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Bio-Rad's Q4 Revenues Decline as Life Science Sales Slump

NEW YORK (GenomeWeb News) – Bio-Rad Laboratories reported after the close of the market on Thursday that its fourth-quarter revenues decreased 2.6 percent — but increased 3 percent on a currency-neutral basis — as sales for its life science business segment slumped nearly 8 percent.

The firm generated revenues of $448 million for the three-month period ended Dec. 31, compared to revenues of $459.7 million for the fourth quarter of 2008. The life science segment had revenues of $170.3 million for the quarter, while the clinical diagnostics segment had sales of $274 million, up 1 percent year over year.

Bio-Rad said that the life science business was "negatively impacted during the quarter by a drop in capital instrument sales, reflecting cutbacks by both academic and biopharmaceutical customers."

Bard Crutchfield, Bio-Rad's general manager of the life science business segment, said during the firm's conference call that the firm's process chromatography business was particularly affected by cutbacks in spending on capital equipment.

The firm posted a Q4 net loss of $8.2 million, or $.30 per share, compared to a profit of $12.4 million, or $.45 per share, for the fourth quarter of 2007. The primary reason for the loss was a charge of $28.8 million for the impairment of goodwill and purchased intangibles and $6.2 million for impairment of investments.

During the conference call, CFO Christine Tsingos said the charges were related to the firm's 1999 acquisition of Sanofi Diagnostics Pasteur and the subsequent decline in revenues from its bovine spongiform encephalopathy test, which had been a moneymaker but became a drag on Bio-Rad over the past several years.

The company's R&D costs increased 3 percent to $41.1 million from $39.9 million year over year, while its SG&A spending fell 5 percent to $154.5 million from $163 million.

For full-year 2008, Bio-Rad's revenues rose nearly 21 percent to $1.76 billion from $1.46 billion. Life science segment sales increased around 5 percent to $643.5 million, while clinical diagnostics sales increased 33 percent to $1.1 million, due primarily to the acquisition of DiaMed in the fourth quarter of 2007.

Bio-Rad's profit for the year was $89.5 million, or $3.25 per share, down from $93 million, or $3.41 per share, for full-year 2007.

The firm's R&D costs for the year rose nearly 14 percent to $159.5 million from $140.5 million, while its SG&A spending increased 16 percent to $591.3 million from $508 million.

Bio-Rad finished the quarter with $204.5 million in cash and cash equivalents, and around $39 million in short-term investments.

Bio-Rad President and CEO Norman Schwartz said in a statement that the firm is "approaching 2009 with caution. The economic environment could make growth for this year challenging."

Tsingos said in the call that the firm's goal is to grow organic sales in the low- to mid-single digits in 2009. "However, with more than 60 percent of our business outside of the US, foreign currency translation could easily wipe out that growth on a reported basis resulting in a year over year decline in sales and income," she said.