Bio-Rad Reports Fourth-Quarter and Full-Year 2023 Financial Results

Published

HERCULES, Calif.--(BUSINESS WIRE)-- Bio-Rad Laboratories, Inc. (NYSE: BIO and BIO.B), a global leader in life science research and clinical diagnostics products, today announced financial results for the fourth quarter and full year ended December 31, 2023.

Fourth-quarter 2023 total net sales were $681.2 million, a decrease of 6.7 percent compared to $730.3 million reported for the fourth quarter of 2022. On a currency-neutral basis, quarterly sales decreased 7.7 percent compared to the same period in 2022. COVID-related sales were approximately $0.3 million in the fourth quarter of 2023 versus approximately $13.4 million in the year ago period. Excluding COVID-related sales, revenue decreased 6.0 percent on a currency-neutral basis.

Life Science segment net sales for the fourth quarter were $291.1 million, a decline of 19.1 percent compared to the same period in 2022. On a currency-neutral basis, Life Science segment sales decreased by 19.9 percent compared to the same quarter in 2022. Excluding COVID-related sales, Life Science revenue decreased 17.0 percent. The decline was broad-based, primarily due to lower sales of ddPCR, qPCR, and Western blotting products.

Clinical Diagnostics segment net sales for the fourth quarter were $389.0 million, an increase of 5.3 percent compared to the same period in 2022. On a currency-neutral basis, net sales increased 4.2 percent versus the same quarter last year. Excluding COVID-related sales, Clinical Diagnostics revenue increased 4.3 percent year over year, on a currency-neutral basis, driven by strong demand for diabetes and quality control related products.

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 $95.3 million versus $118.7 million during the same quarter last year.

Net income for the fourth quarter of 2023 was $349.7 million, or $12.14 per share, on a diluted basis, versus net income of $827.7 million, or $27.78 per share, on a diluted basis, during the same period in 2022. Net income amounts for the fourth quarter of 2023 and 2022 were primarily impacted by the recognition of changes in the fair market value of equity securities related to the holdings of the company’s investment in Sartorius AG.

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 $105.2 million versus $127.0 million during the comparable prior-year period.

Non-GAAP net income for the fourth quarter of 2023 was $89.3 million, or $3.10 per share, on a diluted basis, compared to $98.5 million, or $3.31 per share, on a diluted basis, during the same period in 2022.

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

GAAP Results

 

 

Q4 2023

Q4 2022

Full-Year 2023

Full-Year 2022

 

Revenue (millions)

$681.2

 

$730.3

 

$2,671.3

 

$2,802.2

 

Gross margin

53.8%

 

54.4%

 

53.4%

 

55.9%

 

Operating margin

14.0%

 

16.2%

 

12.6%

 

17.2%

 

Net income (loss) (millions)

$349.7

 

$827.7

 

($637.3)

 

($3,627.5)

 

Income (loss) per diluted share

$12.14

 

$27.78

 

($21.82)

 

($121.79)

 

 

 

 

 

 

 

Non-GAAP Results

 

 

Q4 2023

 

Q4 2022

 

Full-Year 2023

 

Full-Year 2022

 

Revenue (millions)

$681.2

 

$730.3

 

$2,671.3

 

$2,802.2

 

Gross margin

54.4%

 

54.9%

 

54.2%

 

56.6%

 

Operating margin

15.5%

 

17.4%

 

14.2%

 

18.7%

 

Net income (millions)

$89.3

 

$98.5

 

$345.2

 

$432.6

 

Income per diluted share

$3.10

 

$3.31

 

$11.78

 

$14.42

 

 

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 $2,671.3 million compared to $2,802.2 million for the prior year. On a currency-neutral basis, net sales decreased 4.1 percent.

COVID-related sales for the full year were approximately $4 million, compared to $109 million in the year-ago period. 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 sales for the Life Science segment were $1,178.4 million, a decrease of 12.0 percent compared to the prior year on a currency-neutral basis. Excluding COVID-related sales, Life Science revenue declined 4.9 percent on a currency-neutral basis in 2023 versus 2022, primarily due to lower sales of process chromatography, qPCR, and Western blotting products.

Full-year 2023 reported net sales for the Clinical Diagnostics segment were $1,489.3 million, an increase of 3.2 percent compared to the prior year on a currency-neutral basis. When excluding COVID-related sales, full-year Clinical Diagnostics revenue grew 3.4 percent compared to 2022 on a currency-neutral basis, and was driven by diabetes, quality control, and blood typing products, partially offset by a decline in infectious disease products.

Full-year 2023 gross margin was 53.4 percent, compared to 55.9 percent in 2022.

Full-year 2023 income from operations was $337.8 million versus $482.6 million in 2022.

Net loss for full-year 2023 was $637.3 million, or $21.82 net loss per share, on a fully diluted basis, compared to a net loss of $3,627.5 million, or $121.79 net loss per share, in 2022. Net loss amounts for full-year 2023 and 2022 were primarily impacted by the recognition of changes in the fair market value of equity securities related to the holdings of the company’s investment in Sartorius AG.

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 $378.9 million versus $524.0 million for the full year of 2022.

Non-GAAP net income for 2023 was $345.2 million, or $11.78 per share, compared to $432.6 million, or $14.42 per share in 2022.

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 compared to $2,802.2 million for the full year of 2022.
  • 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, or $21.82 net loss per share, on a fully diluted basis, compared to a net loss of $3,627.5 million, or $121.79 net loss per share, in 2022.
  • 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 U.S. or +1 416-764-8624 outside the U.S., and provide access code: 36826276.

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 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.

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 Hercules, California, Bio-Rad operates a global network of research, development, manufacturing, and sales operations with over 8,000 employees and $2.7 billion in revenues in 2023. Our customers include universities, research institutions, hospitals, food safety and environmental quality laboratories, and biopharmaceutical companies. Together, we develop innovative, high-quality products that advance science and save lives. To learn more, visit bio-rad.com.

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 China, supply chain issues, international legal and regulatory risks, our ability to develop and market new or improved products, our ability to compete effectively, foreign currency exchange fluctuations, 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, 2022, its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, and its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 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 (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 MonthsEnded Three MonthsEnded 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.

 

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.

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