Bio-Rad Laboratories, Inc. (NYSE:BIO.B) Q1 2016 Earnings Conference Call - Preliminary Transcript

May 05, 2016 • 05:00 pm ET


Bio-Rad Laboratories, Inc. (NYSE:BIO.B) Q1 2016 Earnings Conference Call - Preliminary Transcript


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Good day, ladies and gentlemen, and welcome to the Bio-Rad Laboratories, Incorporated Q1 2016 Earnings Conference Call. At this time all participants are in a listen-only mode, later we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I'd now like to turn the conference over to Ron Hutton. You may begin.

Ronald W. Hutton

Thank you, Karan. Before we begin the call, I would like to caution everyone that we will be making forward-looking statements about management's goals, plans and expectations, our future financial performance and other matters. Because our actual results may differ materially from these plans and expectations, you should not place undue reliance on these forward-looking statements and I encourage you to review our filings with the SEC, where we discuss in detail the risk factors in our business. The company does not intend to update any forward-looking statements made during the call today.

With that, I'd like to turn over the call to Christine Tsingos, Executive Vice President and Chief Financial Officer.

Christine A. Tsingos

Thanks, Ron. Good afternoon, everyone. And thank you for joining us. With me today are Norman Schwartz, John Goetz, Shannon Hall, President of our Life Science Group; and John Hertia, President of our Diagnostics Group.

Net sales for the first quarter of 2016 were $471.2 million,

A slight decrease versus the same period last year's sales of $472.8 million.This decline reflects the continued strong currency headwinds, which represented a negative impact on sales of nearly $20 million.On a currency neutral basis, sales increased 3.9%.

During the quarter, we experienced good currency neutral growth across many of our key market and product areas, most notably in our life science segment, as well as certain products and markets in our diagnostic segment. Sales growth in the quarter was somewhat tempered by continued weakness in the European diagnostic market, as well as challenges in the Eastern European region, both of which posted a decline in currency neutral sales versus last year.

Offsetting these tepid regions with solid growth in the US, Asia Pacific and selected emerging markets. The reported gross margin for the first quarter was in line with expectations at 56% compared to 57.1% last year. The current quarter margin is the result of good product mix, partially offset by increased costs. The higher margin in the first quarter of last year reflected sizable, favorable manufacturing variances during that period, making the first quarter of this year a bit tough to compare.

Amortization expense related to acquisitions recorded in cost of goods sold was higher at $7.2 million, which compares to $6.8 million in the first quarter of last year. The increase in amortization relates to the newly acquired flow cytometry technology for the cell biology market.

SG&A expenses for the first quarter were up slightly at $189.7 million or 40.3% of sales compared to $188.6 million or 39.9% of sales last year. When compared to last year, SG&A expense during the quarter