bioMerieux S.A. (bioMerieux), a vitro infectious disease diagnostics company, has reported net sales of EUR1.1 billion for the full year of 2008, up 4.5%, compared with the net sales of EUR1 billion in the year-ago period. It has posted net income of EUR130 million, or EUR3.29 per share, for the full year of 2008, compared with the net income of EUR98.1 million, or EUR2.48 per share, in the year-ago period.
Gross margin stood at 53.4% of net sales, versus 53.2% in 2007, while gross profit amounted to EUR593 million compared with EUR566 million the year before. The improvement was mainly led by higher reagent sales, which offset the unfavorable currency effect, higher transportation costs and the increase in royalty payments. Gross profit was also lifted by the fact that average selling prices held firm over the year, as well as the Company’s continued actions to reduce the costs of non-quality and improve productivity.
Selling, general and administrative expenses amounted to EUR286 million and represented 25.8% of sales, compared with 26.1% in 2007.
Research and development expenses rose to EUR132.7 million, or 12% of sales, but the increase was limited by the decline in the dollar against the euro and the booking of grants covering expenditures committed over the past two years as part of the ADNA program. The company expects to maintain its research budget at between 12 and 13% of sales. In 2009, R&D outlays will include the ramp-up of the ADNA program and increased spending on the VIDAS range in France. They will also cover bioTheranostics’ expenditures over twelve months. On the other hand, development work on the VIDIA® range will be scaled back.
Royalties from the patent portfolio rose to EUR12.3 million, comprising in particular a E3.8 million royalty payment from Becton Dickinson (versus EUR5.7 million in 2007) and a variety of other non-recurring royalties totaling an aggregate E3 million. The recurring royalty payments for the BOOM and NASBA® technologies, most of whose patents expire in 2010, amounted to nearly E3 million for the year.
Operating income before non-recurring items rose by nearly 12% to EUR187 million, representing 16.8% of sales.
Operating income amounted to EUR186 million, a 24% increase on the EUR150 million reported in 2007, when it included a E28.5 million provision for closure of the Boxtel plant, partially offset by a EUR11.4 million reversal of the provision on the D.B.V. dispute. In 2008, the operating income was reduced by the EUR1.3 million cost of transferring Boxtel’s operations to facilities in Grenoble, Marcy l’Etoile and Shanghai, a non-recurring expense that is expected to total about E11 million in 2009.
Net financial expense stood at EUR3.3 million for year. In 2007, financial expense was offset by the EUR3.3 million pre-tax capital gain realized on the sale of the OPi shares.
Income tax expense amounted to EUR51.5 million, or 28.2% of pretax income, versus 35.6% in 2007.
France’s new research tax credit plan, in effect since 2008, reduced tax expense by EUR7.4 million compared with 2007, reflecting the significant amount of R&D expenditures made by the French sites during the year. To benefit from this favorable environment, in 2009 there will bean increase in research programs conducted in France.
The year also benefited from nearly EUR5 million in non-recurring items related to the restructuring of bioMérieux Japan and the favorable outcome of a tax audit in the United States. Excluding these items, the effective tax rate for the year would have been 30.7%. The tax rate was higher in 2007 because the provision for the closure of the Boxtel plant gave rise only to a partial tax savings.