|
(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 October 28, 2014
|
Class A Common Stock, Par Value $0.0001 per share
|
|
23,862,625
|
Class B Common Stock, Par Value $0.0001 per share
|
|
5,097,303
|
|
Condensed Consolidated Statements of
Operations
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
ASSETS:
|
(Unaudited)
|
|
|
||||
Cash and cash equivalents
|
$
|
424,593
|
|
|
$
|
331,551
|
|
Short-term investments
|
277,985
|
|
|
277,369
|
|
||
Accounts receivable, net
|
354,401
|
|
|
422,660
|
|
||
Inventories:
|
|
|
|
||||
Raw materials
|
119,667
|
|
|
105,708
|
|
||
Work in process
|
135,524
|
|
|
129,894
|
|
||
Finished goods
|
260,856
|
|
|
280,643
|
|
||
Total inventories
|
516,047
|
|
|
516,245
|
|
||
Prepaid expenses, taxes and other current assets
|
191,419
|
|
|
209,654
|
|
||
Total current assets
|
1,764,445
|
|
|
1,757,479
|
|
||
Property, plant and equipment, at cost
|
1,088,124
|
|
|
1,059,828
|
|
||
Less: accumulated depreciation and amortization
|
(667,227
|
)
|
|
(645,427
|
)
|
||
Property, plant and equipment, net
|
420,897
|
|
|
414,401
|
|
||
Goodwill, net
|
513,454
|
|
|
517,770
|
|
||
Purchased intangibles, net
|
273,527
|
|
|
266,188
|
|
||
Other investments
|
364,129
|
|
|
377,870
|
|
||
Other assets
|
49,572
|
|
|
55,082
|
|
||
Total assets
|
$
|
3,386,024
|
|
|
$
|
3,388,790
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Accounts payable
|
$
|
126,640
|
|
|
$
|
148,510
|
|
Accrued payroll and employee benefits
|
148,283
|
|
|
130,658
|
|
||
Notes payable and current maturities of long-term debt
|
1,471
|
|
|
1,786
|
|
||
Income and other taxes payable
|
24,399
|
|
|
33,555
|
|
||
Accrued legal settlements
|
49,450
|
|
|
30,000
|
|
||
Other current liabilities
|
153,540
|
|
|
142,963
|
|
||
Total current liabilities
|
503,783
|
|
|
487,472
|
|
||
Long-term debt, net of current maturities
|
435,739
|
|
|
435,615
|
|
||
Other long-term liabilities
|
269,772
|
|
|
278,981
|
|
||
Total liabilities
|
1,209,294
|
|
|
1,202,068
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Class A common stock, shares issued 23,862,747 and 23,680,749 at 2014 and 2013, respectively; shares outstanding 23,862,625 and 23,680,627 at 2014 and 2013, respectively
|
2
|
|
|
2
|
|
||
Class B common stock, shares issued 5,098,220 and 5,096,780 at 2014 and 2013, respectively; shares outstanding 5,097,303 and 5,095,863 at 2014 and 2013, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
259,865
|
|
|
239,986
|
|
||
Class A treasury stock at cost, 122 shares at 2014 and 2013
|
(12
|
)
|
|
(12
|
)
|
||
Class B treasury stock at cost, 917 shares at 2014 and 2013
|
(89
|
)
|
|
(89
|
)
|
||
Retained earnings
|
1,655,925
|
|
|
1,606,117
|
|
||
Accumulated other comprehensive income
|
261,038
|
|
|
340,717
|
|
||
Total stockholders’ equity
|
2,176,730
|
|
|
2,186,722
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,386,024
|
|
|
$
|
3,388,790
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
530,644
|
|
|
$
|
505,066
|
|
|
$
|
1,576,820
|
|
|
$
|
1,530,059
|
|
Cost of goods sold
|
242,068
|
|
|
220,850
|
|
|
715,713
|
|
|
674,330
|
|
||||
Gross profit
|
288,576
|
|
|
284,216
|
|
|
861,107
|
|
|
855,729
|
|
||||
Selling, general and administrative expense
|
202,550
|
|
|
202,238
|
|
|
600,663
|
|
|
583,486
|
|
||||
Research and development expense
|
52,786
|
|
|
52,920
|
|
|
161,046
|
|
|
155,104
|
|
||||
Income from operations
|
33,240
|
|
|
29,058
|
|
|
99,398
|
|
|
117,139
|
|
||||
Interest expense
|
7,710
|
|
|
31,611
|
|
|
17,131
|
|
|
54,252
|
|
||||
Foreign currency exchange losses, net
|
3,667
|
|
|
3,330
|
|
|
6,118
|
|
|
5,723
|
|
||||
Other (income) expense, net
|
(613
|
)
|
|
(667
|
)
|
|
(9,662
|
)
|
|
(10,711
|
)
|
||||
Income (loss) before income taxes
|
22,476
|
|
|
(5,216
|
)
|
|
85,811
|
|
|
67,875
|
|
||||
Provision for income taxes
|
(10,967
|
)
|
|
(1,883
|
)
|
|
(36,003
|
)
|
|
(20,200
|
)
|
||||
Net income (loss) including noncontrolling interests
|
11,509
|
|
|
(7,099
|
)
|
|
49,808
|
|
|
47,675
|
|
||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
||||
Net income (loss) attributable to Bio-Rad
|
$
|
11,509
|
|
|
$
|
(7,099
|
)
|
|
$
|
49,808
|
|
|
$
|
47,654
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per basic share attributable to Bio-Rad
|
$
|
0.40
|
|
|
$
|
(0.25
|
)
|
|
$
|
1.73
|
|
|
$
|
1.67
|
|
Weighted average common shares - basic
|
28,884
|
|
|
28,603
|
|
|
28,834
|
|
|
28,545
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per diluted share attributable to Bio-Rad
|
$
|
0.39
|
|
|
$
|
(0.25
|
)
|
|
$
|
1.71
|
|
|
$
|
1.65
|
|
Weighted average common shares - diluted
|
29,141
|
|
|
28,603
|
|
|
29,097
|
|
|
28,870
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income (loss) including noncontrolling interests
|
$
|
11,509
|
|
|
$
|
(7,099
|
)
|
|
$
|
49,808
|
|
|
$
|
47,675
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(77,956
|
)
|
|
40,668
|
|
|
(70,322
|
)
|
|
5,078
|
|
||||
Foreign other post-employment benefits adjustments, net of income taxes
|
716
|
|
|
(246
|
)
|
|
895
|
|
|
45
|
|
||||
Net unrealized holding (losses) gains on available-for-sale (AFS) investments, net of income taxes
|
(13,007
|
)
|
|
8,510
|
|
|
(10,252
|
)
|
|
36,835
|
|
||||
Other comprehensive (loss) income, net of income taxes
|
(90,247
|
)
|
|
48,932
|
|
|
(79,679
|
)
|
|
41,958
|
|
||||
Comprehensive (loss) income
|
(78,738
|
)
|
|
41,833
|
|
|
(29,871
|
)
|
|
89,633
|
|
||||
Comprehensive (income) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(185
|
)
|
||||
Comprehensive (loss) income attributable to Bio-Rad
|
$
|
(78,738
|
)
|
|
$
|
41,833
|
|
|
$
|
(29,871
|
)
|
|
$
|
89,448
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Cash received from customers
|
$
|
1,613,723
|
|
|
$
|
1,531,251
|
|
Cash paid to suppliers and employees
|
(1,352,654
|
)
|
|
(1,335,844
|
)
|
||
Interest paid
|
(10,757
|
)
|
|
(50,188
|
)
|
||
Income tax payments
|
(31,105
|
)
|
|
(59,720
|
)
|
||
Investment proceeds and miscellaneous receipts, net
|
11,363
|
|
|
12,926
|
|
||
Excess tax benefits from share-based compensation
|
(766
|
)
|
|
(808
|
)
|
||
Proceeds from forward foreign exchange contracts, net
|
3,292
|
|
|
969
|
|
||
Net cash provided by operating activities
|
233,096
|
|
|
98,586
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(80,865
|
)
|
|
(78,938
|
)
|
||
Proceeds from dispositions of property, plant and equipment
|
381
|
|
|
1,252
|
|
||
Payments for acquisitions, net of cash received, and long-term investments
|
(43,645
|
)
|
|
(68,510
|
)
|
||
Payments for purchases of intangible assets
|
(15,488
|
)
|
|
(500
|
)
|
||
Payments for purchases of marketable securities and investments
|
(159,607
|
)
|
|
(325,036
|
)
|
||
Proceeds from sales of marketable securities and investments
|
58,691
|
|
|
277,389
|
|
||
Proceeds from maturities of marketable securities and investments
|
99,466
|
|
|
234,707
|
|
||
Net cash (used in) provided by investing activities
|
(141,067
|
)
|
|
40,364
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net payments on line-of-credit arrangements and notes payable
|
(362
|
)
|
|
(18
|
)
|
||
Payments on long-term borrowings
|
(181
|
)
|
|
(300,178
|
)
|
||
Payments of contingent consideration
|
—
|
|
|
(25,474
|
)
|
||
Proceeds from issuance of common stock
|
8,365
|
|
|
9,397
|
|
||
Payments of debt issuance costs for credit agreement
|
(524
|
)
|
|
—
|
|
||
Excess tax benefits from share-based compensation
|
766
|
|
|
808
|
|
||
Net cash provided by (used in) financing activities
|
8,064
|
|
|
(315,465
|
)
|
||
Effect of foreign exchange rate changes on cash
|
(7,051
|
)
|
|
4,920
|
|
||
Net increase (decrease) in cash and cash equivalents
|
93,042
|
|
|
(171,595
|
)
|
||
Cash and cash equivalents at beginning of period
|
331,551
|
|
|
463,388
|
|
||
Cash and cash equivalents at end of period
|
$
|
424,593
|
|
|
$
|
291,793
|
|
Reconciliation of net income including noncontrolling interests to net cash provided by operating activities:
|
|
|
|
||||
Net income including noncontrolling interests
|
$
|
49,808
|
|
|
$
|
47,675
|
|
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
110,129
|
|
|
105,181
|
|
||
Share-based compensation
|
10,714
|
|
|
9,894
|
|
||
Losses on dispositions of securities
|
329
|
|
|
408
|
|
||
Excess tax benefits from share-based compensation
|
(766
|
)
|
|
(808
|
)
|
||
Changes in fair value of contingent consideration
|
(8,378
|
)
|
|
(1,347
|
)
|
||
Decrease in accounts receivable
|
51,149
|
|
|
14,803
|
|
||
Increase in inventories
|
(28,881
|
)
|
|
(61,580
|
)
|
||
Decrease (increase) in other current assets
|
354
|
|
|
(5,748
|
)
|
||
Increase in accounts payable and other current liabilities
|
39,743
|
|
|
19,272
|
|
||
Decrease in income taxes payable
|
(593
|
)
|
|
(30,710
|
)
|
||
Net decrease/increase in other long-term assets/liabilities
|
9,488
|
|
|
1,546
|
|
||
Net cash provided by operating activities
|
$
|
233,096
|
|
|
$
|
98,586
|
|
•
|
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
|
$
|
—
|
|
|
$
|
8.4
|
|
|
$
|
—
|
|
|
$
|
8.4
|
|
Foreign time deposits
|
14.9
|
|
|
—
|
|
|
—
|
|
|
14.9
|
|
||||
Money market funds
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
||||
Total cash equivalents (a)
|
17.4
|
|
|
8.4
|
|
|
—
|
|
|
25.8
|
|
||||
Available-for-sale investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
—
|
|
|
132.6
|
|
|
—
|
|
|
132.6
|
|
||||
Foreign brokered certificates of deposit
|
—
|
|
|
5.2
|
|
|
—
|
|
|
5.2
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
46.0
|
|
|
—
|
|
|
46.0
|
|
||||
Foreign government obligations
|
—
|
|
|
4.4
|
|
|
—
|
|
|
4.4
|
|
||||
Municipal obligations
|
—
|
|
|
7.8
|
|
|
—
|
|
|
7.8
|
|
||||
Marketable equity securities
|
308.6
|
|
|
—
|
|
|
—
|
|
|
308.6
|
|
||||
Asset-backed securities
|
—
|
|
|
50.1
|
|
|
—
|
|
|
50.1
|
|
||||
Total available-for-sale investments (b)
|
308.6
|
|
|
246.1
|
|
|
—
|
|
|
554.7
|
|
||||
Forward foreign exchange contracts (c)
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||
Total financial assets carried at fair value
|
$
|
326.0
|
|
|
$
|
255.5
|
|
|
$
|
—
|
|
|
$
|
581.5
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Forward foreign exchange contracts (d)
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Contingent consideration (e)
|
—
|
|
|
—
|
|
|
23.1
|
|
|
23.1
|
|
||||
Total financial liabilities carried at fair value
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
23.1
|
|
|
$
|
23.4
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
7.0
|
|
|
$
|
—
|
|
|
$
|
7.0
|
|
Foreign time deposits
|
11.1
|
|
|
—
|
|
|
—
|
|
|
11.1
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
||||
Money market funds
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
||||
Total cash equivalents (a)
|
12.3
|
|
|
8.2
|
|
|
—
|
|
|
20.5
|
|
||||
Available-for-sale investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
—
|
|
|
132.5
|
|
|
—
|
|
|
132.5
|
|
||||
Foreign brokered certificates of deposit
|
—
|
|
|
8.9
|
|
|
—
|
|
|
8.9
|
|
||||
U.S. government sponsored agencies
|
—
|
|
|
39.1
|
|
|
—
|
|
|
39.1
|
|
||||
Foreign government obligations
|
—
|
|
|
5.6
|
|
|
—
|
|
|
5.6
|
|
||||
Municipal obligations
|
—
|
|
|
11.0
|
|
|
—
|
|
|
11.0
|
|
||||
Marketable equity securities
|
325.2
|
|
|
—
|
|
|
—
|
|
|
325.2
|
|
||||
Asset-backed securities
|
—
|
|
|
48.6
|
|
|
—
|
|
|
48.6
|
|
||||
Total available-for-sale investments (b)
|
325.2
|
|
|
245.7
|
|
|
—
|
|
|
570.9
|
|
||||
Forward foreign exchange contracts (c)
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||
Total financial assets carried at fair value
|
$
|
337.5
|
|
|
$
|
254.5
|
|
|
$
|
—
|
|
|
$
|
592.0
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities Carried at Fair Value:
|
|
|
|
|
|
|
|
||||||||
Forward foreign exchange contracts (d)
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
Contingent consideration (e)
|
—
|
|
|
—
|
|
|
20.8
|
|
|
20.8
|
|
||||
Total financial liabilities carried at fair value
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
20.8
|
|
|
$
|
21.9
|
|
(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):
|
|
September 30,
2014 |
|
December 31, 2013
|
||||
Short-term investments
|
$
|
278.0
|
|
|
$
|
277.4
|
|
Other investments
|
276.7
|
|
|
293.5
|
|
||
Total
|
$
|
554.7
|
|
|
$
|
570.9
|
|
(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 Sheets (in millions):
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
Other current liabilities
|
$
|
9.6
|
|
|
$
|
6.1
|
|
Other long-term liabilities
|
13.5
|
|
|
14.7
|
|
||
Total
|
$
|
23.1
|
|
|
$
|
20.8
|
|
|
2014
|
||
January 1
|
$
|
20.8
|
|
Decrease in estimated fair value of contingent consideration included in Selling, general and administrative expense - Cell sorting system
|
(4.9
|
)
|
|
Acquisition of GnuBIO
|
10.7
|
|
|
Decrease in estimated fair value of contingent consideration included in Selling, general and administrative expense - GnuBIO
|
(3.5
|
)
|
|
September 30
|
$
|
23.1
|
|
|
|
|
Range
|
|
|
Valuation Technique
|
Unobservable Input
|
From
|
To
|
Cell sorting system
|
Probability-weighted income approach
|
Sales milestones:
|
|
|
|
|
Credit adjusted discount rates
|
0.82%
|
1.29%
|
|
|
Projected volatility of growth rate
|
20%
|
NA
|
|
|
Market price of risk
|
1.90%
|
N/A
|
GnuBIO
|
Probability-weighted income approach
|
Development/regulatory milestones:
|
|
|
|
|
Cumulative milestones probability
|
50.0%
|
28.1%
|
|
|
Discount Rate
|
0.10%
|
0.54%
|
|
|
|
|
|
|
|
Sales milestones:
|
|
|
|
|
Cumulative milestones probability
|
0.00089%
|
0.00000%
|
|
|
Discount Rate
|
0.98%
|
2.22%
|
|
September 30, 2014
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
132.3
|
|
|
$
|
0.4
|
|
|
$
|
(0.1
|
)
|
|
$
|
132.6
|
|
Foreign brokered certificates of deposit
|
5.2
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
||||
Municipal obligations
|
7.9
|
|
|
—
|
|
|
(0.1
|
)
|
|
7.8
|
|
||||
Asset-backed securities
|
49.8
|
|
|
—
|
|
|
(0.1
|
)
|
|
49.7
|
|
||||
U.S. government sponsored agencies
|
46.0
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
46.0
|
|
||||
Foreign government obligations
|
4.4
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||
Marketable equity securities
|
26.7
|
|
|
5.7
|
|
|
(0.1
|
)
|
|
32.3
|
|
||||
|
272.3
|
|
|
6.2
|
|
|
(0.5
|
)
|
|
278.0
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
Marketable equity securities
|
54.5
|
|
|
221.8
|
|
|
—
|
|
|
276.3
|
|
||||
Asset-backed securities
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||
|
54.9
|
|
|
221.8
|
|
|
—
|
|
|
276.7
|
|
||||
Total
|
$
|
327.2
|
|
|
$
|
228.0
|
|
|
$
|
(0.5
|
)
|
|
$
|
554.7
|
|
|
December 31, 2013
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
132.6
|
|
|
$
|
0.3
|
|
|
$
|
(0.4
|
)
|
|
$
|
132.5
|
|
Foreign brokered certificates of deposit
|
8.9
|
|
|
—
|
|
|
—
|
|
|
8.9
|
|
||||
Municipal obligations
|
11.1
|
|
|
—
|
|
|
(0.1
|
)
|
|
11.0
|
|
||||
Asset-backed securities
|
48.4
|
|
|
0.1
|
|
|
(0.2
|
)
|
|
48.3
|
|
||||
U.S. government sponsored agencies
|
39.1
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
39.1
|
|
||||
Foreign government obligations
|
5.6
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
||||
Marketable equity securities
|
26.6
|
|
|
5.4
|
|
|
—
|
|
|
32.0
|
|
||||
|
272.3
|
|
|
5.9
|
|
|
(0.8
|
)
|
|
277.4
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
Marketable equity securities
|
54.5
|
|
|
238.7
|
|
|
—
|
|
|
293.2
|
|
||||
Asset-backed securities
|
0.4
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.3
|
|
||||
|
54.9
|
|
|
238.7
|
|
|
(0.1
|
)
|
|
293.5
|
|
||||
Total
|
$
|
327.2
|
|
|
$
|
244.6
|
|
|
$
|
(0.9
|
)
|
|
$
|
570.9
|
|
|
September 30,
2014 |
|
December 31, 2013
|
||||
Fair value of investments in a loss position 12 months or more
|
$
|
12.6
|
|
|
$
|
2.3
|
|
Fair value of investments in a loss position less than 12 months
|
$
|
56.8
|
|
|
$
|
73.9
|
|
Gross unrealized losses for investments in a loss position 12 months or more
|
$
|
0.2
|
|
|
$
|
0.1
|
|
Gross unrealized losses for investments in a loss position less than 12 months
|
$
|
0.3
|
|
|
$
|
0.8
|
|
|
Amortized
Cost
|
|
Estimated Fair
Value
|
||||
Mature in less than one year
|
$
|
96.0
|
|
|
$
|
96.1
|
|
Mature in one to five years
|
110.5
|
|
|
110.6
|
|
||
Mature in more than five years
|
39.5
|
|
|
39.4
|
|
||
Total
|
$
|
246.0
|
|
|
$
|
246.1
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
|
Fair Value Hierarchy Level
|
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
|
Fair Value Hierarchy Level
|
||||||||
Other investments
|
$
|
81.6
|
|
|
$
|
367.9
|
|
|
2
|
|
$
|
77.5
|
|
|
$
|
382.9
|
|
|
2
|
Total long-term debt, excluding leases and current maturities
|
$
|
423.4
|
|
|
$
|
452.3
|
|
|
2
|
|
$
|
423.2
|
|
|
$
|
433.0
|
|
|
2
|
|
Life
Science
|
|
Clinical
Diagnostics
|
|
Total
|
||||||
Balances as of January 1, 2014:
|
|
|
|
|
|
||||||
Goodwill
|
$
|
209.0
|
|
|
$
|
337.0
|
|
|
$
|
546.0
|
|
Accumulated impairment losses
|
(27.2
|
)
|
|
(1.0
|
)
|
|
(28.2
|
)
|
|||
Goodwill, net
|
181.8
|
|
|
336.0
|
|
|
517.8
|
|
|||
|
|
|
|
|
|
||||||
Acquisitions
|
—
|
|
|
15.2
|
|
|
15.2
|
|
|||
Currency fluctuations
|
(0.9
|
)
|
|
(18.6
|
)
|
|
(19.5
|
)
|
|||
|
|
|
|
|
|
||||||
Balances as of September 30, 2014:
|
|
|
|
|
|
||||||
Goodwill
|
208.1
|
|
|
333.6
|
|
|
541.7
|
|
|||
Accumulated impairment losses
|
(27.2
|
)
|
|
(1.0
|
)
|
|
(28.2
|
)
|
|||
Goodwill, net
|
$
|
180.9
|
|
|
$
|
332.6
|
|
|
$
|
513.5
|
|
|
September 30, 2014
|
||||||||||||
|
Average
Remaining
Life (years)
|
|
Purchase
Price
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Customer relationships/lists
|
3-11
|
|
$
|
93.2
|
|
|
$
|
(43.1
|
)
|
|
$
|
50.1
|
|
Know how
|
1-11
|
|
188.3
|
|
|
(100.3
|
)
|
|
88.0
|
|
|||
Developed product technology
|
5-13
|
|
106.5
|
|
|
(42.3
|
)
|
|
64.2
|
|
|||
Licenses
|
1-12
|
|
44.2
|
|
|
(24.9
|
)
|
|
19.3
|
|
|||
Tradenames
|
1-10
|
|
4.2
|
|
|
(2.5
|
)
|
|
1.7
|
|
|||
Covenants not to compete
|
5-8
|
|
4.9
|
|
|
(1.1
|
)
|
|
3.8
|
|
|||
Other
|
—
|
|
0.5
|
|
|
(0.5
|
)
|
|
—
|
|
|||
Total definite-lived intangible assets
|
|
|
441.8
|
|
|
(214.7
|
)
|
|
$
|
227.1
|
|
||
In-process research and development
|
|
|
46.4
|
|
|
—
|
|
|
$
|
46.4
|
|
||
Total purchased intangible assets
|
|
|
$
|
488.2
|
|
|
$
|
(214.7
|
)
|
|
$
|
273.5
|
|
|
December 31, 2013
|
||||||||||||
|
Average
Remaining
Life (years)
|
|
Purchase
Price
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Customer relationships/lists
|
1-11
|
|
$
|
99.8
|
|
|
$
|
(41.1
|
)
|
|
$
|
58.7
|
|
Know how
|
2-12
|
|
194.6
|
|
|
(89.3
|
)
|
|
105.3
|
|
|||
Developed product technology
|
1-13
|
|
109.5
|
|
|
(36.2
|
)
|
|
73.3
|
|
|||
Licenses
|
1-12
|
|
44.9
|
|
|
(22.4
|
)
|
|
22.5
|
|
|||
Tradenames
|
1-9
|
|
4.3
|
|
|
(2.1
|
)
|
|
2.2
|
|
|||
Covenants not to compete
|
5-9
|
|
4.9
|
|
|
(0.7
|
)
|
|
4.2
|
|
|||
Other
|
—
|
|
0.6
|
|
|
(0.6
|
)
|
|
—
|
|
|||
Total purchased intangible assets
|
|
|
$
|
458.6
|
|
|
$
|
(192.4
|
)
|
|
$
|
266.2
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Amortization expense
|
$
|
10.9
|
|
|
$
|
11.1
|
|
|
$
|
32.8
|
|
|
$
|
33.5
|
|
January 1, 2014
|
$
|
15.6
|
|
Provision for warranty
|
15.7
|
|
|
Actual warranty costs
|
(15.9
|
)
|
|
September 30, 2014
|
$
|
15.4
|
|
|
September 30,
2014 |
|
December 31, 2013
|
||||
4.875% Senior Notes due 2020, net of discount
|
$
|
423.4
|
|
|
$
|
423.2
|
|
Capital leases and other debt
|
12.6
|
|
|
12.6
|
|
||
|
436.0
|
|
|
435.8
|
|
||
Less current maturities
|
(0.3
|
)
|
|
(0.2
|
)
|
||
Long-term debt
|
$
|
435.7
|
|
|
$
|
435.6
|
|
|
Foreign currency translation adjustments
|
Foreign Other post-employment benefits adjustments
|
Net unrealized holding gains on available-for-sale investments
|
Bio-Rad Accumulated other comprehensive income
|
Non-controlling interests
|
Total Accumulated other comprehensive income
|
||||||||||||
Balances as of January 1, 2014:
|
$
|
189.4
|
|
$
|
(8.1
|
)
|
$
|
159.4
|
|
$
|
340.7
|
|
$
|
—
|
|
$
|
340.7
|
|
Other comprehensive (loss) income, before reclassifications
|
(70.3
|
)
|
0.6
|
|
(16.3
|
)
|
(86.0
|
)
|
—
|
|
(86.0
|
)
|
||||||
Amounts reclassified from Accumulated other comprehensive income
|
—
|
|
0.4
|
|
—
|
|
0.4
|
|
—
|
|
0.4
|
|
||||||
Income tax effects
|
—
|
|
(0.1
|
)
|
6.0
|
|
5.9
|
|
—
|
|
5.9
|
|
||||||
Other comprehensive (loss) income, net of income taxes
|
(70.3
|
)
|
0.9
|
|
(10.3
|
)
|
(79.7
|
)
|
—
|
|
(79.7
|
)
|
||||||
Balances as of September 30, 2014:
|
$
|
119.1
|
|
$
|
(7.2
|
)
|
$
|
149.1
|
|
$
|
261.0
|
|
$
|
—
|
|
$
|
261.0
|
|
|
Foreign currency translation adjustments
|
Foreign Other post-employment benefits adjustments
|
Net unrealized holding gains on available-for-sale investments
|
Bio-Rad Accumulated other comprehensive income
|
Non-controlling interests
|
Total Accumulated other comprehensive income
|
||||||||||||
Balances as of January 1, 2013:
|
$
|
172.9
|
|
$
|
(8.1
|
)
|
$
|
109.7
|
|
$
|
274.5
|
|
$
|
(0.2
|
)
|
$
|
274.3
|
|
Other comprehensive income, before reclassifications
|
5.1
|
|
—
|
|
58.1
|
|
63.2
|
|
—
|
|
63.2
|
|
||||||
Amounts reclassified from Accumulated other comprehensive income
|
(0.2
|
)
|
—
|
|
0.2
|
|
—
|
|
0.2
|
|
0.2
|
|
||||||
Income tax effects
|
—
|
|
—
|
|
(21.4
|
)
|
(21.4
|
)
|
—
|
|
(21.4
|
)
|
||||||
Other comprehensive income, net of income taxes
|
4.9
|
|
—
|
|
36.9
|
|
41.8
|
|
0.2
|
|
42.0
|
|
||||||
Balances as of September 30, 2013:
|
$
|
177.8
|
|
$
|
(8.1
|
)
|
$
|
146.6
|
|
$
|
316.3
|
|
$
|
—
|
|
$
|
316.3
|
|
|
Income before taxes impact (in millions)
|
|
||||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
|
|
||||||||||||
Components of Comprehensive income
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Location
|
||||||||
Amortization of foreign other post-employment benefit items
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
(0.2
|
)
|
|
Selling, general and administrative expense
|
Net holding losses on available-for-sale investments
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
Other (income) expense, net
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Basic weighted average shares outstanding
|
28,884
|
|
|
28,603
|
|
|
28,834
|
|
|
28,545
|
|
Effect of potentially dilutive stock options and restricted stock awards
|
257
|
|
|
—
|
|
|
263
|
|
|
325
|
|
Diluted weighted average common shares
|
29,141
|
|
|
28,603
|
|
|
29,097
|
|
|
28,870
|
|
Anti-dilutive shares
|
117
|
|
|
416
|
|
|
111
|
|
|
95
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Interest and investment income
|
$
|
(0.8
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
(10.0
|
)
|
|
$
|
(10.2
|
)
|
Net realized losses on investments
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.2
|
|
||||
Miscellaneous other expense (income) items, net
|
0.2
|
|
|
(0.1
|
)
|
|
0.3
|
|
|
(0.7
|
)
|
||||
Other (income) expense, net
|
$
|
(0.6
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(9.7
|
)
|
|
$
|
(10.7
|
)
|
|
|
Life
Science
|
|
Clinical
Diagnostics
|
|
Other
Operations
|
||||||
|
|
|
|
|
|
|
||||||
Segment net sales
|
2014
|
$
|
172.8
|
|
|
$
|
354.7
|
|
|
$
|
3.1
|
|
|
2013
|
$
|
162.9
|
|
|
$
|
338.8
|
|
|
$
|
3.4
|
|
|
|
|
|
|
|
|
||||||
Segment net (loss) profit
|
2014
|
$
|
(10.6
|
)
|
|
$
|
47.8
|
|
|
$
|
0.1
|
|
|
2013
|
$
|
(8.5
|
)
|
|
$
|
43.0
|
|
|
$
|
—
|
|
|
|
Life
Science
|
|
Clinical
Diagnostics
|
|
Other
Operations
|
||||||
|
|
|
|
|
|
|
||||||
Segment net sales
|
2014
|
$
|
504.6
|
|
|
$
|
1,062.0
|
|
|
$
|
10.2
|
|
|
2013
|
$
|
489.5
|
|
|
$
|
1,030.2
|
|
|
$
|
10.4
|
|
|
|
|
|
|
|
|
||||||
Segment net (loss) profit
|
2014
|
$
|
(24.5
|
)
|
|
$
|
130.3
|
|
|
$
|
0.4
|
|
|
2013
|
$
|
(28.9
|
)
|
|
$
|
130.6
|
|
|
$
|
0.3
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Total segment profit
|
$
|
37.3
|
|
|
$
|
34.5
|
|
|
$
|
106.2
|
|
|
$
|
102.0
|
|
Foreign currency exchange losses, net
|
(3.7
|
)
|
|
(3.3
|
)
|
|
(6.1
|
)
|
|
(5.7
|
)
|
||||
Net corporate operating, interest and other expense not allocated to segments
|
(11.7
|
)
|
|
(37.1
|
)
|
|
(24.0
|
)
|
|
(39.1
|
)
|
||||
Other income (expense), net
|
0.6
|
|
|
0.7
|
|
|
9.7
|
|
|
10.7
|
|
||||
Consolidated income (loss) before income taxes
|
$
|
22.5
|
|
|
$
|
(5.2
|
)
|
|
$
|
85.8
|
|
|
$
|
67.9
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
45.6
|
|
|
43.7
|
|
|
45.4
|
|
|
44.1
|
|
Gross profit
|
54.4
|
|
|
56.3
|
|
|
54.6
|
|
|
55.9
|
|
Selling, general and administrative expense
|
38.2
|
|
|
40.0
|
|
|
38.1
|
|
|
38.1
|
|
Research and development expense
|
9.9
|
|
|
10.5
|
|
|
10.2
|
|
|
10.1
|
|
Net income (loss) attributable to Bio-Rad
|
2.2
|
|
|
(1.4
|
)
|
|
3.2
|
|
|
3.1
|
|
•
|
an increase of employee-related expenses, including related fringe benefits, temporary help associated with our ERP implementation and commissions,
|
•
|
an accrual of $19.5 million for the first nine months of 2014 compared to an accrual of $16.0 million in the first nine months of 2013 in connection with reaching our final settlement with the SEC and DOJ investigations relating to the FCPA,
|
•
|
an increase in third party commissions, and
|
•
|
an increase in software costs primarily associated with the ERP implementation.
|
•
|
an overall decrease of $7.0 million reflecting the valuations of contingent considerations for the cell sorting system with an overall decrease of $5.5 million compared to 2013, a decrease for GnuBIO of $3.5 million in 2014, offset by a decrease in 2013 of $2.0 million for the Droplet Digital™ PCR,
|
•
|
a decrease in bad debt expense of $4.7 million, primarily in Russia, due to a distributor bad debt in 2013 and improved collections in the U.S. after implementing the first phase of a new ERP system, and
|
•
|
lower external marketing and advertising expenses.
|
•
|
higher cash received from customers primarily due to improved collections, in particular from Spain of approximately $11 million from public agencies in the first quarter of 2014, and in the U.S. after implementing the first phase of a new ERP system,
|
•
|
the absence of interest paid of $25.0 million and $12.0 million associated with a call premium primarily due to the early redemption of the $300.0 million of 8.0% Senior Subordinated Notes on September 30, 2013, and
|
•
|
a decrease in income taxes paid primarily due to a $20 million federal income tax quick refund related to 2013 that was received in the second quarter of 2014, and a $5 million federal income tax extension payment in 2013, partially offset by
|
•
|
more cash paid to suppliers and employees.
|
•
|
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.
|
•
|
the 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;
|
•
|
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, and which may apply to entities like us to the extent that our interactions with customers may affect their billing or coding practices;
|
•
|
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which established new federal crimes for knowingly and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the delivery of or payment for healthcare benefits, items or services;
|
•
|
the federal Health Insurance Portability and Accountability Act of 1996, 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 above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers.
|
•
|
examine our products to determine whether and to what extent the rule applies,
|
•
|
if applicable, perform a reasonable country of origin inquiry to determine whether or not the specified minerals originated from the Democratic Republic of Congo (DRC) or an adjoining country,
|
•
|
if applicable, conduct due diligence regarding the source and chain of custody of the specified minerals, and
|
•
|
file a report annually that includes a description of our process and the results of our efforts.
|
|
At September 30, 2014
|
||
|
(dollars in millions)
|
||
Total debt
|
$
|
437.2
|
|
Total stockholders’ equity
|
$
|
2,176.7
|
|
Debt to equity ratio
|
0.2
|
|
•
|
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:
|
November 7, 2014
|
|
/s/ Norman Schwartz
|
|
|
|
Norman Schwartz, Chairman of the Board,
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date:
|
November 7, 2014
|
|
/s/ Christine A. Tsingos
|
|
|
|
Christine A. Tsingos, Executive Vice President,
|
|
|
|
Chief Financial 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:
|
November 7, 2014
|
|
/s/ Norman Schwartz
|
|
|
|
Norman Schwartz, Chairman of the Board,
|
|
|
|
President and 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:
|
November 7, 2014
|
|
/s/ Christine A.Tsingos
|
|
|
|
Christine A. Tsingos
|
|
|
|
Executive Vice President,
|
|
|
|
Chief Financial Officer
|
(1)
|
the Quarterly Report on Form 10-Q of the Company for the quarter ended
September 30, 2014
(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:
|
November 7, 2014
|
|
/s/ Norman Schwartz
|
|
|
|
Norman Schwartz, Chairman of the Board,
|
|
|
|
President and Chief Executive Officer
|
(1)
|
the Quarterly Report on Form 10-Q of the Company for the quarter ended
September 30, 2014
(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:
|
November 7, 2014
|
|
/s/ Christine A. Tsingos
|
|
|
|
Christine A. Tsingos
|
|
|
|
Executive Vice President,
|
|
|
|
Chief Financial Officer
|