Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb), a global leader
of life science research and clinical diagnostic products, today
announced financial results for the first quarter ended March 31,
2021.
First-quarter 2021 net sales were $726.8 million, an increase of
27.1 percent compared to $571.6 million reported for the first
quarter of 2020. On a currency-neutral basis, quarterly sales
increased 23.4 percent compared to the same period in 2020.
First-quarter gross margin was 55.1 percent compared to 55.5
percent during the first quarter in 2020.
Life Science segment net sales for the first quarter were $366.5
million, an increase of 61.3 percent compared to the same period in
2020. On a currency-neutral basis, Life Science segment sales
increased by 56.9 percent compared to the same quarter in 2020.
Currency-neutral sales increased across most of our core life
science research product lines but were primarily driven by growth
in our qPCR, Western Blotting, Droplet Digital PCR, and Process
Media products. A significant portion of the Life Science segment
growth came from products used to support COVID-19 research and
testing. All regions experienced double digit currency-neutral
sales growth compared to the same quarter last year.
Clinical Diagnostics segment net sales for the first quarter
were $358.5 million, an increase of 5.4 percent compared to the
same period in 2020. On a currency-neutral basis, net sales were up
2.2 percent versus the same quarter last year. The currency-neutral
sales increase was primarily driven by our Diabetes and Quality
Controls products, primarily in the Asia Pacific region.
Income from operations during the first quarter of 2021 was
$100.9 million versus $74.4 million during the same quarter last
year.
Net income for the first quarter of 2021 was $977.4 million, or
$32.38 per share, on a diluted basis, versus $685.9 million, or
$22.72 per share, on a diluted basis, during the same period in
2020. Net income for the first quarter of 2021 and 2020 was
impacted by the recognition of changes in the fair market value of
equity securities, primarily related to the holdings of our
investment in Sartorius AG. The effective tax rate for the first
quarter of 2021 was 24.7 percent, compared to 23.7 percent for the
same period in 2020. The tax rates for both periods were driven by
the large unrealized gain in equity securities.
“We are pleased with our overall results for the first quarter
that reflect strength in many of our core product areas and
regions,” said Norman Schwartz, Bio-Rad President and Chief
Executive Officer. “As we have anticipated, some of our markets
continue to be affected by the COVID-19 pandemic and not operating
at full capacity, although we are beginning to see a gradual
improvement in our end-markets. We expect that momentum to continue
as the year progresses,” he said.
GAAP Results
Q1 2021
Q1 2020
Revenue (millions)
$726.8
$571.6
Gross margin
55.1%
55.5%
Operating margin
13.9%
13.0%
Net income (millions)
$977.4
$685.9
Income per diluted share
$32.38
$22.72
Non-GAAP Results
Q1 2021
Q1 2020
Gross margin
59.0%
55.9%
Operating margin
25.8%
13.9%
Net income (millions)
$157.4
$57.6
Income per diluted share
$5.21
$1.91
A reconciliation between GAAP operating results and non-GAAP
operating results is provided following the financial statements
that are part of this press release. Non-GAAP adjustments include
amortization of purchased intangibles; acquisition-related expenses
and benefits; restructuring, impairment charges and valuation
changes in equity-owned securities; gains and losses on
equity-method investments; significant litigation charges or
benefits and legal costs; and discrete income tax events and the
income tax effect on these non-GAAP adjustments.
Non-GAAP net income and non-GAAP diluted income per share
(non-GAAP EPS) are non-GAAP measures that exclude certain items
detailed later in this press release under the heading “Non-GAAP
Reporting.”
Non-GAAP net income for the first quarter of 2021 was $157.4
million, or $5.21 per share, on a diluted basis, compared to $57.6
million, or $1.91 per share, on a diluted basis, during the same
period in 2020.
The non-GAAP effective tax rate for the first quarter of 2021
was 23.6 percent, compared to 25.7 percent for the same period in
2020.
The following table represents a reconciliation of Bio-Rad’s
reported net income and diluted income per share to non-GAAP net
income and non-GAAP diluted income per share for the three months
March 31, 2021 and 2020:
Three Months Ended
March 31,
(in thousands, except per share data)
2021
2020
GAAP net income
$
977,414
$
685,912
Amortization of purchased intangibles
6,940
5,855
Legal matters
3,879
1,833
Acquisition related benefits
-
(47
)
Restructuring costs (benefits)
75,565
(2,368
)
Valuation gain on equity-owned
securities
(1,179,403
)
(827,671
)
Loss on equity-method investments
1,840
1,313
Income tax effect on non-GAAP
adjustments
271,136
192,802
Non-GAAP net income
$
157,371
$
57,629
GAAP diluted income per share
$
32.38
$
22.72
Non-GAAP diluted income per share
$
5.21
$
1.91
2021 Financial Outlook
For the full year 2021, the company has updated its guidance and
now anticipates non-GAAP currency-neutral revenue growth of
approximately 5.5 to 6.0 percent and an estimated non-GAAP
operating margin of approximately 17.0 percent. Management will
discuss this outlook in greater detail on the first-quarter 2021
financial results conference call.
Use of Non-GAAP Reporting and Currency-Neutral
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,
valuation changes of equity-owned securities, 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 valuation changes in
equity-owned securities 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 valuation changes in equity-owned securities and gains
and losses 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 the United States. Investors should
review the reconciliation of the non-GAAP financial measures to
their most directly comparable GAAP financial measures as provided
in the tables accompanying this press release.
Conference Call and Webcast
Management will discuss first-quarter ended March 31, 2021
results in a conference call at 3 PM Pacific Time (6 PM Eastern
Time) April 29, 2021. To listen, call 855-779-9068 within the U.S.
or 631-485-4862 outside the U.S., Conference ID: 4692298. You may
also listen to the conference call live via a webcast that is
available on the “Investor Relations” section of our website under
“Quarterly Results” at bio-rad.com. The webcast will be available
for up to a year.
BIO-RAD and DROPLET DIGITAL PCR are trademarks of Bio-Rad
Laboratories, Inc. in certain jurisdictions.
About Bio-Rad
Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb) is a global
leader in developing, manufacturing, and marketing a broad range of
innovative products for the life science research and clinical
diagnostic markets. With a focus on quality and customer service
for over 65 years, our products advance the discovery process and
improve healthcare. Our customers are university and research
institutions, hospitals, public health and commercial laboratories,
biotechnology and pharmaceutical companies, as well as applied
laboratories that include food safety and environmental quality.
Founded in 1952, Bio-Rad is based in Hercules, California, and has
a global network of operations with more than 7,800 employees
worldwide. Bio-Rad had revenues exceeding $2.5 billion in 2020. For
more information, please visit bio-rad.com.
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; anticipating non-GAAP
currency-neutral revenue growth of approximately 5.5 to 6.0 percent
and an estimated non-GAAP operating margin of approximately 17.0
percent for the full year 2021; some of our markets continuing to
be affected by the COVID-19 pandemic and not operating at full
capacity; and beginning to see a gradual improvement in our
end-markets and expecting that momentum to continue as the year
progresses. Forward-looking statements generally can be identified
by the use of forward-looking terminology such as, "anticipate,"
"estimate," "expect," "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 the duration,
severity and impact of the COVID-19 pandemic, global economic
conditions, our ability to develop and market new or improved
products, our ability to compete effectively, foreign currency
exchange fluctuations, reductions in government funding or capital
spending of our customers, international legal and regulatory
risks, supply chain issues, product quality and liability issues,
our ability to integrate acquired companies, products or
technologies into our company successfully, changes in the
healthcare industry, and natural disasters and other catastrophic
events beyond our control. For further information regarding the
Company's risks and uncertainties, please refer to the "Risk
Factors" and "Management’s Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's public
reports filed with the Securities and Exchange Commission (the
"SEC"), including the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2020, and its Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 2021 to be filed
with the SEC. The Company cautions you not to place undue reliance
on forward-looking statements, which reflect an analysis only and
speak only as of the date hereof. Bio-Rad Laboratories, Inc.
disclaims any obligation to update these forward-looking
statements.
Bio-Rad Laboratories, Inc. Condensed Consolidated
Statements of Income (In thousands, except per share
data) (Unaudited)
Three Months
Ended March 31,
2021
2020
Net sales
$
726,796
$
571,644
Cost of goods sold
326,169
254,276
Gross profit
400,627
317,368
Selling, general and administrative expense
225,853
193,692
Research and development expense
73,912
49,303
Income from operations
100,862
74,373
Interest expense
398
5,690
Foreign currency exchange losses, net
71
928
Change in fair market value of equity securities
(1,179,403
)
(827,671
)
Other income, net
(17,407
)
(3,273
)
Income before income taxes
1,297,203
898,699
Provision for income taxes
(319,789
)
(212,787
)
Net income
$
977,414
$
685,912
Basic earnings per share: Net income per basic share
$
32.77
$
22.97
Weighted average common shares - basic
29,823
29,865
Diluted earnings per share: Net income per diluted share
$
32.38
$
22.72
Weighted average common shares - diluted
30,186
30,196
Bio-Rad Laboratories, Inc. Condensed Consolidated Balance
Sheets (In thousands)
March 31,
December 31,
2021
2020
(Unaudited) Current assets: Cash and cash equivalents
$
673,470
$
662,205
Short-term investments
351,958
334,473
Accounts receivable, net
408,137
419,424
Inventories, net
605,156
622,253
Other current assets
136,596
101,480
Total current assets
2,175,317
2,139,835
Property, plant and equipment, net
482,712
491,371
Operating lease right-of-use assets
196,224
202,136
Goodwill, net
291,916
291,916
Purchased intangibles, net
191,764
199,497
Other investments
10,503,038
9,561,140
Other assets
92,189
86,723
Total assets
$
13,933,160
$
12,972,618
Current liabilities: Accounts payable, accrued payroll and
employee benefits
$
313,383
$
362,326
Current maturities of long-term debt
1,738
1,798
Income and other taxes payable
89,074
57,335
Other current liabilities
205,697
210,077
Total current liabilities
609,892
631,536
Long-term debt, net of current maturities
10,901
12,258
Other long-term liabilities
2,703,308
2,448,884
Total liabilities
3,324,101
3,092,678
Total stockholders' equity
10,609,059
9,879,940
Total liabilities and stockholders' equity
$
13,933,160
$
12,972,618
Bio-Rad Laboratories, Inc. Condensed Consolidated
Statements of Cash Flows (In thousands) (Unaudited)
Three Months Ended March 31,
2021
2020
Cash flows from operating activities: Cash received from
customers
$
728,013
$
569,001
Cash paid to suppliers and employees
(612,803
)
(509,683
)
Interest paid, net
(309
)
(231
)
Income tax payments, net
(14,727
)
(4,528
)
Other operating activities
13,436
8,249
Net cash provided by operating activities
113,610
62,808
Cash flows from investing activities: Other investing
activities
(48,327
)
(12,422
)
Net cash used in investing activities
(48,327
)
(12,422
)
Cash flows from financing activities: Payments on long-term
borrowings
(1,401
)
(1,415
)
Other financing activities
(45,946
)
(97,202
)
Net cash used in financing activities
(47,347
)
(98,617
)
Effect of foreign exchange rate changes on cash
(7,347
)
(5,977
)
Net increase (decrease) in cash, cash equivalents, and
restricted cash
10,589
(54,208
)
Cash, cash equivalents, and restricted cash at beginning of period
667,115
662,651
Cash, cash equivalents, and restricted cash at end of period
$
677,704
$
608,443
Reconciliation of net income to net cash provided by
operating activities: Net income
$
977,414
$
685,912
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
32,736
33,591
Reduction in the carrying amount of right-of-use assets
9,750
9,561
Changes in working capital
(57,504
)
(35,106
)
Other
(848,786
)
(631,150
)
Net cash provided by operating activities
$
113,610
$
62,808
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; valuation changes of equity-owned securities; 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 March 31, % of
March 31, % of
2021
revenue
2020
revenue GAAP cost of goods sold
$
326,169
$
254,276
Amortization of purchased intangibles
(4,585
)
(3,897
)
Legal matters
536
-
Restructuring benefits (costs)
(23,980
)
1,456
Non-GAAP cost of goods sold
$
298,140
$
251,835
GAAP gross profit
$
400,627
55.1
%
$
317,368
55.5
%
Amortization of purchased intangibles
4,585
3,897
Legal matters
(536
)
-
Restructuring (benefits) costs
23,980
(1,456
)
Non-GAAP gross profit
$
428,656
59.0
%
$
319,809
55.9
%
GAAP selling, general and administrative expense
$
225,853
$
193,692
Amortization of purchased intangibles
(2,355
)
(1,958
)
Legal matters
(4,415
)
(1,833
)
Acquisition related benefits (costs) (1)
-
47
Restructuring benefits (costs)
(34,735
)
513
Non-GAAP selling, general and administrative expense
$
184,348
$
190,461
GAAP research and development expense
$
73,912
$
49,303
Restructuring benefits (costs)
(16,850
)
399
Non-GAAP research and development expense
$
57,062
$
49,702
GAAP income from operations
$
100,862
13.9
%
$
74,373
13.0
%
Amortization of purchased intangibles
6,940
5,855
Legal matters
3,879
1,833
Acquisition related (benefits) costs (1)
-
(47
)
Restructuring (benefits) costs
75,565
(2,368
)
Non-GAAP income from operations
$
187,246
25.8
%
$
79,646
13.9
%
GAAP change in fair market value of equity securities
$
(1,179,403
)
$
(827,671
)
Valuation (loss) gain on equity-owned securities
1,179,403
827,671
Non-GAAP change in fair market value of equity securities
$
-
$
-
GAAP other (income) expense, net
$
(17,407
)
$
(3,273
)
(Loss) gain on equity-method investments
(1,840
)
(1,313
)
Non-GAAP other (income) expense, net
$
(19,247
)
$
(4,586
)
GAAP income before income taxes
$
1,297,203
$
898,699
Amortization of purchased intangibles
6,940
5,855
Legal matters
3,879
1,833
Acquisition related (benefits) costs (1)
-
(47
)
Restructuring (benefits) costs
75,565
(2,368
)
Valuation loss (gain) on equity-owned securities
(1,179,403
)
(827,671
)
Loss (gain) on equity-method investments
1,840
1,313
Non-GAAP income before income taxes
$
206,024
$
77,614
GAAP provision for income taxes
$
(319,789
)
$
(212,787
)
Income tax effect of non-GAAP adjustments (2)
271,136
192,802
Non-GAAP provision for income taxes
$
(48,653
)
$
(19,985
)
GAAP net income
$
977,414
134.5
%
$
685,912
120.0
%
Amortization of purchased intangibles
6,940
5,855
Legal matters
3,879
1,833
Acquisition related (benefits) costs (1)
-
(47
)
Restructuring (benefits) costs
75,565
(2,368
)
Valuation loss (gain) on equity-owned securities
(1,179,403
)
(827,671
)
Loss (gain) on equity-method investments
1,840
1,313
Income tax effect of non-GAAP adjustments (2)
271,136
192,802
Non-GAAP net income
$
157,371
21.7
%
$
57,629
10.1
%
GAAP diluted income per share
$
32.38
$
22.72
Amortization of purchased intangibles
0.23
0.19
Legal matters
0.13
0.06
Acquisition related (benefits) costs (1)
-
-
Restructuring (benefits) costs
2.50
(0.08
)
Valuation loss (gain) on equity-owned securities
(39.07
)
(27.41
)
Loss (gain) on equity-method investments
0.06
0.04
Income tax effect of non-GAAP adjustments (2)
8.98
6.39
Non-GAAP diluted income per share
$
5.21
$
1.91
GAAP diluted weighted average shares used in per share
calculation
30,186
30,196
Shares included in non-GAAP net income per share, but excluded from
GAAP net loss per share as they would have been anti-dilutive
-
-
Non-GAAP diluted weighted average shares used in per share
calculation
30,186
30,196
(1) Release of contingent consideration and
other acquisition-related (benefits) expenses. (2) 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.
2021 Financial Outlook
Forecasted non-GAAP operating margin excludes 104 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/20210429006046/en/
Investor Contact: Ilan Daskal, Executive Vice President
& Chief Financial Officer 510-724-7000
investor_relations@bio-rad.com Press Contact: Tina Cuccia,
Corporate Communications 510-724-7000 tina_cuccia@bio-rad.com
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