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Bio-Rad Reports 1 Percent Uptick in Q3 Revenues

NEW YORK (GenomeWeb News) — Bio-Rad Laboratories reported after the close of the market Thursday a 1 percent year-over-year increase in third quarter revenues, as its profit swung to a net loss of $7.1 million.

For the three months ended Sept. 30, Bio-Rad reported revenues of $505.1 million compared to $498.7 million in the same quarter a year ago. These results included $5.5 million of sales resulting from the company's acquisition of AbD Serotec in January. On a currency neutral basis, quarterly revenues increased just shy of 2 percent compared to the year-ago period.

Revenues for the quarter fell well short of the consensus Wall Street estimate of $529 million.

Bio-Rad's Life Science business segment recorded sales of $162.9 million, down around 3 percent compared to Q3 2012. On a currency-neutral basis, Life Science segment sales decreased 1 percent.

Results in the Life Science segment reflected continued slowness in the research spending environment, offset partially by sales of antibodies and reagents from AbD Serotec, as well as sales of biochromatography and cell-sorting instruments, the company said.

"Sales of our life science products continued to be hampered by constraints in the global academic and government spending environment, partially offset by good demand for our new cell-sorting and chromatography instruments and the acquired [Serotec] antibody business," CFO Christine Tsingos said during the company's Q3 earnings call.

"Despite the success of our new products, organic currency-neutral growth for Life Science declined 4.4 percent for the quarter, reflecting flat to down sales in nearly all regions," Tsingos added. "It is also worth mentioning that our recent Life Science sales performance has also been tempered by changes we are currently making in our distribution network in China, which should better position us for growth in the future."

The Clinical Diagnostics segment, meantime, recorded sales of $338.8 million, an increase of 3 percent over the year-ago period on both a reported and currency-neutral basis.

Bio-Rad's Q3 net loss was $7.1 million, or $.25 per share, compared to a profit of $42.6 million, or $1.49 per share, in Q3 2012. The company said that these results were attributable to an interest expense associated with the redemption of bonds in the quarter, as well as an accrued expense of $20 million in connection with efforts to resolve a previously disclosed investigation of the company in connection with the United States Foreign Corrupt Practices Act.

The firm's R&D spending increased 11 percent year over year to $52.9 million from $47.8 million, while its SG&A expenses jumped 26 percent to $202.2 million from $160.1 million. The higher SG&A expenses were primarily due to employee expenses associated with acquisitions, the company said.

Bio-Rad finished the quarter with $291.8 million in cash and cash equivalents and $270 million in short-term investments.

On Bio-Rad's Q2 earnings call, company executives had provided guidance of currency-neutral revenue growth in the range of 3 to 3.5 percent for the base business, and 3.5 to 4 percent including Serotec.

"We also told you that any further deterioration in Europe, or funding in the academic and government research markets, could make our goals difficult to achieve," Tsingos said during Thursday's call. "Given our year-to-date currency-neutral growth of about 2 percent for the base business, and 3.1 percent including Serotec, and combined with the continued European challenges and constrained funding environment, we now believe the full-year currency-neutral sales growth for 2013 will likely remain in that same 2 to 3 percent range we have experienced so far this year."