Bio-Rad Reports Fourth-Quarter and Full-Year 2023 Financial Results
- Bio-Rad reported a 6.7% decrease in fourth-quarter 2023 net sales compared to the previous year.
- Life Science segment sales dropped by 19.1% in Q4 2023, while Clinical Diagnostics segment sales increased by 5.3%.
- The company's net income for the fourth quarter of 2023 was $349.7 million.
- Full-year 2023 net sales decreased by 4.7% to $2,671.3 million.
- Bio-Rad introduced new products and entered partnerships in 2023.
- The company expects a 1.0 to 2.5% revenue growth for the full year of 2024.
- The decline in Life Science segment sales in Q4 2023 was substantial at 19.1%.
- The net income for the fourth quarter of 2023 saw a significant decrease compared to the same period in 2022.
- Full-year 2023 net sales decreased by 4.7%, indicating a challenging year for Bio-Rad.
- The company's gross margin and operating margin experienced declines in 2023.
- Bio-Rad reported a net loss for the full year of 2023, reflecting financial challenges.
Insights
Examining Bio-Rad Laboratories' financial performance, several key indicators reflect the company's standing. The reported 6.7% decrease in Q4 net sales year-over-year, alongside a 4.7% decline in full-year net sales, suggests a contraction in revenue streams. The reduction in sales is particularly pronounced in the Life Science segment, which experienced a 19.1% decrease in Q4 sales. It's essential to highlight the impact of fluctuating currency values, as the currency-neutral basis shows a slightly larger decrease. This contraction in the Life Science segment could be attributed to a reduction in demand for specific products such as ddPCR, qPCR and Western blotting products, which may raise concerns about the segment's market positioning and competitive dynamics.
Conversely, the Clinical Diagnostics segment displayed resilience with a 5.3% increase in Q4 sales, indicating a diversified portfolio can mitigate broader market volatility. The gross margin contraction from 54.4% to 53.8% in Q4, although modest, may signal pressure on profitability, which is worth monitoring for future trends in cost management and pricing strategies. The net income figures are heavily influenced by changes in the fair market value of equity securities, particularly the company's investment in Sartorius AG, leading to a substantial net income in Q4 2023 but a considerable net loss for the full year. These results underscore the volatility and potential risks associated with investment holdings.
From a tax perspective, the reduced effective tax rate in Q4 2023 compared to the same period in 2022 is noteworthy, reflecting the company's strategic tax planning and geographical earnings mix. Investors should consider the non-GAAP measures provided, which exclude certain items to present a more consistent view of operational performance. However, reliance on non-GAAP measures necessitates careful scrutiny, as they exclude costs that are real and can affect the company's financial health.
The reported earnings of Bio-Rad Laboratories provide insight into the broader life sciences and clinical diagnostics industries. The decrease in demand for certain life science products might reflect a market shift or increased competition within the sector. The decline in COVID-related sales is consistent with the anticipated post-pandemic normalization, but it also highlights the company's challenge to compensate for these high-margin sales with other product lines. The positive performance in the Clinical Diagnostics segment, driven by strong demand for diabetes and quality control products, aligns with the growing emphasis on chronic disease management and preventive care in healthcare.
Looking ahead, the company's 2024 financial outlook suggests cautious optimism, projecting a modest revenue growth of 1.0 to 2.5 percent and an operating margin of 13.5 to 14.0 percent. This outlook may reflect a strategic focus on operational efficiency and a gradual recovery in the biopharma sector. The corporate transformation initiatives mentioned by the CEO indicate a pivot towards streamlining operations, which could enhance competitiveness and profitability in the long term.
Furthermore, the company's product pipeline and collaborations, such as advancements in minimal residual disease research and the introduction of new diagnostic systems and kits, are critical for sustaining growth and innovation. These efforts could potentially open new revenue streams and strengthen market positioning.
From a legal perspective, the mention of a patent dispute settlement and cross-licensing agreement with QIAGEN N.V. is significant. Such agreements can resolve ongoing litigation, reduce future legal expenses and foster a collaborative environment for shared technology use. This particular agreement may have implications for Bio-Rad's intellectual property strategy and could impact its competitive edge in the digital PCR technology space.
Additionally, the company's increased scores in sustainability rankings and improvements in environmental, labor, human rights, health and safety reporting and sustainable procurement practices reflect a growing corporate emphasis on Environmental, Social and Governance (ESG) criteria. This shift is not only ethically important but also increasingly relevant to investors who prioritize responsible corporate behavior in their investment decisions. Enhanced ESG performance can lead to better risk management and potentially more favorable financing conditions.
Fourth-quarter 2023 total net sales were
Life Science segment net sales for the fourth quarter were
Clinical Diagnostics segment net sales for the fourth quarter were
Fourth-quarter gross margin was 53.8 percent compared to 54.4 percent during the fourth quarter of 2022.
Income from operations during the fourth quarter of 2023 was
Net income for the fourth quarter of 2023 was
The effective tax rate for the fourth quarter of 2023 was 18.4 percent, compared to 24.2 percent for the same period in 2022. The tax rates for both periods were driven by the unrealized gain in equity securities. The lower rate in 2023 was primarily driven by a geographical mix of earnings.
“The ongoing weakness in biopharma markets continued to impact our fourth-quarter 2023 results, which were largely in line with expectations,” said Norman Schwartz, Bio-Rad’s President and Chief Executive Officer. “Shifting focus to 2024, our full-year outlook reflects ongoing execution of our corporate transformation initiatives, effective expense management, and a cautiously optimistic view of a gradual biopharma sector recovery in the second half of the year,” Mr. Schwartz continued. “We also recognize the efforts of our global employees, whose ongoing dedication and commitment to our customers’ success helped us navigate the challenges of 2023.”
The non-GAAP financial measures discussed below exclude certain items detailed later in this press release under the heading “Use of Non-GAAP and Currency-Neutral Reporting.” A reconciliation between historical GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this press release.
Non-GAAP gross margin was 54.4 percent for the fourth quarter of 2023 compared to 54.9 percent during the fourth quarter of 2022.
Non-GAAP income from operations during the fourth quarter of 2023 was
Non-GAAP net income for the fourth quarter of 2023 was
The non-GAAP effective tax rate for the fourth quarter of 2023 was 22.4 percent, compared to 28.1 percent for the same period in 2022. The lower rate in 2023 was primarily driven by a geographical mix of earnings and resolution of certain tax positions.
Financial Results Highlights
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A reconciliation between historical GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this press release. We do not provide a reconciliation of our non-GAAP financial expectations to expectations for the most comparable GAAP measure because the amount and timing of many future charges that impact these measures (such as amortization of future acquisition-related intangible assets, future acquisition-related expenses and benefits, future restructuring charges, future asset impairment charges, future valuation changes of equity-owned securities, future gains and losses on equity-method investments or future legal charges or benefits), which could be material, are variable, uncertain, or out of our control and therefore cannot be reasonably predicted without unreasonable effort, if at all.
Full-Year 2023 Results
On a reported basis, net sales for the full year of 2023 decreased 4.7 percent to
COVID-related sales for the full year were approximately
Full-year 2023 reported net sales for the Life Science segment were
Full-year 2023 reported net sales for the Clinical Diagnostics segment were
Full-year 2023 gross margin was 53.4 percent, compared to 55.9 percent in 2022.
Full-year 2023 income from operations was
Net loss for full-year 2023 was
The effective tax rate for the full year of 2023 was 25.0 percent compared to 22.9 percent in 2022. The higher rate in 2023 was primarily driven by unrealized loss in equity securities and geographic mix of earnings.
The non-GAAP financial measures discussed below exclude certain items detailed later in this press release under the heading “Use of Non-GAAP and Currency-Neutral Reporting.” A reconciliation between historical GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this press release.
Non-GAAP gross margin was 54.2 percent for full-year 2023 compared to 56.6 percent for full-year 2022.
Non-GAAP income from operations for the full year of 2023 was
Non-GAAP net income for 2023 was
The non-GAAP effective tax rate for the full year of 2023 was 22.3 percent compared to 22.0 percent in 2022.
Full-Year 2023 Highlights:
-
Full-year 2023 reported net sales of
$2,671.3 million $2,802.2 million - Excluding COVID-related sales, full-year 2023 revenue decreased 0.4 percent year-over-year on a currency-neutral basis.
-
Full-year 2023 reported net loss of
$637.3 million $21.82 $3,627.5 million $121.79 - Advanced minimal residual disease (MRD) research through several industry collaborations leveraging Bio-Rad’s QX600™ Droplet Digital™ PCR System (ddPCR).
- Introduced ddPCR Microsatellite Instability (MSI) Kit and supporting software for oncology applications including cancer tissue and plasma samples.
- Continued to expand libraries of StarBright™ dyes for flow cytometry in immunology research, as well as a portfolio of antibodies for the development of bioanalytical assays used in preclinical and clinical drug development.
- Introduced the CFX Opus Deepwell Dx Real-Time PCR System offering researchers efficient, accurate, and precise quantification to help improve in vitro diagnostic assay development and diagnostic testing.
- Partnered with Element Biosciences to deliver RNA sequencing workflow between Element’s AVITI™ System and Bio-Rad’s SEQuoia™ Express and SEQuoia™ Complete Stranded RNA Library Prep Kits.
- Launched the PTC Tempo 96 and PTC Tempo Deepwell Thermal Cyclers with enhanced usability to support PCR applications in basic and translational research, process development, and quality control.
- Introduced IH-500 NEXT™ fully automated blood typing system with enhanced features for routine blood testing.
- Announced a patent dispute settlement and cross-licensing agreement with QIAGEN N.V. relating to digital PCR technology.
- Published Bio-Rad’s corporate sustainability report for 2022 and saw meaningful improvements in several sustainability rankings based on increased scores in environmental, labor, human rights, health and safety reporting and policy implementation, as well as higher scores on sustainable procurement metrics, reporting, and work with women and minority-owned businesses.
Full-Year 2024 Financial Outlook
Bio-Rad is providing its financial outlook for the full year 2024. The company currently expects non-GAAP, currency-neutral revenue growth of approximately 1.0 to 2.5 percent and an estimated non-GAAP operating margin of approximately 13.5 to 14.0 percent.
Conference Call and Webcast
Management will discuss the company’s fourth quarter and full-year 2023 results, as well as its detailed financial outlook, in a conference call scheduled for 2 PM Pacific Time (5 PM Eastern Time) on February 15, 2024. To participate, dial 888-259-6580 within the
A live webcast of the conference call will also be available in the "Investor Relations" section of the company’s website under "Events & Presentations" at investors.bio-rad.com. A replay of the webcast will be available for up to a year.
Use of Non-GAAP and Currency-Neutral Reporting
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including non-GAAP net income and non-GAAP EPS, which exclude amortization of acquisition-related intangible assets, certain acquisition-related expenses and benefits, restructuring charges, asset impairment charges, gains and losses from change in fair market value of equity securities and loan receivable, gains and losses on equity-method investments, and significant legal-related charges or benefits and associated legal costs. Non-GAAP net income and non-GAAP EPS also exclude certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability, tax provisions/benefits related to the previous items, and significant discrete tax events. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods.
We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operation of our business. We believe that disclosing non-GAAP financial measures provides useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. We also believe that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. More specifically, management adjusts for the excluded items for the following reasons:
Amortization of purchased intangible assets: we do not acquire businesses and assets on a predictable cycle. The amount of purchase price allocated to purchased intangible assets and the term of amortization can vary significantly and are unique to each acquisition or purchase. We believe that excluding amortization of purchased intangible assets allows the users of our financial statements to better review and understand the historic and current results of our operations, and also facilitates comparisons to peer companies.
Acquisition-related expenses and benefits: we incur expenses or benefits with respect to certain items associated with our acquisitions, such as transaction costs, professional fees for assistance with the transaction; valuation or integration costs; changes in the fair value of contingent consideration, gain or loss on settlement of pre-existing relationships with the acquired entity; or adjustments to purchase price. We exclude such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of our on-going business.
Restructuring, impairment charges, and gains and losses from change in fair market value of equity securities and loan receivable, and gains and losses on equity-method investments: we incur restructuring and impairment charges on individual or groups of employed assets and charges and benefits arising from gains and losses from change in fair market value of equity securities and loan receivable, and gains and losses (including impairments) on equity-method investments, which arise from unforeseen circumstances and/or often occur outside of the ordinary course of our on-going business. Although these events are reflected in our GAAP financials, these unique transactions may limit the comparability of our on-going operations with prior and future periods.
Significant litigation charges or benefits and legal costs: we may incur charges or benefits as well as legal costs in connection with litigation and other contingencies unrelated to our core operations. We exclude these charges or benefits, when significant, as well as legal costs associated with significant legal matters, because we do not believe they are reflective of on-going business and operating results.
Income tax expense: we estimate the tax effect of the excluded items identified above to determine a non-GAAP annual effective tax rate applied to the pretax amount in order to calculate the non-GAAP provision for income taxes. We also adjust for items for which the nature and/or tax jurisdiction requires the application of a specific tax rate or treatment.
From time to time in the future, there may be other items excluded if we believe that doing so is consistent with the goal of providing useful information to investors and management.
Percentage sales growth in currency neutral amounts are calculated by translating prior period sales in each local currency using the current period’s monthly average foreign exchange rates for that currency and comparing that to current period sales.
There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact on our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in
BIO-RAD, Droplet Digital, IH-500, SEQuoia, and StarBright, are trademarks of Bio-Rad Laboratories, Inc. in certain jurisdictions.
About Bio-Rad
Bio-Rad Laboratories, Inc. (NYSE: BIO and BIO.B) is a leader in developing, manufacturing, and marketing a broad range of products for the life science research and clinical diagnostics markets. Based in
Forward-Looking Statements
This release may be deemed to contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements we make regarding estimated future financial performance or results; our full-year 2024 outlook reflecting the ongoing execution of our corporate transformation initiatives, effective expense management, and a cautiously optimistic view of a gradual biopharma sector recovery in the second half of 2024; and for the full-year 2024: currently expecting non-GAAP, currency-neutral revenue growth of approximately 1.0 to 2.5 percent and an estimated non-GAAP operating margin of approximately 13.5 to 14.0 percent. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "expect,” "estimate," "anticipate," “target,” "continue," "believe," "will," "project," "assume," "may," "intend," or similar expressions or the negative of those terms or expressions, although not all forward-looking statements contain these words. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. These risks and uncertainties include reductions in government funding or capital spending of our customers, global economic and geopolitical conditions, the uncertain pace of the biopharma sector’s recovery, the challenging macroeconomic environment in
| Bio-Rad Laboratories, Inc. | |||||||||||||||||
| Condensed Consolidated Statements of Income (Loss) | |||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three Months Ended |
Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||||
| Net sales | $ |
681,184 |
|
$ |
730,288 |
|
$ |
2,671,262 |
|
$ |
2,802,249 |
|
|||||
| Cost of goods sold |
|
314,821 |
|
|
333,191 |
|
|
1,244,316 |
|
|
1,234,919 |
|
|||||
| Gross profit |
|
366,363 |
|
|
397,097 |
|
|
1,426,946 |
|
|
1,567,330 |
|
|||||
| Selling, general and administrative expense |
|
207,147 |
|
|
212,227 |
|
|
841,723 |
|
|
827,825 |
|
|||||
| Research and development expense |
|
63,899 |
|
|
66,200 |
|
|
247,427 |
|
|
256,889 |
|
|||||
| Income from operations |
|
95,317 |
|
|
118,670 |
|
|
337,796 |
|
|
482,616 |
|
|||||
| Interest expense |
|
12,361 |
|
|
11,683 |
|
|
49,439 |
|
|
38,114 |
|
|||||
| Foreign currency exchange gains, net |
|
(2,067 |
) |
|
(3,338 |
) |
|
(7,347 |
) |
|
(205 |
) |
|||||
| (Gains) losses from change in fair market value of equity securities and loan receivable |
|
(324,291 |
) |
|
(978,752 |
) |
|
1,252,251 |
|
|
5,193,554 |
|
|||||
| Other income, net |
|
(19,078 |
) |
|
(2,205 |
) |
|
(106,443 |
) |
|
(44,574 |
) |
|||||
| Income (loss) before income taxes |
|
428,392 |
|
|
1,091,282 |
|
|
(850,104 |
) |
|
(4,704,273 |
) |
|||||
| (Provision for) benefit from income taxes |
|
(78,684 |
) |
|
(263,548 |
) |
|
212,780 |
|
|
1,076,738 |
|
|||||
| Net income (loss) | $ |
349,708 |
|
$ |
827,734 |
|
$ |
(637,324 |
) |
$ |
(3,627,535 |
) |
|||||
| Basic earnings (loss) per share: | |||||||||||||||||
| Net income (loss) per basic share | $ |
12.15 |
|
$ |
27.89 |
|
$ |
(21.82 |
) |
$ |
(121.79 |
) |
|||||
| Weighted average common shares - basic |
|
28,792 |
|
|
29,683 |
|
|
29,209 |
|
|
29,785 |
|
|||||
| Diluted earnings (loss) per share: | |||||||||||||||||
| Net income (loss) per diluted share | $ |
12.14 |
|
$ |
27.78 |
|
$ |
(21.82 |
) |
$ |
(121.79 |
) |
|||||
| Weighted average common shares - diluted |
|
28,815 |
|
|
29,792 |
|
|
29,209 |
|
|
29,785 |
|
|||||
| Note: As a result of the net loss for the year ended December 31, 2023 and 2022, | |||||||||||||||||
| all potentially issuable common shares have been excluded from the diluted shares | |||||||||||||||||
| used in the computation of earnings per share as their effect was anti-dilutive. | |||||||||||||||||
| Bio-Rad Laboratories, Inc. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (In thousands) | |||||||
| December 31, | December 31, | ||||||
2023 |
2022 |
||||||
| (Unaudited) | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ |
403,815 |
$ |
434,215 |
|||
| Short-term investments |
|
1,208,887 |
|
1,362,017 |
|||
| Accounts receivable, net |
|
489,017 |
|
494,645 |
|||
| Inventories, net |
|
780,517 |
|
719,316 |
|||
| Other current assets |
|
166,094 |
|
147,783 |
|||
Total current assets |
|
3,048,330 |
|
3,157,976 |
|||
| Property, plant and equipment, net |
|
529,007 |
|
498,612 |
|||
| Operating lease right-of-use assets |
|
194,730 |
|
180,952 |
|||
| Goodwill, net |
|
413,569 |
|
406,488 |
|||
| Purchased intangibles, net |
|
320,514 |
|
332,147 |
|||
| Other investments |
|
7,698,070 |
|
8,830,892 |
|||
| Other assets |
|
94,850 |
|
94,599 |
|||
| Total assets | $ |
12,299,070 |
$ |
13,501,666 |
|||
| Current liabilities: | |||||||
| Accounts payable, accrued payroll and employee benefits | $ |
284,554 |
$ |
329,831 |
|||
| Current maturities of long-term debt |
|
486 |
|
465 |
|||
| Income and other taxes payable |
|
35,759 |
|
32,428 |
|||
| Other current liabilities |
|
202,000 |
|
205,984 |
|||
| Total current liabilities |
|
522,799 |
|
568,708 |
|||
| Long-term debt, net of current maturities |
|
1,199,052 |
|
1,197,716 |
|||
| Other long-term liabilities |
|
1,836,086 |
|
2,119,990 |
|||
| Total liabilities |
|
3,557,937 |
|
3,886,414 |
|||
| Total stockholders' equity |
|
8,741,133 |
|
9,615,252 |
|||
| Total liabilities and stockholders' equity | $ |
12,299,070 |
$ |
13,501,666 |
|||
| Bio-Rad Laboratories, Inc. | ||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||
| (In thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Year Ended | ||||||||||
| December 31, | ||||||||||
|
2023 |
|
|
2022 |
|
|||||
| Cash flows from operating activities: | ||||||||||
| Cash received from customers | $ |
2,684,248 |
|
$ |
2,699,401 |
|
||||
| Cash paid to suppliers and employees |
|
(2,240,486 |
) |
|
(2,408,043 |
) |
||||
| Interest paid, net |
|
(47,489 |
) |
|
(24,435 |
) |
||||
| Income tax payments, net |
|
(129,593 |
) |
|
(158,259 |
) |
||||
| Other operating activities |
|
108,263 |
|
|
85,783 |
|
||||
| Net cash provided by operating activities |
|
374,943 |
|
|
194,447 |
|
||||
| Cash flows from investing activities: | ||||||||||
| Payments for acquisitions |
|
- |
|
|
(100,746 |
) |
||||
| Payments for purchases of marketable securities and investments |
|
(689,041 |
) |
|
(2,060,238 |
) |
||||
| Proceeds from sales and maturities of marketable securities and investments |
|
863,218 |
|
|
1,066,027 |
|
||||
| Other investing activities |
|
(153,969 |
) |
|
(112,636 |
) |
||||
| Net cash provided by (used in) investing activities |
|
20,208 |
|
|
(1,207,593 |
) |
||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from issuance of Notes, net of debt financing costs |
|
- |
|
|
1,186,220 |
|
||||
| Payments on long-term borrowings |
|
(467 |
) |
|
(510 |
) |
||||
| Other financing activities |
|
(425,180 |
) |
|
(212,134 |
) |
||||
| Net cash provided by (used in) financing activities |
|
(425,647 |
) |
|
973,576 |
|
||||
| Effect of foreign exchange rate changes on cash |
|
321 |
|
|
2,981 |
|
||||
| Net decrease in cash, cash equivalents and restricted cash |
|
(30,175 |
) |
|
(36,589 |
) |
||||
| Cash, cash equivalents and restricted cash at beginning of year |
|
434,544 |
|
|
471,133 |
|
||||
| Cash, cash equivalents and restricted cash at end of year | $ |
404,369 |
|
$ |
434,544 |
|
||||
| Reconciliation of net loss to net cash | ||||||||||
| provided by operating activities: | ||||||||||
| Net loss | $ |
(637,324 |
) |
$ |
(3,627,535 |
) |
||||
| Adjustments to reconcile net loss to net cash | ||||||||||
| provided by operating activities: | ||||||||||
| Depreciation and amortization |
|
145,949 |
|
|
137,296 |
|
||||
| Reduction in the carrying amount of right-of-use assets |
|
46,513 |
|
|
39,924 |
|
||||
| Losses from change in fair market value of equity securities and loan receivable |
|
1,252,251 |
|
|
5,193,554 |
|
||||
| Changes in working capital |
|
(143,354 |
) |
|
(407,038 |
) |
||||
| Other |
|
(289,092 |
) |
|
(1,141,754 |
) |
||||
| Net cash provided by operating activities | $ |
374,943 |
|
$ |
194,447 |
|
||||
| Bio-Rad Laboratories, Inc. | |||||||||||||||||||||||||||||
| Reconciliation of GAAP financial measures to non-GAAP financial measures | |||||||||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
| In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including non-GAAP net income and non-GAAP diluted income per share (non-GAAP EPS), which exclude amortization of acquisition-related intangible assets; certain acquisition-related expenses and benefits; restructuring charges; asset impairment charges; gains and losses from change in fair market value of equity securities and loan receivable; gains and losses on equity-method investments; and significant legal-related charges or benefits and associated legal costs. Non-GAAP net income and non-GAAP EPS also exclude certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability, tax provisions/benefits related to the previous items, and significant discrete tax events. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. | |||||||||||||||||||||||||||||
| We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operation of our business. We believe that disclosing non-GAAP financial measures provides useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. We also believe that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. | |||||||||||||||||||||||||||||
| Three Months Ended |
Three Months Ended |
Year Ended | Year Ended | ||||||||||||||||||||||||||
| December 31, | % of | December 31, | % of | December 31, | % of | December 31, | % of | ||||||||||||||||||||||
|
2023 |
|
|
revenue |
|
|
2022 |
|
|
revenue |
|
|
2023 |
|
|
revenue |
|
|
2022 |
|
|
revenue |
|||||||
| GAAP cost of goods sold | $ |
314,821 |
|
$ |
333,191 |
|
$ |
1,244,316 |
|
$ |
1,234,919 |
|
|||||||||||||||||
| Amortization of purchased intangibles |
|
(4,489 |
) |
|
(4,356 |
) |
|
(17,620 |
) |
|
(17,697 |
) |
|||||||||||||||||
| Restructuring benefits (costs) |
|
63 |
|
|
229 |
|
|
(3,859 |
) |
|
(1,059 |
) |
|||||||||||||||||
| Non-GAAP cost of goods sold | $ |
310,395 |
|
$ |
329,064 |
|
$ |
1,222,837 |
|
$ |
1,216,163 |
|
|||||||||||||||||
| GAAP gross profit | $ |
366,363 |
|
53.8 |
% |
$ |
397,097 |
|
54.4 |
% |
$ |
1,426,946 |
|
53.4 |
% |
$ |
1,567,330 |
|
55.9 |
% |
|||||||||
| Amortization of purchased intangibles |
|
4,489 |
|
|
4,356 |
|
|
17,620 |
|
|
17,697 |
|
|||||||||||||||||
| Restructuring (benefits) costs |
|
(63 |
) |
|
(229 |
) |
|
3,859 |
|
|
1,059 |
|
|||||||||||||||||
| Non-GAAP gross profit | $ |
370,789 |
|
54.4 |
% |
$ |
401,224 |
|
54.9 |
% |
$ |
1,448,425 |
|
54.2 |
% |
$ |
1,586,086 |
|
56.6 |
% |
|||||||||
| GAAP selling, general and administrative expense | $ |
207,147 |
|
$ |
212,227 |
|
$ |
841,723 |
|
$ |
827,825 |
|
|||||||||||||||||
| Amortization of purchased intangibles |
|
(1,212 |
) |
|
(1,713 |
) |
|
(6,143 |
) |
|
(7,207 |
) |
|||||||||||||||||
| Legal matters |
|
- |
|
|
(308 |
) |
|
- |
|
|
(2,374 |
) |
|||||||||||||||||
| Acquisition related benefits (costs) |
|
- |
|
|
494 |
|
|
4,100 |
|
|
494 |
|
|||||||||||||||||
| Restructuring benefits (costs) |
|
(851 |
) |
|
(419 |
) |
|
(17,506 |
) |
|
(3,364 |
) |
|||||||||||||||||
| Other non-recurring items (2) |
|
(1,751 |
) |
|
(2,454 |
) |
|
(7,545 |
) |
|
(9,960 |
) |
|||||||||||||||||
| Non-GAAP selling, general and administrative expense | $ |
203,333 |
|
$ |
207,827 |
|
$ |
814,629 |
|
$ |
805,414 |
|
|||||||||||||||||
| GAAP research and development expense | $ |
63,899 |
|
$ |
66,200 |
|
$ |
247,427 |
|
$ |
256,889 |
|
|||||||||||||||||
| Acquisition related benefits (costs) |
|
(400 |
) |
|
- |
|
|
14,000 |
|
|
- |
|
|||||||||||||||||
| Restructuring benefits (costs) |
|
(1,286 |
) |
|
159 |
|
|
(6,579 |
) |
|
(171 |
) |
|||||||||||||||||
| Non-GAAP research and development expense | $ |
62,213 |
|
$ |
66,359 |
|
$ |
254,848 |
|
$ |
256,718 |
|
|||||||||||||||||
| GAAP income from operations | $ |
95,317 |
|
14.0 |
% |
$ |
118,670 |
|
16.2 |
% |
$ |
337,796 |
|
12.6 |
% |
$ |
482,616 |
|
17.2 |
% |
|||||||||
| Amortization of purchased intangibles |
|
5,701 |
|
|
6,069 |
|
|
23,763 |
|
|
24,904 |
|
|||||||||||||||||
| Legal matters |
|
- |
|
|
308 |
|
|
- |
|
|
2,374 |
|
|||||||||||||||||
| Acquisition related (benefits) costs |
|
400 |
|
|
(494 |
) |
|
(18,100 |
) |
|
(494 |
) |
|||||||||||||||||
| Restructuring (benefits) costs |
|
2,074 |
|
|
31 |
|
|
27,944 |
|
|
4,594 |
|
|||||||||||||||||
| Other non-recurring items (2) |
|
1,751 |
|
|
2,454 |
|
|
7,545 |
|
|
9,960 |
|
|||||||||||||||||
| Non-GAAP income from operations | $ |
105,243 |
|
15.5 |
% |
$ |
127,038 |
|
17.4 |
% |
$ |
378,948 |
|
14.2 |
% |
$ |
523,954 |
|
18.7 |
% |
|||||||||
| GAAP (gains) losses from change in fair market value of equity securities and loan receivable | $ |
(324,291 |
) |
$ |
(978,752 |
) |
$ |
1,252,251 |
|
$ |
5,193,554 |
|
|||||||||||||||||
| Gains (losses) from change in fair market value of equity securities and loan receivable |
|
324,291 |
|
|
978,752 |
|
|
(1,252,251 |
) |
|
(5,193,554 |
) |
|||||||||||||||||
| Non-GAAP (gains) losses from change in fair market value of equity securities and loan receivable | $ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
|||||||||||||||||
| GAAP other (income) expense, net | $ |
(19,078 |
) |
$ |
(2,205 |
) |
$ |
(106,443 |
) |
$ |
(44,574 |
) |
|||||||||||||||||
| Gains (losses) on equity-method investments |
|
(965 |
) |
|
(16,133 |
) |
|
(3,508 |
) |
|
(25,310 |
) |
|||||||||||||||||
| Other non-recurring items (3) |
|
- |
|
|
- |
|
|
2,500 |
|
|
1,360 |
|
|||||||||||||||||
| Non-GAAP other (income) expense, net | $ |
(20,043 |
) |
$ |
(18,338 |
) |
$ |
(107,451 |
) |
$ |
(68,524 |
) |
|||||||||||||||||
| GAAP income (loss) before income taxes | $ |
428,392 |
|
$ |
1,091,282 |
|
$ |
(850,104 |
) |
$ |
(4,704,273 |
) |
|||||||||||||||||
| Amortization of purchased intangibles |
|
5,701 |
|
|
6,069 |
|
|
23,763 |
|
|
24,904 |
|
|||||||||||||||||
| Legal matters |
|
- |
|
|
308 |
|
|
- |
|
|
2,374 |
|
|||||||||||||||||
| Acquisition related (benefits) costs |
|
400 |
|
|
(494 |
) |
|
(18,100 |
) |
|
(494 |
) |
|||||||||||||||||
| Restructuring (benefits) costs |
|
2,074 |
|
|
31 |
|
|
27,944 |
|
|
4,594 |
|
|||||||||||||||||
| (Gains) losses from change in fair market value of equity securities and loan receivable |
|
(324,291 |
) |
|
(978,752 |
) |
|
1,252,251 |
|
|
5,193,554 |
|
|||||||||||||||||
| (Gains) losses on equity-method investments |
|
965 |
|
|
16,133 |
|
|
3,508 |
|
|
25,310 |
|
|||||||||||||||||
| Other non-recurring items (2) (3) |
|
1,751 |
|
|
2,454 |
|
|
5,045 |
|
|
8,600 |
|
|||||||||||||||||
| Non-GAAP income before income taxes | $ |
114,992 |
|
$ |
137,031 |
|
$ |
444,307 |
|
$ |
554,569 |
|
|||||||||||||||||
| GAAP (provision for) benefit from income taxes | $ |
(78,684 |
) |
$ |
(263,548 |
) |
$ |
212,780 |
|
$ |
1,076,738 |
|
|||||||||||||||||
| Income tax effect of non-GAAP adjustments (1) |
|
52,972 |
|
|
225,007 |
|
|
(311,854 |
) |
|
(1,198,728 |
) |
|||||||||||||||||
| Non-GAAP provision for income taxes | $ |
(25,712 |
) |
$ |
(38,541 |
) |
$ |
(99,074 |
) |
$ |
(121,990 |
) |
|||||||||||||||||
| GAAP net income (loss) | $ |
349,708 |
|
51.3 |
% |
$ |
827,734 |
|
113.3 |
% |
$ |
(637,324 |
) |
-23.9 |
% |
$ |
(3,627,535 |
) |
-129.5 |
% |
|||||||||
| Amortization of purchased intangibles |
|
5,701 |
|
|
6,069 |
|
|
23,763 |
|
|
24,904 |
|
|||||||||||||||||
| Legal matters |
|
- |
|
|
308 |
|
|
- |
|
|
2,374 |
|
|||||||||||||||||
| Acquisition related (benefits) costs |
|
400 |
|
|
(494 |
) |
|
(18,100 |
) |
|
(494 |
) |
|||||||||||||||||
| Restructuring (benefits) costs |
|
2,074 |
|
|
31 |
|
|
27,944 |
|
|
4,594 |
|
|||||||||||||||||
| (Gains) losses from change in fair market value of equity securities and loan receivable |
|
(324,291 |
) |
|
(978,752 |
) |
|
1,252,251 |
|
|
5,193,554 |
|
|||||||||||||||||
| (Gains) losses on equity-method investments |
|
965 |
|
|
16,133 |
|
|
3,508 |
|
|
25,310 |
|
|||||||||||||||||
| Other non-recurring items (2) (3) |
|
1,751 |
|
|
2,454 |
|
|
5,045 |
|
|
8,600 |
|
|||||||||||||||||
| Income tax effect of non-GAAP adjustments (1) |
|
52,972 |
|
|
225,007 |
|
|
(311,854 |
) |
|
(1,198,728 |
) |
|||||||||||||||||
| Non-GAAP net income | $ |
89,280 |
|
13.1 |
% |
$ |
98,490 |
|
13.5 |
% |
$ |
345,233 |
|
12.9 |
% |
$ |
432,579 |
|
15.4 |
% |
|||||||||
| GAAP diluted income (loss) per share | $ |
12.14 |
|
$ |
27.78 |
|
$ |
(21.82 |
) |
$ |
(121.79 |
) |
|||||||||||||||||
| Amortization of purchased intangibles |
|
0.20 |
|
|
0.20 |
|
|
0.81 |
|
|
0.83 |
|
|||||||||||||||||
| Legal matters |
|
- |
|
|
0.01 |
|
|
- |
|
|
0.08 |
|
|||||||||||||||||
| Acquisition related (benefits) costs |
|
0.01 |
|
|
(0.02 |
) |
|
(0.62 |
) |
|
(0.02 |
) |
|||||||||||||||||
| Restructuring (benefits) costs |
|
0.07 |
|
|
- |
|
|
0.95 |
|
|
0.15 |
|
|||||||||||||||||
| (Gains) losses from change in fair market value of equity securities and loan receivable |
|
(11.25 |
) |
|
(32.85 |
) |
|
42.71 |
|
|
173.12 |
|
|||||||||||||||||
| (Gains) losses on equity-method investments |
|
0.03 |
|
|
0.54 |
|
|
0.12 |
|
|
0.84 |
|
|||||||||||||||||
| Other non-recurring items (2) (3) |
|
0.06 |
|
|
0.08 |
|
|
0.17 |
|
|
0.29 |
|
|||||||||||||||||
| Income tax effect of non-GAAP adjustments (1) |
|
1.84 |
|
|
7.57 |
|
|
(10.62 |
) |
|
(39.95 |
) |
|||||||||||||||||
| Add back anti-dilutive shares |
|
- |
|
|
- |
|
|
0.08 |
|
|
0.87 |
|
|||||||||||||||||
| Non-GAAP diluted income per share | $ |
3.10 |
|
$ |
3.31 |
|
$ |
11.78 |
|
$ |
14.42 |
|
|||||||||||||||||
| GAAP diluted weighted average shares used in per share calculation |
|
28,815 |
|
|
29,792 |
|
|
29,209 |
|
|
29,785 |
|
|||||||||||||||||
| Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive |
|
- |
|
|
- |
|
|
110 |
|
|
215 |
|
|||||||||||||||||
| Non-GAAP diluted weighted average shares used in per share calculation |
|
28,815 |
|
|
29,792 |
|
|
29,319 |
|
|
30,000 |
|
|||||||||||||||||
| Reconciliation of Net income (loss) to adjusted EBITDA: | |||||||||||||||||||||||||||||
| GAAP net income (loss) | $ |
349,708 |
|
51.3 |
% |
$ |
827,734 |
|
113.3 |
% |
$ |
(637,324 |
) |
-23.9 |
% |
$ |
(3,627,535 |
) |
-129.5 |
% |
|||||||||
| Interest expense |
|
12,361 |
|
|
11,683 |
|
|
49,439 |
|
|
38,114 |
|
|||||||||||||||||
| (Provision for) benefit from income taxes |
|
78,684 |
|
|
263,548 |
|
|
(212,780 |
) |
|
(1,076,738 |
) |
|||||||||||||||||
| Depreciation and amortization |
|
37,225 |
|
|
35,514 |
|
|
145,949 |
|
|
137,296 |
|
|||||||||||||||||
| Foreign currency exchange gains, net |
|
(2,067 |
) |
|
(3,338 |
) |
|
(7,347 |
) |
|
(205 |
) |
|||||||||||||||||
| Other income, net |
|
(19,078 |
) |
|
(2,205 |
) |
|
(106,443 |
) |
|
(44,574 |
) |
|||||||||||||||||
| (Gains) losses from change in fair market value of equity securities and loan receivable |
|
(324,291 |
) |
|
(978,752 |
) |
|
1,252,251 |
|
|
5,193,554 |
|
|||||||||||||||||
| Dividend from Sartorius AG |
|
- |
|
|
- |
|
|
34,766 |
|
|
31,586 |
|
|||||||||||||||||
| Legal matters |
|
- |
|
|
308 |
|
|
- |
|
|
2,374 |
|
|||||||||||||||||
| Acquisition related (benefits) costs |
|
400 |
|
|
(494 |
) |
|
(18,100 |
) |
|
(494 |
) |
|||||||||||||||||
| Restructuring (benefits) costs |
|
2,074 |
|
|
31 |
|
|
27,944 |
|
|
4,594 |
|
|||||||||||||||||
| Other non-recurring items (2) |
|
1,751 |
|
|
2,454 |
|
|
7,545 |
|
|
9,960 |
|
|||||||||||||||||
| Adjusted EBITDA | $ |
136,767 |
|
20.1 |
% |
$ |
156,483 |
|
21.4 |
% |
$ |
535,900 |
|
20.1 |
% |
$ |
667,932 |
|
23.8 |
% |
|||||||||
| (1) Excluded items identified in the reconciliation schedule are tax effected by application of a non-GAAP effective tax rate. The non-GAAP tax provision is adjusted for items, the nature of which and/or tax jurisdiction requires the application of a specific tax rate or treatment. | |||||||||||||||||||||||||||||
| (2) Incremental costs to comply with the European Union's In Vitro Diagnostics Regulation ("IVDR") for previously approved products. | |||||||||||||||||||||||||||||
| (3) Gain from the release of an escrow for the acquisition in 2021 (2023) and for the sale of a division in 2020 (2022). | |||||||||||||||||||||||||||||
| 2024 Financial Outlook | |||||||||||||||||||||||||||||
| Forecasted non-GAAP operating margin excludes 87 basis points related to amortization of purchased intangibles. Forecasted non-GAAP operating margin does not reflect future gains and charges that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance, such as foreign currency fluctuations, future gains or losses associated with certain legal matters, acquisitions and restructuring activities. | |||||||||||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240215568596/en/
Investor Contact:
Edward Chung, Investor Relations
510-741-6104
ir@bio-rad.com
Media Contact:
Anna Gralinska, Corporate Communications
510-741-6643
cc@bio-rad.com
Source: Bio-Rad Laboratories, Inc.
FAQ
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