Bio-Rad Reports Third-Quarter 2022 Financial Results

October 28, 2022 Off By BusinessWire

HERCULES, Calif.–(BUSINESS WIRE)–Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb), a global leader in life science research and clinical diagnostic products, today announced financial results for the third quarter ended September 30, 2022.

Third-quarter 2022 net sales were $680.8 million, a decrease of 8.9 percent compared to $747.0 million reported for the third quarter of 2021. COVID-related revenue was approximately $17 million in the third quarter of 2022 versus approximately $57 million reported in the year-ago period. On a currency-neutral basis, quarterly sales decreased 4.1 percent compared to the same period in 2021. Third-quarter 2022 revenue increased 6.1 percent on a currency-neutral basis when excluding COVID-related sales, and $32 million in legal settlements in the third quarter of 2021.

Third-quarter 2022 gross margin was 54.9 percent compared to 58.6 percent for the third quarter of 2021 which included the benefit of the $32 million in legal settlements.

Life Science segment net sales for the third quarter were $317.9 million, a decrease of 14.9 percent compared to the same period in 2021. On a currency-neutral basis, the segment sales decreased 11.0 percent compared to the same quarter in 2021. Life Science sales increased 9.4 percent when excluding COVID-related sales and legal settlements, and were primarily driven by western blotting, qPCR, process media, and antibody products. Life Science segment sales were impacted by lower COVID-related sales, legal settlements in the year-ago period, and continuing supply chain constraints.

Clinical Diagnostics segment net sales for the third quarter were $361.9 million, a decrease of 2.8 percent compared to the same period in 2021. On a currency-neutral basis, net sales increased 3.0 percent versus the same quarter last year. Excluding COVID-related sales, Clinical Diagnostics revenue increased 3.7 percent from the year-ago period. The currency-neutral sales increase was primarily driven by quality control, blood typing, and infectious disease product lines.

Income from operations for the third quarter of 2022 was $92.8 million versus $156.8 million during the same quarter last year.

Net loss for the third quarter of 2022 was $164.2 million, or a loss of $5.52 per share, on a diluted basis, versus $3,928 million of net income, or $129.96 per share, on a diluted basis, during the same period in 2021. Net income (loss) amounts for the third quarter of 2022 and 2021 were predominantly 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 third quarter of 2022 was 21.5 percent, compared to 21.8 percent for the same period in 2021. The effective tax rate reported in Q3 of 2022 was primarily affected by an unrealized loss in equity securities, and the tax rate reported in Q3 of 2021 was primarily affected by an unrealized gain in equity securities.

“As expected, during the third quarter, sales of our COVID-related products continued to taper off,” said Norman Schwartz, Bio-Rad’s President, and Chief Executive Officer. “While customer demand for our core products remained strong, our ability to meet it was affected by the ongoing supply chain constraints which moderated instrument placements. For the remainder of the year, we will focus on reducing the backlog while we continue to advance our strategic product and operational activities.”

GAAP Results

Q3 2022

Q3 2021

Revenue (millions)

$680.8

$747.0

Gross margin

54.9%

58.6%

Operating margin

13.6%

21.0%

Net income (loss) (millions)

($164.2)

$3,928.0

Income (loss) per diluted share

($5.52)

$129.96

 

Non-GAAP Results

Q3 2022

Q3 2021

Revenue (millions)

$680.8

$715.2

Gross margin

55.7%

57.9%

Operating margin

15.5%

19.4%

Net income (millions)

$77.9

$112.2

Income per diluted share

$2.60

$3.71

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 gains and losses from change in fair market value of equity securities and loan receivable; 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 and Currency-Neutral Reporting.”

Non-GAAP net income for the third quarter of 2022 was $77.9 million, or $2.60 per share, on a diluted basis, compared to $112.2 million, or $3.71 per share, on a diluted basis, during the same period in 2021.

The non-GAAP effective tax rate for the third quarter of 2022 was 21.6 percent, compared to 18 percent for the same period in 2021. The higher tax rate in 2022 was driven by a geographical mix of earnings, as well as a decrease in compensation-related tax deductions.

The following table represents a reconciliation of Bio-Rad’s reported net income (loss) and diluted income (loss) per share to non-GAAP net income and non-GAAP diluted income per share for the three and nine months ended September 30, 2022, and 2021:

 

In thousands, except per share data

Three Months Ended

September 30, 2022

Three Months Ended

September 30, 2021

Nine Months Ended

September 30, 2022

Nine Months Ended

September 30, 2021

 

GAAP net income (loss)

$

(164,232

)

$

3,928,033

 

$

(4,461,029

)

$

5,819,561

 

Legal settlements

 

 

 

(28,083

)

 

 

 

(28,619

)

Amortization of purchased intangibles

 

6,234

 

 

7,097

 

 

18,835

 

 

21,032

 

Legal matters

 

(2

)

 

2,325

 

 

2,066

 

 

15,501

 

Acquisition related benefits

 

 

 

 

 

 

 

(40

)

Restructuring costs

 

4,562

 

 

15

 

 

4,563

 

 

67,799

 

(Gains) losses from change in fair market value of equity securities and loan receivable

 

288,999

 

 

(4,868,659

)

 

6,172,306

 

 

(7,078,753

)

Losses on equity-method investments

 

6,554

 

 

1,899

 

 

9,177

 

 

5,579

 

Other non-recurring items (2) (3)

 

2,176

 

 

 

 

6,146

 

 

 

Income tax effect of non-GAAP adjustments (1)

 

(66,370

)

 

1,069,577

 

 

(1,423,598

)

 

1,554,100

 

Non-GAAP net income

$

77,921

 

$

112,204

 

$

328,466

 

$

376,160

 

 

GAAP diluted income (loss) per share

$

(5.52

)

$

129.96

 

$

(149.60

)

$

192.76

 

 

Non-GAAP diluted income per share

$

2.60

 

$

3.71

 

$

10.93

 

$

12.46

 

(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 sale of a division in 2020.

2022 Financial Outlook

For the full-year 2022, the company continues to anticipate non-GAAP currency-neutral revenue growth to be at the high end of the prior 1.0 to 2.0 percent guidance, with COVID-related revenue now expected to be about $105 million versus the previous estimate of approximately $93 million. The company is reaffirming its non-GAAP operating margin expectation of approximately 19.0 percent. Bio-Rad’s management will discuss this outlook in greater detail during the third-quarter 2022 financial results conference call.

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 ongoing 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 ongoing 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 ongoing 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

Bio-Rad’s management will discuss the results for the third quarter ended September 30, 2022 in a conference call at 2 PM Pacific Time (5 PM Eastern Time) on October 27, 2022. To participate, call 844-200-6205 within the U.S. or +1 929-526-1599 outside the U.S., access code: 189834. 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.

BIO-RAD is a trademark 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 70 years of focus on quality and customer service, our products advance the scientific discovery process and improve healthcare. Our customers are universities, research institutions, hospitals, biotechnology and pharmaceutical companies, as well as public health and commercial laboratories including food safety and environmental quality testing facilities. Based in Hercules, California, Bio-Rad has a global network of operations with approximately 8,200 employees worldwide and $2.9 billion in revenues in 2021. For more information, please 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; for the remainder of the year, focusing on reducing the backlog while we continue to advance our strategic product and operational activities; and for the full-year 2022, continuing to anticipate non-GAAP currency-neutral revenue growth to be at the high end of the prior 1.0 to 2.0 percent guidance, with Covid-related revenue now expected to be about $105 million versus the previous estimate of approximately $93 million, and reaffirming the non-GAAP operating margin expectation of approximately 19.0 percent. 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, supply chain issues, global economic conditions, foreign currency exchange fluctuations, our ability to develop and market new or improved products, our ability to compete effectively, reductions in government funding or capital spending of our customers, international legal and regulatory risks, 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, 2021 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 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 Nine Months Ended
September 30, September 30,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net sales

$

680,800

 

$

747,049

 

$

2,071,961

 

$

2,189,776

 

Cost of goods sold

 

307,008

 

 

309,614

 

 

898,628

 

 

950,116

 

Gross profit

 

373,792

 

 

437,435

 

 

1,173,333

 

 

1,239,660

 

 
Selling, general and administrative expense

 

211,047

 

 

216,150

 

 

617,371

 

 

655,428

 

Research and development expense

 

69,949

 

 

64,481

 

 

199,526

 

 

201,784

 

Income from operations

 

92,796

 

 

156,804

 

 

356,436

 

 

382,448

 

 
Interest expense

 

11,663

 

 

426

 

 

26,431

 

 

1,187

 

Foreign currency exchange losses, net

 

4,364

 

 

2,232

 

 

3,133

 

 

542

 

(Gains) losses from change in fair market value of equity securities and loan receivable

 

288,999

 

 

(4,868,659

)

 

6,172,306

 

 

(7,078,753

)

Other (income) expense, net

 

(3,062

)

 

579

 

 

(42,369

)

 

(16,732

)

Income (loss) before income taxes

 

(209,168

)

 

5,022,226

 

 

(5,803,065

)

 

7,476,204

 

 
Benefit from (provision for) income taxes

 

44,936

 

 

(1,094,193

)

 

1,342,036

 

 

(1,656,643

)

Net income (loss)

$

(164,232

)

$

3,928,033

 

$

(4,461,029

)

$

5,819,561

 

 
Basic earnings (loss) per share:
Net income (loss) per basic share

$

(5.52

)

$

131.75

 

$

(149.60

)

$

195.29

 

 
Weighted average common shares – basic

 

29,733

 

 

29,814

 

 

29,819

 

 

29,800

 

 
Diluted earnings (loss) per share:
Net income (loss) per diluted share

$

(5.52

)

$

129.96

 

$

(149.60

)

$

192.76

 

 
Weighted average common shares – diluted

 

29,733

 

 

30,224

 

 

29,819

 

 

30,190

 

 
Note: As a result of the net loss for the three and nine months ended September 30, 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)
 
 
 
September 30, December 31,

2022

2021

(Unaudited)
Current assets:
Cash and cash equivalents

$

517,943

$

470,783

Short-term investments

 

1,337,740

 

404,695

Accounts receivable, net

 

432,302

 

423,537

Inventories, net

 

685,850

 

572,239

Other current assets

 

166,320

 

117,834

Total current assets

 

3,140,155

 

1,989,088

 
Property, plant and equipment, net

 

461,112

 

490,952

Operating lease right-of-use assets

 

171,587

 

204,798

Goodwill, net

 

399,589

 

347,343

Purchased intangibles, net

 

325,076

 

253,939

Other investments

 

7,459,169

 

14,387,006

Other assets

 

101,774

 

102,669

Total assets

$

12,058,462

$

17,775,795

 
Current liabilities:
Accounts payable, accrued payroll and employee benefits

$

335,206

$

418,927

Current maturities of long-term debt

 

448

 

489

Income and other taxes payable

 

29,274

 

46,299

Other current liabilities

 

205,749

 

215,223

Total current liabilities

 

570,677

 

680,938

 
Long-term debt, net of current maturities

 

1,197,272

 

10,514

Other long-term liabilities

 

1,836,908

 

3,417,209

Total liabilities

 

3,604,857

 

4,108,661

 
Total stockholders’ equity

 

8,453,605

 

13,667,134

Total liabilities and stockholders’ equity

$

12,058,462

$

17,775,795

 
Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Cash Flows
 
(In thousands)
(Unaudited)
 
 
 
 
Nine Months Ended
September 30,
 

 

2022

 

 

2021

 

 
Cash flows from operating activities:
Cash received from customers

$

1,981,952

 

$

2,177,199

 

Cash paid to suppliers and employees

 

(1,811,250

)

 

(1,597,938

)

Interest paid, net

 

(23,974

)

 

(1,848

)

Income tax payments, net

 

(137,863

)

 

(103,902

)

Other operating activities

 

95,162

 

 

25,086

 

Net cash provided by operating activities

 

104,027

 

 

498,597

 

 
Cash flows from investing activities:
Payments for acquisitions

 

(100,746

)

 

 

Payments for purchases of marketable securities and investments

 

(1,807,148

)

 

(460,061

)

Proceeds from sales and maturities of marketable securities and investments

 

835,366

 

 

307,618

 

Other investing activities

 

(65,750

)

 

(77,511

)

Net cash used in investing activities

 

(1,138,278

)

 

(229,954

)

 
Cash flows from financing activities:
Proceeds from issuance of Notes, net of debt financing costs

 

1,186,220

 

 

 

Payments on long-term borrowings

 

(367

)

 

(1,645

)

Other financing activities

 

(125,658

)

 

(58,419

)

Net cash provided by (used in) financing activities

 

1,060,195

 

 

(60,064

)

 
Effect of foreign exchange rate changes on cash

 

21,167

 

 

(11,174

)

 
Net increase in cash, cash equivalents and restricted cash

 

47,111

 

 

197,405

 

Cash, cash equivalents and restricted cash at beginning of period

 

471,133

 

 

667,115

 

Cash, cash equivalents and restricted cash at end of period

$

518,244

 

$

864,520

 

 
 
Reconciliation of net income (loss) to net cash provided by operating activities:
Net income (loss)

$

(4,461,029

)

$

5,819,561

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization

 

97,345

 

 

100,075

 

Reduction in the carrying amount of right-of-use assets

 

29,828

 

 

29,311

 

(Gains) losses from change in fair market value of equity securities and loan receivable

 

6,172,306

 

 

(7,078,753

)

Changes in working capital

 

(343,900

)

 

(14,538

)

Other

 

(1,390,523

)

 

1,642,941

 

Net cash provided by operating activities

$

104,027

 

$

498,597

 

 
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 Nine Months Ended Nine Months Ended
September 30, % of September 30, % of September 30, % of September 30, % of

 

2022

 

revenue

 

2021

 

revenue

 

2022

 

revenue

 

2021

 

revenue
 
GAAP net sales

$

680,800

 

$

747,049

 

$

2,071,961

 

$

2,189,776

 

Legal settlements

 

 

 

(31,843

)

 

 

 

(31,843

)

Non-GAAP net sales

$

680,800

 

$

715,206

 

$

2,071,961

 

$

2,157,933

 

 
GAAP cost of goods sold

$

307,008

 

$

309,614

 

$

898,628

 

$

950,116

 

Amortization of purchased intangibles

 

(4,430

)

 

(4,678

)

 

(13,341

)

 

(13,903

)

Legal settlements

 

 

 

(4,071

)

 

 

 

(3,535

)

Restructuring benefits (costs)

 

(1,285

)

 

(52

)

 

(1,288

)

 

(25,241

)

Non-GAAP cost of goods sold

$

301,293

 

$

300,813

 

$

883,999

 

$

907,437

 

 
GAAP gross profit

$

373,792

 

54.9

%

$

437,435

 

58.6

%

$

1,173,333

 

56.6

%

$

1,239,660

 

56.6

%

Amortization of purchased intangibles

 

4,430

 

 

4,678

 

 

13,341

 

 

13,903

 

Legal settlements

 

 

 

(27,772

)

 

 

 

(28,308

)

Restructuring (benefits) costs

 

1,285

 

 

52

 

 

1,288

 

 

25,241

 

Non-GAAP gross profit

$

379,507

 

55.7

%

$

414,393

 

57.9

%

$

1,187,962

 

57.3

%

$

1,250,496

 

57.9

%

 
GAAP selling, general and administrative expense

$

211,047

 

$

216,150

 

$

617,371

 

$

655,428

 

Amortization of purchased intangibles

 

(1,804

)

 

(2,419

)

 

(5,494

)

 

(7,129

)

Legal matters

 

2

 

 

(2,325

)

 

(2,066

)

 

(15,501

)

Acquisition related benefits (costs)

 

 

 

 

 

 

 

40

 

Restructuring benefits (costs)

 

(2,782

)

 

299

 

 

(2,945

)

 

(27,507

)

Other non-recurring items (2)

 

(2,176

)

 

 

 

(7,506

)

 

 

Non-GAAP selling, general and administrative expense

$

204,287

 

$

211,705

 

$

599,360

 

$

605,331

 

 
GAAP research and development expense

$

69,949

 

$

64,481

 

$

199,526

 

$

201,784

 

Restructuring benefits (costs)

 

(495

)

 

(262

)

 

(330

)

 

(15,051

)

Non-GAAP research and development expense

$

69,454

 

$

64,219

 

$

199,196

 

$

186,733

 

 
GAAP income from operations

$

92,796

 

13.6

%

$

156,804

 

21.0

%

$

356,436

 

17.2

%

$

382,448

 

17.5

%

Legal settlements

 

 

 

(27,772

)

 

 

 

(28,308

)

Amortization of purchased intangibles

 

6,234

 

 

7,097

 

 

18,835

 

 

21,032

 

Legal matters

 

(2

)

 

2,325

 

 

2,066

 

 

15,501

 

Acquisition related (benefits) costs

 

 

 

 

 

 

 

(40

)

Restructuring (benefits) costs

 

4,562

 

 

15

 

 

4,563

 

 

67,799

 

Other non-recurring items (2)

 

2,176

 

 

 

 

7,506

 

 

 

Non-GAAP income from operations

$

105,766

 

15.5

%

$

138,469

 

19.4

%

$

389,406

 

18.8

%

$

458,432

 

21.2

%

 
GAAP (gains) losses from change in fair market value of equity securities and loan receivable

$

288,999

 

$

(4,868,659

)

$

6,172,306

 

$

(7,078,753

)

Gains (losses) from change in fair market value of equity securities and loan receivable

 

(288,999

)

 

4,868,659

 

 

(6,172,306

)

 

7,078,753

 

Non-GAAP (gains) losses from change in fair market value of equity securities and loan receivable

$

 

$

 

$

 

$

 

 
GAAP other (income) expense, net

$

(3,062

)

$

579

 

$

(42,369

)

$

(16,732

)

Gains (losses) on equity-method investments

 

(6,554

)

 

(1,899

)

 

(9,177

)

 

(5,579

)

Legal settlements

 

 

 

311

 

 

 

 

311

 

Other non-recurring items (3)

 

 

 

 

 

1,360

 

 

 

Non-GAAP other (income) expense, net

$

(9,616

)

$

(1,009

)

$

(50,186

)

$

(22,000

)

 
GAAP income (loss) before income taxes

$

(209,168

)

$

5,022,226

 

$

(5,803,065

)

$

7,476,204

 

Legal settlements

 

 

 

(28,083

)

 

 

 

(28,619

)

Amortization of purchased intangibles

 

6,234

 

 

7,097

 

 

18,835

 

 

21,032

 

Legal matters

 

(2

)

 

2,325

 

 

2,066

 

 

15,501

 

Acquisition related (benefits) costs

 

 

 

 

 

 

 

(40

)

Restructuring (benefits) costs

 

4,562

 

 

15

 

 

4,563

 

 

67,799

 

(Gains) losses from change in fair market value of equity securities and loan receivable

 

288,999

 

 

(4,868,659

)

 

6,172,306

 

 

(7,078,753

)

(Gains) losses on equity-method investments

 

6,554

 

 

1,899

 

 

9,177

 

 

5,579

 

Other non-recurring items (2) (3)

 

2,176

 

 

 

 

6,146

 

 

 

Non-GAAP income before income taxes

$

99,355

 

$

136,820

 

$

410,028

 

$

478,703

 

 
GAAP benefit from (provision for) income taxes

$

44,936

 

$

(1,094,193

)

$

1,342,036

 

$

(1,656,643

)

Income tax effect of non-GAAP adjustments (1)

 

(66,370

)

 

1,069,577

 

 

(1,423,598

)

 

1,554,100

 

Non-GAAP provision for income taxes

$

(21,434

)

$

(24,616

)

$

(81,562

)

$

(102,543

)

 
GAAP net income (loss)

$

(164,232

)

-24.1

%

$

3,928,033

 

525.8

%

$

(4,461,029

)

-215.3

%

$

5,819,561

 

265.8

%

Legal settlements

 

 

 

(28,083

)

 

 

 

(28,619

)

Amortization of purchased intangibles

 

6,234

 

 

7,097

 

 

18,835

 

 

21,032

 

Legal matters

 

(2

)

 

2,325

 

 

2,066

 

 

15,501

 

Acquisition related (benefits) costs

 

 

 

 

 

 

 

(40

)

Restructuring (benefits) costs

 

4,562

 

 

15

 

 

4,563

 

 

67,799

 

(Gains) losses from change in fair market value of equity securities and loan receivable

 

288,999

 

 

(4,868,659

)

 

6,172,306

 

 

(7,078,753

)

(Gains) losses on equity-method investments

 

6,554

 

 

1,899

 

 

9,177

 

 

5,579

 

Other non-recurring items (2) (3)

 

2,176

 

 

 

 

6,146

 

 

 

Income tax effect of non-GAAP adjustments (1)

 

(66,370

)

 

1,069,577

 

 

(1,423,598

)

 

1,554,100

 

Non-GAAP net income

$

77,921

 

11.4

%

$

112,204

 

15.7

%

$

328,466

 

15.9

%

$

376,160

 

17.4

%

 
GAAP diluted income (loss) per share

$

(5.52

)

$

129.96

 

$

(149.60

)

$

192.76

 

Legal settlements

 

 

 

(0.93

)

 

 

 

(0.95

)

Amortization of purchased intangibles

 

0.21

 

 

0.23

 

 

0.63

 

 

0.70

 

Legal matters

 

 

 

0.08

 

 

0.07

 

 

0.51

 

Acquisition related (benefits) costs

 

 

 

 

 

 

 

 

Restructuring (benefits) costs

 

0.15

 

 

 

 

0.15

 

 

2.25

 

(Gains) losses from change in fair market value of equity securities and loan receivable

 

9.65

 

 

(161.09

)

 

205.35

 

 

(234.47

)

(Gains) losses on equity-method investments

 

0.22

 

 

0.06

 

 

0.31

 

 

0.18

 

Other non-recurring items (2) (3)

 

0.07

 

 

 

 

0.20

 

 

 

Income tax effect of non-GAAP adjustments (1)

 

(2.22

)

 

35.40

 

 

(47.36

)

 

51.48

 

Add back anti-dilutive shares

 

0.04

 

 

 

 

1.18

 

 

 

Non-GAAP diluted income per share

$

2.60

 

$

3.71

 

$

10.93

 

$

12.46

 

 
GAAP diluted weighted average shares used in per share calculation

 

29,733

 

 

30,224

 

 

29,819

 

 

30,190

 

Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive

 

218

 

 

 

 

238

 

 

 

Non-GAAP diluted weighted average shares used in per share calculation

 

29,951

 

 

30,224

 

 

30,057

 

 

30,190

 

 
Reconciliation of Net income (loss) to adjusted EBITDA:
GAAP net income (loss)

$

(164,232

)

-24.1

%

$

3,928,033

 

525.8

%

$

(4,461,029

)

-215.3

%

$

5,819,561

 

265.8

%

Interest expense

 

11,663

 

 

426

 

 

26,431

 

 

1,187

 

(Benefit from) provision for income taxes

 

(44,936

)

 

1,094,193

 

 

(1,342,036

)

 

1,656,643

 

Depreciation and amortization

 

32,720

 

 

33,687

 

 

97,345

 

 

100,075

 

Foreign currency exchange losses, net

 

4,364

 

 

2,232

 

 

3,133

 

 

542

 

Other (income) expense, net

 

(3,062

)

 

579

 

 

(42,369

)

 

(16,732

)

(Gains) losses from change in fair market value of equity securities and loan receivable

 

288,999

 

 

(4,868,659

)

 

6,172,306

 

 

(7,078,753

)

Dividend from Sartorius AG

 

 

 

 

 

31,586

 

 

18,991

 

Legal settlements (4)

 

 

 

(27,772

)

 

 

 

(28,308

)

Legal matters

 

(2

)

 

2,325

 

 

2,066

 

 

15,501

 

Acquisition related (benefits) costs

 

 

 

 

 

 

 

(40

)

Restructuring (benefits) costs

 

4,562

 

 

15

 

 

4,563

 

 

67,799

 

Other non-recurring items (2)

 

2,176

 

 

 

 

7,506

 

 

 

Adjusted EBITDA

$

132,252

 

19.4

%

$

165,059

 

23.1

%

$

499,502

 

24.1

%

$

556,466

 

25.8

%

 
 

(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 sale of a division in 2020.

 

 

(4)

 Amount excludes interest income received in connection with legal settlements.

 
 
2022 Financial Outlook
 
Forecasted non-GAAP operating margin excludes 86 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.

Contacts

Investor Contact:
Edward Chung, Investor Relations

510-741-6104

[email protected]

Media Contact:
Anna Gralinska, Corporate Communications

510-741-6643

[email protected]

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