This story has been updated from a previous version to include comments made during Bio-Rad's earnings call.
NEW YORK (GenomeWeb) – Bio-Rad reported after the close of the market on Thursday that its second quarter revenues fell 2 percent on both a reported and currency-neutral basis.
For the three months ended June 30, Bio-Rad reported $504.7 million in net sales compared to $516.8 million in the year-ago quarter and short of analysts' average estimate of $515.9 million.
Bio-Rad said that the sales decline was largely due to a slowdown in productivity related to the recent launch of the company's global enterprise resource planning (ERP) system in Western Europe, as well as the absence of sales that were pulled forward into the first quarter in anticipation of the ERP deployment.
Life Science segment revenues of $179.4 million were relatively flat year-over-year on a reported basis. Currency-neutral growth of a fraction of a percent was driven primarily by sales of Droplet Digital PCR instruments and reagents, offset by a decline in process chromatography media sales, as well as the aforementioned ERP-related disruption. The Life Science segment also saw some growth from RainDance Technologies, which Bio-Rad acquired in February for approximately $75.2 million.
Clinical Diagnostics segment sales fell 4 percent to $322.1 million year over year on a reported basis, or 3 percent on a currency-neutral basis. These results reflected a substantial slowdown of European sales, especially in infectious disease and immunohematology products, directly related to the ERP-related disruption.
Bio-Rad reported Q2 net income of $5.0 million, or $.17 per share, compared to $18.0 million, or $.61 per share, in the same quarter last year. On average, analysts had expected net income of $.56 per share. During a conference call following the release of the company's earnings, Bio-Rad Executive Vice President and CFO Christine Tsingos noted that excluding expenses associated with certain acquisition-related expenses for new products and technology, Bio-Rad estimates that Q2 net income would have been approximately $15 million and earnings per share would have been approximately $.51, short of Wall Street expectations.
Specifically, in February Bio-Rad launched a new flow cytometer, the ZE5 Cell Analyzer, for the cell biology market, which had an approximately $4 million development milestone expense associated with it. In addition, Bio-Rad incurred a $7.5 million expense for the purchase of what Tsingos called a "promising, early-stage diagnostic device," though she did not elaborate. Finally, the inclusion of RainDance upped Bio-Rad's expenses in Q2.
Taken together, these items caused Bio-Rad's R&D expenses to grow 26 percent to $62.6 million from $49.8 million. Meanwhile, its SG&A expenses rose 4 percent to $213.0 from $205.5 million.
Bio-Rad ended the quarter with $321.6 million in cash and cash equivalents, and $395.8 million in short-term investments.
For full-year 2017, the company continues to anticipate currency-neutral organic sales growth of about 4 percent, which assumes a substantial portion of the lower revenue due to the transition to the ERP system will be recovered by the end of the year. Bio-Rad also said that the addition of the recently acquired RainDance could add another 1 percent of sales growth.
In Tuesday morning trading on the NY Stock Exchange Bio-Rad's stock was down about 7 percent to $224.63.