BIO » Topics » Financial Condition

This excerpt taken from the BIO 10-K filed Mar 1, 2007.

Financial Condition

Bio-Rad operates and conducts business globally, primarily through subsidiary companies established in the markets in which we trade.  Goods are manufactured in a small number of locations, and intermediate or finished products are then shipped for completion and/or distribution to facilities around the globe.  Our product mix is diversified, and certain products compete largely on product efficacy, while others compete on price.  Gross margins are generally sufficient to exceed normal operating costs.  Funding for research and development of new products as well as routine outflows of capital expenditure, repayment of maturing debt and tax expense are covered by cash flow from operations.  We currently operate with a high level of interest coverage and our market capitalization is high relative to our level of debt.  In addition to the strong positive cash flow from operating activities, additional liquidity is readily available via the sale of short-term investments.

At December 31, 2006, we had available $488.1 million in cash, cash equivalents and short-term investments, and $30.1 million under international lines of credit.  Under the $150.0 million restated and amended Revolving Credit Facility, we have $145.6 million available with $4.4 million reserved for standby letters of credit issued by our banks to guarantee our obligations to certain insurance companies.  Management believes that this availability, together with cash flow from operations, will be adequate to meet our current objectives for operations, research and development, capital additions for plant, equipment and systems and an acquisition of moderate proportions

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