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Biotech / Medical : Bio-Rad Labs: Things are changing -- Ignore unavailable to you. Want to Upgrade?

To: Hamilton Rogers who wrote (16)	4/30/2000 9:58:00 PM
From: Dave Chanoux	Read Replies (1) \| Respond to of 18

I'll make one more post about first quarter earnings to keep this thing alive. Bio-Rad's first quarter earnings report is available. You can read the press release yourself: biz.yahoo.com This news confirms the conclusion drawn from the last quarterly report: The PSD business is marginally profitable. A simplistic comparison of first quarter 2000 with first quarter 1999 finds a 3 percentage point decrease in gross margin from 55.8% to 52.8%. The incremental revenue and gross margin ($57.9M and $26.7M) is at 46.2% gross margin. (This simplistic analysis assumes that the incremental business is attributable to PSD; it is in line with the expect revenue from PSD and prior gross margins). If you know more about this and think I'm all wet, let me know. I'd be happy to have some company on this thread. The top task at hand is to improve the gross margin of the PSD business. That will take some time for in-effect contracts to expire and be renewed (hopefully) at higher gross margin levels. We would expect to see the gross margin on incremental revenue improve as the year goes on to Bio-Rad's traditional levels in the mid 50's. By the end of 2000, the old business should be flushed out and renewed at acceptable margins. While cost reductions are helpful, margin improvements are the key to success in integrating the PSD business. If they are not forthcoming, then it raises questions as the real value of the PSD acquisition. Watch this space next quarter for a progress report. Regards, Dave Chanoux