine A. Tsingos, Vice President,
|
|
|
|
Chief Financial Officer
|
By:
|
/s/ Sanford S. Wadler
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Bio-Rad Laboratories, Inc.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report fairly present, in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 9, 2012
|
|
/s/ Norman Schwartz
|
|
|
|
Norman Schwartz
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Bio-Rad Laboratories, Inc.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report fairly present, in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 9, 2012
|
|
/s/ Christine A.Tsingos
|
|
|
|
Christine A. Tsingos
|
|
|
|
Vice President,
|
|
|
|
Chief Financial Officer
|
(1)
|
the Quarterly Report on Form 10-Q of the Company for the quarter ended
June 30, 2012
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 9, 2012
|
|
/s/ Norman Schwartz
|
|
|
|
Norman Schwartz
|
|
|
|
Chief Executive Officer
|
(1)
|
the Quarterly Report on Form 10-Q of the Company for the quarter ended
June 30, 2012
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 9, 2012
|
|
/s/ Christine A. Tsingos
|
|
|
|
Christine A. Tsingos
|
|
|
|
Vice President,
|
|
|
|
Chief Financial Officer
|