Bio-Rad Laboratories Incorporated (BIO)

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Bio-Rad Laboratories, Inc. Q4 2007 Earnings Call Transcript

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Christine A. Tsingos, Chief Financial Officer, Vice President

Today we will review the fourth quarter and full-year financial results for 2007, the impact of our DiaMed acquisition, as well as provide some insight into our thinking for 2008. We know this is a lot of information and I’ll do my best to walk through it slowly.

Let’s start with a review of the quarterly results. Net sales for the fourth quarter of fiscal 2007 were $459.7 million, an increase of more than 28% versus the year-ago period sales of $343.1 million. These quarterly sales include approximately $62 million contributed by the DiaMed business.

Excluding DiaMed, sales in the fourth quarter grew 16% compared to last year, to $397.7 million. On an organic, currency-neutral basis, sales for the quarter grew 9%. This strong year-over-year growth was fueled by solid performance in both Life Sciences and Clinical Diagnostics.

During the quarter we posted record sales with in our Life Sciences group. This growth was the result of increased sales of Protein Expression, amplification and processed chromatography products. Diagnostics also posted a record quarter even before the inclusion of DiaMed which is a reflection of strong performance in blood virus, clinical systems and quality control.

Consolidated gross margin for the quarter was a reported 50.8% which includes more then $3 million of amortization expense related to the DiaMed transaction and another $3 million of foregone profit margin as required under purchase accounting. The gross margin for the base Bio-Rad business came in as expected at 53.4% as product mix in our fourth quarter typically shifts toward lower margin instrument sales.

SG&A expense for the fourth quarter was $163 million or 35.5% of sales. This represents a significant increase from just last quarter but it is important to note that the inclusion of DiaMed in our consolidated results constitutes more than $20 million of that increase. In addition approximately $2 million of amortization expense related to the deal, $8 million of negative foreign currency affect and increased selling costs, commissions and bonuses associated with the strong top-line growth also contributed to this sequential rise...(cont'd)

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