BIO - Earnings call transcript Q4 2018 | Bio-Rad Laboratories, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter and Full Year 2018 Bio-Rad Laboratories, Inc. earnings conference call. [Operator instructions] I would now like to introduce your host for today’s conference, Mr. Ron Hutton, Vice President and Treasurer.

Ron Hutton

Thank you.

financial call, be like management’s making and our the that caution goals, begin matters. expectations, will other we forward-looking future we I to would everyone plans Before and performance statements about our Because risk our from and and on you where business. expectations, with I reliance discuss, differ factors encourage not detail, undue review forward-looking we our the our place filings plans should these results actual may in materially statements, our you in to SEC, not does any statements company update The intend forward-looking made to today. call during the

GAAP today With over earnings Our in comparable principles. not accounting income of Vice which defined results Tsingos, income also are remarks non-GAAP contained that, Officer. share, like call the these and release. accepted generally Investors non-GAAP will non-GAAP to turn should Christine President to include Executive references per are under our and to Financial review to financial the I’d measures that Chief measures diluted the reconciliation

Christine Tsingos

then afternoon, our for will results non-GAAP review CEO; thinking With are Thanks, Ron. on quarter into some Hertia, we results we us. as Clinical some and financial fourth year Group; Schwartz, insight Diagnostics me everyone, joining for Good a XXXX. commentary provide President full will on our Norman our Group. our and and as the to Today, a well XXXX, for you review and Annette provide Tumolo, thank President today Life basis and Science GAAP Today, of insight John of our basis. our results

guidance. the period sales a million. were $XXX.X of sales the for Net last our slightly XXXX year with higher increased On million, lower of the record expected, start Let’s line. and than basis, quarter sales top and X.X% currency-neutral same as versus $XXX.X fourth

basis. this growth, life basis, offset million, year, line, particularly media were products the fourth we process higher-than-market and sales of in basis. period. expected U.S. a noted by PCR growth geographic $XXX.X currency-neutral Life expression process decrease particular XX% continued fourth as decline in X.X% and the basis, when of X.X% driven this good the to quarter and Cell basis Digital and a key the that a on lines growth the of During slight our note It in is quarter currency-neutral our as the important Pacific. increase on science a strong many well reported demand growth was the strength sales demand to was the $XXX.X product of compared across in Western the in experienced year year-ago Americas sales year by strong quarter, with $X last on media a Biology, on Blot last products, currency-neutral for Much fourth gene growth products increase reduction decline as the quarter million quarter. growth a of products. reported million top more and our of totaled for sales clinical The diagnostics China. in antibody combined X.X% of the the This was somewhat but of and On RainDance than RainDance most million, in tough in experienced growth in compare currency-neutral on to product of of science products. $XXX.X compared Sales as well expected a were of and Asia

to Europe. than versus quarter basis quarter costs. were the decline goods $X.X and well Pacific. changes the million and million offset levels significant result the U.S., the Asia in to cost recorded higher the for $X.X margin recent products, especially the of spend as During employee-related well in million is was for by increase SG&A quality the Research well the XX.X% and or litigation on sizable as million the year, blood expenses, in line of in testing XX% Total as compared The as intellectual second cost gross sales. or of fourth $XX.X impacted higher a last additional key X.X% in posted by development geographic we a was amortization growth third was reported to at acquisitions we quarter quarter, in million autoimmune margin control for this for was as When year. SG&A current but solid as non-GAAP property. a typing, to improved in in charge, defend period was a expense fourth related lower in the service in The growth quarter Amortization quarter vigorously in million, in expense and certainly the This our QX which operations. compares of expenses partially third quarter increase sold growth in our for the European in related $X.X sequential from same as $X.X recorded $XXX.X year. sales. of acquisitions year, restructuring last prior last was third quarter experienced product inventory-related of quarters. mix,

million market XXXX. to quarter, and optimistic acquisition pricing the we environment the ago, DiaMed, significantly completed with on was has to to of blood dynamics opportunity. acquisitions, XX-plus to ready During which the and future value be about decision make share lion we assets margin-expansion The changed business the leading growth we continue of related us prior typing taken the the action, compared have accounting of in accounting global impaired goodwill appropriate intangible being appropriate approximately regarding And $XXX the years the books. our to while in

by to holdings compared $XX,XXX $XX line, Sartorius. equity interest for to the a results our substantially of of of during fair expense foreign versus investment last higher resulted resulted and market the in cost preferred of sizable quarter and as U.S. loss ordinary reform as was from This year. reported expense in the in million last our our primarily lower tax and loss effective in shares and benefit by hedging is tax fourth million related quarter the impairment. The goodwill other the $XXX the This lower-than-expected improvement used our during and of to net Sartorius driven value reflects in year. change well impacted rate of exchange Looking securities Also, the XX%. the rate holdings investment quarter, operating the was income non-deductible related below of income,

to it’s reconciliation in chart atypical our as margins. Now non-GAAP unique certain growth on at in important our excluded both we operating our press that have look we a that the are results items impacted and detailed and basis, items These note release.

dropped impairment small million, the as related to expenses path legal-related XXXX margin basis, is these starting the the supply operation a we margin This In from In Europe benefit intangibles intangibles of purchased of cost of non-GAAP basis. well goods as to adjustments XXXX, early on of of excluded for three as purchased amortization sold, chain XXXX. million fourth restructuring of signs step facilities move our restructuring, from another $X.X the compares to a and sum non-GAAP cumulative where gross quarter $X $X.X amortization early results to in $X.X of These of driving This of have the and consolidating represents that a operating along basis XX.X% of the prior to excluded optimizing XX.X%. R&D, of XX.X% at of a the in for the XX%.In on we represents XX.XX% result charges have results the in acquisition-related non-GAAP expense XXXX. quarter. leverage, This annual million, margin XXXX expected to one fourth action. charge. $X.X have in Looking closing good on non-GAAP will fourth adjustments excluded global expense savings in be cost to the of quarters non-GAAP moving a non-GAAP SG&A, in we of into existing operating to than $X.X sales. SG&A, of for in fourth of and of compared million, quarter million of especially margin XX% restructuring $XXX,XXX improvement, excluded to more quarter we to related non-GAAP The related and as a the first significant control our a million margin manufacturing well

million have equity our various in method the change fair of value loss equity from or effective $XX.X from fourth per small per XXXX a guidance with on $X.XX line market that non-GAAP in for a of call. accounting the excluded items and share, and share We non-GAAP of adjusted holdings sales resulting year. recorded net third these non-GAAP on XX%, and associated compares in last also improved the per of with finally, significantly to of over last mind, quarter given tax results. million just of our were $XX and which these quarter earnings income we provision exclusions and tax earnings the And for are $X.XX the all our XX.X% rate venture investments With our share in

life sales reflects are for of diagnostics. our represents the currency-neutral product ahead and report $X,XXX,XXX,XXX, to annual X% both at of results, Looking growth of regions full-year and science This we which growth many and pleased strength guidance. across

finished group nearly where product driven our Equally in and are compared This on X.X% life increased areas came growth back science as family, three course, science significant as media by increases the double reported was for in sales process an these X% China. record seeing Blotting. focus XXXX areas of view, we such year. a growth cell and and exceptionally our neutral. in annual PCR $XXX.X of And posted traditional the and all currency continued Our areas increasing the led of record product U.S. when of as food of for at growth strong digits more biology strong expression gene demand geographies, well product regional Droplet investment of increase sales satisfying From three life double-digit sales growth year basis growing is in business in a to impressive in XXXX million, key Digital All safety. and levels. solid by for Western our

$X,XXX,XXX,XXX, clinical were testing X.X% currency reported and sales blood by increase fueled growth in an X.X% control, quality typing a For was autoimmune of products. This diagnostics continued basis the and neutral. on year, momentum

From in consumable placed Europe. now the increased regional believe were which diagnostics the in to year, years challenges woes growth offset for to the sales Japan new X,XXX are behind ERP transition of most forward returning that China U.S., us. diagnostics bodes During view, more come. sales partially than the the continued much and XXXX. around We notably looking instruments by that we higher region are in in a EMEA And in we well and for sales in world,

including more the on XXXX, the margin non-GAAP mix, U.S. of full gross margin as while so to a costs additional typing with diagnostics various of X more U.S. mix associated in Europe. the that write-down is XXX pricing entry in pressure, start-up X, primarily market. was results associated the locations or was decline We approximately calculation, cost in our for Also, year were well and to included for changes transition around blood of efficient These model. basis XXXX. the to operating than This typing margin on XX.X% $XX Blood gross accounted as during not point an pressure to the XX our Looking estimate start-up in points. segment, but XX, XXXX our points attributable cost pricing the primarily in decline, new XX.X% of a to basis for the non-GAAP and entry a basis accounted putting product with of million into related inventory ongoing basis, compares non-GAAP operating cost Europe

an the the us. over for start-up to and European pressure part business, is products While coming and market these in are with typing into is margin long-term numerous during less note be will ongoing the And building of we direct and as we the build that of costs progress blood long-term the And years, a gross quarters product through the made mix behind costs on and year, believe the chain important we pricing related it the doing that of transition-related needle-mover. margin gross sales And both closure for the news more efficiency expansion. there the to consolidation good indirect procurement. of is warehouses also supply significant U.S.

or our for held $XX new full-year that XXXX. level, spend million lower year savings income million margin XXXX This estimated this gross the harness garnering of of net $X.XX already in flat from for share or SG&A to $XX XXXX margin, XXXX. would leverage. to basis moves more overall and result sales I non-GAAP SG&A the our improvement these substantially an than and points XX.X% million XXXX XXXX, in in increased X.X% should point to expense non-GAAP ability our lower-than-expected to to in to $XXX.X non-GAAP XXX a by evidencing XXXX And Non-GAAP basis XXXX shutdown also even During X.X% Bio $XX finally, expansion XXXX. to highlight is earnings the our the from contribute operating Despite million, was ERP-related the of more spend XXX XX% operations. increased of in $XXX of sales, million for the operating expanded more for coupled reduced than and in XXXX. per X.X% compared approximately with compared $X.XX, RainDance of margins

to balance sheet. Moving the

the end were quarter. on a and reflects at compared cash the of $XXX for primarily our used sequential of of program. total basis the decrease $XXX As at XX, December XXXX investments and short-term million million million, buyback end $XXX third share The to XXXX, cash

we the $XX approximately XXX,XXX During shares fourth quarter, million. purchased for

Additionally, buildings the quarter, biology during million growth. that the our $XX be we used will accommodate of to purchased expansion digital for planned approximately primarily two

make excellent progress cash our flow. We continue improving to on

This fourth year significantly cash operations XXXX. the from net XXXX exceeds was generated than we of just million, full for $XXX more have which than the operations all over totals from quarter generated in year cash flow and of positive flow reflects $XXX higher Cash For cash the million the in XXXX, we is generated model systems. reflects continue Moreover, inventory over management make recorded result to collections XXXX. both past our for years. optimizing and operating have improvement seeing since free been as progress we highest toward the several the cash and global

DSOs metrics result. the the As fourth with was $XXX.X $XX.X year these an the of basis paid for dividend days just EBITDA line XX.X% pre-ERP $XX improvement. quarter, is nearly cash more adjusted by bringing Sartorius million sales. and million disruption $XXX.X to the or more million improved $XXX.X from by quarter than conversion the property in expenditures XXXX, includes CAPEX Net during improved compares for including Full XX.X% margin XXX and adjusted XX points sales. million. of EBITDA was XXXX mentioned. our days capital example, of second the purchase were days our I XX year EBITDA, year, million the This or The in and for adjusted year-to-date XX.X% that quarter Full level

the buildings, million. million our the line year. for the year CAPEX Excluding full depreciation for in million was amortization and finally, And with expectations was XX.X of for $XXX XXX and quarter the around

let’s our in to XXXX. anticipates Today, continued range, as the top which expansion for for the continued as are margins. well outlook we to adjusted near share our XXXX, of growth Now thinking operating EBITDA excited and move stated sales

the with top start Let’s line.

could the more dollar current to that the For will the growth look be throughout basis, XXXX, rates, X.X%, what in see growth range. does reported four a but On currency-neutral to we we are year. to using guiding exchange sales X% X.X% like

the growth we at both to are components to X.X% estimated as drive new well products, segments anticipating growth, through look of expansion. as we geographic four As that the currency-neutral

science, life funding steady. be markets for in our we see continued as seems For momentum to research major holding

the of X% a estimate This point As XXXX. decline would also continued areas products. growth growth and science key such, out, significant and market is of all X% range, our of on in in year-over-year performance XXXX very in for the to recorded X% which anticipates regions product in top RainDance growth we anticipates of we life sales outlook strong

compared EMEA, continued rate, targeting range. This in in into a when currency-neutral reflect X% U.S. results, XXXX, market. growth the as growth X% XXXX the typing well we to to blood return are as growth accelerated in to For diagnostics, the expansion

margins in sales a savings Looking the recognize targeting blood non-GAAP to XX% XX.X% we higher the consolidation Europe to from U.S. gross in the with full margin and we coming typing profile our as on logistics the strongest the more be for later year XXXX, in year in are to for the basis, margins from

guiding margin, of estimating operating XX.X% CAPEX we XX%. to is XX% of the to operating are to be leverage. are non-GAAP drive we expense we targeted expenses development at to sales the And and to range the Research as X% and estimated rate tax manage $XXX and continue are XXX to XX% finally, For million.

the for end We the call target the are now we for profile, adjusted progress improved with margin XXXX. growth, XXXX, still achieve And the coupled line pleased few I’ll as with solid higher XXXX. a made the by and margin are to we top-line have targeting a of our in as progress to will incremental EBITDA also drive incrementally well of our Norman EBITDA XX% comments. longer-term in over The turn

Norman Schwartz

you, Okay. Christine. Thank

a So, bit bit to I has on take echoing a you minutes results. mentioned, of are few sense thought of first today. little give I’d already little we where our but what Christine A

day it’s to certainly As return our out able you targets to the making of historical but Not plan a laid of were at able midterm some increase year we’re of sales trajectory margins. clear first our profit and think at the investor only our progress. end steady I we to was this of XXXX, If begin the XXXX. about the know, growth, we’re we most

year, Europe, especially when back driver expense coupled products, science, bring XXXX, a our and at, with back with challenges, it if with XXXX. in look say, especially Christine mentioned, look was for SAP in some I When the demand was did disciplined strong we customers. lamented good it think control. I I life as key at which challenges

for that defense. versus more really results, so time from perspective, think regain confidence, And to manage sales I important this us offense on which a also I the spend think allowing to in customer XXXX, us. helped we was

of As progress Europe, measurement in a net satisfaction, a over rebounded promoter dramatically. of our year realized the measure the scores, customer past we’ve have

several some XX the procurement also warehousing seen distribution months, last from we’ve also function allow goal a our a to consolidated in or Christine a longer-term efforts a the cost near-term midterm on realize continued by advantages areas of from we in enabled to new months continue As chain, supply expect us and on data-rich where make margin The can and systems. rationalized progress in around to mentioned, improvement. global partly our chain progress XXXX We goals, the creation many leverage of only environment, not organization. over supply supply to and our realize organization to Europe last company in other IT good savings but get do

for have As up year. have Droplet year, be gotten important I the a few also usual, Starting off monitoring we’re clinical products market to lined to market in clearance introduction very BCR-ABL we able to new Digital our pleased this leukemia. FDA new the think for kit

been about continue of areas important in. blood safety longer for excited is market gross a pretty all some expect biology, as and number into market we’re has margin for – cell while typing to market mentioned, critically including outside market a in also term, research I’d market U.S. for headwinds, biology, is the position we’ve us food has that. Christine investing make growing the in term. And it this think U.S. that areas typing, our the short the created blood progress I digital to of

of for on Christine’s candidates is also sure the So, this and mind a good and both for field say, chief your a position. operating open officer I’m I’m we’ve that to question got position pleased

coupled us be mentioned, XXXX. the Christine top EBITDA with important signal XX% this achieving growth does And expansion. outlook will targeted XXXX the for outlook, of our continued toward margin on by end margin the step our increased line another As for our financial

about all we we this good opportunities are have say guess where I to year So, feel is that and ahead. the the that we of pretty for

So, maybe that, with it I open we’ll for think, up questions.

Operator

question comes with Jefferies. Couillard Our instructions] first [Operator from Brandon

line Your open. is

Brandon Couillard

your comments. the Christine, afternoon. prepared in appreciate good Thanks, Norman, all detail

number could you Are through around headwinds of would some quite you right savings takes to the puts you that hear carry those certainly from that to and behind And anticipate? a of you most you with extent components, at million benefits incremental margin first those you now, bridge and help observe the into in you year? supply us look from did and expansion XXXX. would XXXX, plus charges of mix If of inventory I the XX XXXX? the the You expect half chain over expect another some of

Christine Tsingos

for your Brandon. thanks question, So

manufacturing each us during the are the really now you in finally, been that’s to thing is short as down XX-plus behind going asked look probably So, leverage But as us. on you experiencing hear I’ll for well, us And any and quarter. What and as XXXX, and expansion at ahead I those that, extent forward, anticipate at in warehouses. over Yes, also, we’ve during get in start the don’t have the – year, gain over with and to with one not our more with of And other there we’ve looking into it’s then can’t that harder we’ll of in our any latter. we XXXX-time last months. happens And least could progress more XXXX impact or logistics the savings made think cost really mix, and like add efficiently us then of to side. that that well. time, be behind given of those certainly I think to say start to the terms particular predict you question, believe footprint, margin more we following on the procurement the the front to quarter about continue cumulative these in to some pricing a did can yes, right. or beyond we where term into shipping frame, mix the methods up our mostly that the I things translated certainly and us look XXXX woes transition And

term, long continue launch we products, to margins. help the the which new Over

would help can’t just that’s I the mix, It’s something front for or us of say push us. to oh, fact continue really margins. kind a which the higher doing behind in of of consumable it’s business. But We

Brandon Couillard

might to actual for better that is And products or can function question level confidence environment a getting in favorable? growth to a next some maybe your in diagnostics pricing And but new somewhat demand, be you just return of could of this EMEA speak more John that year? the of Hertia,

John Hertia

A combination of things.

think of transition Christine I mentioned some the woes.

I think diagnostics improving. hard in too. ERP we that was was I some XXXX XXXX was do the behind of I think there softness us hit that’s us. and particularly in some distributors market with and the believe There transition, behind with been lumpiness And think some are that’s

in I XXXX. IH-XX for in with, think typing U.S. strong. been approval the FDA we’re has got combination again, in submitted for that We and to FDA the that, IH-XXX traction anticipating approved. We blood incredibly products QX

a those bodes well for combination of think I two XXXX.

Brandon Couillard

tumor clearance? the for And question size that first for you for approval next how you of now female following technology FDA FDA Annette – ddPCR of indication, you plans quantify kind that into you see we first What BCR-ABL on Could do this solid the are the can can have your the the business. think you – the A space? opportunity tests? quickly market move can

Annette Tumolo

biopsy. think focused we’re know, on Brandon, you Well, liquid I

that having in is moving as So, it’s test first menu can first toward develop, on our people lab-developed step really tests well. building our also this a system oncology important the and and

we it immediately But large in their labs. from BCR-ABL be menu. follow-on it’s validated really the really people to everybody’s expect while content So far big for test results we adopting market we as expect so the don’t on our own as putting is platform develop oncology got own – there because a a uptake,

Brandon Couillard

you understand bit for CFO last stand a could bit onboard with that you I about expect a have you us where stage, And little earlier when someone more but is publicly? could search? search little announce And the that might you COO to specifics exactly Norman. one give the

Norman Schwartz

and good can. hard we’re working very soon identified as as filled we’ve Yes, to several very that get candidates, we

Brandon Couillard

much. Super. Thanks so

Operator

with Sachs. Our from next Donnelly Patrick Goldman question comes

open. now is line Your

Patrick Donnelly

on margins, guys. the Thanks, maybe gross those nice just see Great. to back. Christine, bounce

those of placements we’re quarters from rental that much start the calling And some impact that to a margins? initial there couple the a diluted Now you then margins of system of kind How to next using and inflection you for region positively consumables bit. an gross are through removed much it of how able to are flow out, are year? break level higher-margin

Christine Tsingos

part that just of the gross So clear, to the margin? inflection particular in

Patrick Donnelly

the the just consumable through on those? consumable – pull Yes, pull yes,

Christine Tsingos

Sure.

think are ago referring some the headwinds U.S, with blood So, those that But now have faced, to into higher of I happened quarters as originally placements it’s Typing just IH-XXXX consumable. you than bringing anticipated. we several the had like not particularly we the placements we and it’s all

continue have to new instruments. really placements of We good

to instruments. are U.S. stream and of will what that’ll so, be happen, new with consumable of a to higher always geographies. kind a other you and will all start-up a costs bullets And build Patrick, over cost will, with other instruments time, experienced absorb those products producing to you’re sizable little we’ve when These enough bringing what placing of this the if revenue, is in

we’ll a little about So, bit to the it. feel I think, for I us, quarters, few of next think, – continue it’s really

it year. passing building And of toward each with end of becomes why the impact. that’s the margins an Although, less kind quarter mentioned of we the

higher In of predict. drive consumable terms year. overall each and today the mix mix to it’s very high quarter-to-quarter, and instruments continue But consumables, difficult to and always that we have a between try we

Patrick Donnelly

million. should quarter And going that the balancing for the $XX the be thanks. with in the versus about cadence allocation get how forward? encouraging of guys very the repurchase M&A, then you How activity to see repurchases preference cetera? are we thinking started side, Okay, et on then capital And

Christine Tsingos

Sure.

profile, our increasing capital that to sheet our think, further, lines. continue believe we balance that along our have multiple have given So, anticipated I – even flow and the capability and we to cash allocation profile

pursue side preference we allow continues buyback that acquisitions. tuck-in think on to well, our the us continue something more to number both to program But I and transformational. capacity always the looking for as are Our will one acquisition, while capital be continuing with being said,

Patrick Donnelly

the hear talk expansions you now? then maybe that were as for then maybe levers It can now as your you the versus XXXX gave change nice when through years you guys guys was OpEx the reaffirm showed is came from, little And XXXX was gross to provided? level me. EBITDA Okay. number, Any last to guidance target, the progress, than to thoughts just get you margins two to the initially the And where in to it confidence over just nice one done, you that lower expecting in just when a key hitting there? coming initially

Christine Tsingos

That’s a Yes. good pretty question.

was presentation, bit not still overall, in not our And beneficial in think was is we XXX-basis of back I to you really that. point accessible probably investor XXXX the XX very will, when side think gross I you we stand very gain as but the think to But doable. margin quite we improvement, in continue focused much – is balance we’ll that the was I on that thoughts. is gross came see traction. remember be change we basis that the when from thought that initially, day the pressure. can a margin under proved opportunity if million well. still while has it outlined and think down as you expected behind SG&A to maybe kind we to of $XXX the that Patrick, come vast R&D in And point SG&A. XXX as and where and It majority our the And XXX the probably chart XXX another still in gross margin And about answer of

Patrick Donnelly

retirement. Christine, Thanks and helpful. very Okay, the on congrats

Operator

Bank. question next Dan with Deutsche comes from Our Leonard

Your line is open.

Dan Leonard

Thank you.

think when that more in question do tax you’ll Christine, tax on rate? rate. the you to your be a gain first a material able reduction So

Christine Tsingos

profitability And little restructuring to still great rate profile, than Europe, the that to challenges, profile gaining improve time your has of a think the to terms longer Yes, opportunity for over it where hoped. able share the that’s knows tax in had structures in work planning the of to through XX% maybe doing, there. rate we’ll mid-XXs the for And we might and additional as little. coming measures Europe charges, I is in the the be all to about European to these the the I obviously, who our led XXXX, question. you I But short expenses down new tax take term not tax when headquarter to from And as we’re the Dan, our of exist. of other both delayed but that, we’re But us through also we’ve just other a In where of run, therefore, moving situational that think evaluating. European and, We we’re that, and frustration. still we et think cetera, down from anticipate mid-XXs. benefit dampening not more systemic. benefit our continue all to look we’d XX%

Dan Leonard

And Okay, a then thank you. on couple diagnostics. questions of

into your for guidance got First in market? thinking one, reimbursement U.S. you on how you’ve factored are the pressure you about XXXX? that like impact the of customers Do feel

John Hertia

seen sort residual reality of have customers the trickled our reflects mean, but of much I – XXXX. forecast XXXX rates And think down, not our seen we’ve some the the in mean, reimbursement some We’ve U.S. had in I I in impact. so Yes,

Dan Leonard

finally, U.S. And or given changed that’s typing then writedown Can And differed you bring has bring the how market? outlook? the us DiaMed. on speed, goodwill Okay. us up speed, to happened what outside initial your from you just in up to John, can blood the

John Hertia

say, of with through transformation affected then. the gone a it, automated came everybody, slowness Well, us. And much it maybe gone largest a Asia has probably, well. The been largely reality of didn’t and market European let’s XXXX, say, the Asia conversion see, in the a in I that And and margins since to that’s our of part the part price XXXX that of I’d the just industry, the semi-automated for gross market, performance pretty highly very has of market. exist realities manual and would some pressure

both America property I us in European-based Asia get to and North there. think and in Potential reasons to was company, – for been and technical of it’s it’s largely DiaMed lot intellectual while was a it took a expansion. largest

We to there’s and similar market started conversion and affected automated think, could of to was progress then very a sort think we U.S. and good fast distance of the penetration how get are where to that overall. we reality of both. market now highly in and between the we making thought in make I But in XXXX the clinical from large a market, it, part a manual Asia semi-automated immunochemistry, largely chemistry a I business

Christine Tsingos

in pricing. I DiaMed, now seen when acquired was and the market dynamics we change that and world. pricing that down the over it the in U.S. equalize almost the Europe Back the much is U.S. pretty market Yes, big think come time double we’ve throughout the other of the of period

Dan Leonard

Interesting color. Thank you

Operator

was Barclays. Meehan next Our with from question Jack

Your line is now open.

Jack Meehan

congrats on guys and you progress Thanks, showing. have the been

business. diagnostics going the the business. was areas autoimmune Let you one me of keep Maybe called on

if to wondering any year? any there in you then what like outlook the add your in could was Whether for during give with have XXXX? U.S? the new you that And there us expect companies business your is changes is been competitive So, environment entering menu EUROIMMUN

John Hertia

John. Jack, And business. is the function of BioPlex it’s a largely – this It’s

placement business I’d syphilis strong. growth So, year and from some record very also recent system from a in for been lot HIV say XXXX year our and but The has of tests placements. Vitamin autoimmune, systems in another D. was that this has come

good seeing we’re growth So year.

first And the and that the is outlook quarter I XXXX, for U.S. position and point. you’ll both FDA, are and this We some them the they’re we the in a in in XXXX. new filed which second planning in not announce ones expansion assay see outside menu we’re think business, But the at I’d say, introductions with some overall of U.S. to strong.

Jack Meehan

maybe you I’m to just virus the how still one Do think performing? start the while, stabilize? What a conversely, is? And has outlook for the blood curious of that Or know headwinds is out what a further I been that that’s the Great. business where horizon? outlook on – then been point in there’s can

John Hertia

trajectory. It’s then, the steep it declining. it was It declining XXXX, not pretty slowed. still was in just It’s at

is that’s life cycle. historical business and just its microplate the of Some an older product later in

start looking an we new We’re XXXX, bit of see of and XXXX a I microbiology. that sort for begin It’s as trajectory right you’ll of little area areas to change. getting XXXX, Those hit a a at transition. in into lot in think but won’t is

Jack Meehan

to make last sure Great. say I please? those million I headwind, just Christine, And an you can collectively between think heard out, And the maybe then right. size, numbers on was I that have one process the the RainDance? just you $X and – was media want break life side, right science

Norman Schwartz

In XXXX.

Christine Tsingos

fourth the in quarter. Yes,

Jack Meehan

the much Okay, size how of was each? what –

Christine Tsingos

half. and half About

Jack Meehan

Thanks for the color. Okay.

Operator

next Our with from Barclays. Mitchell comes question Petersen

Your line is now open.

Mitchell Petersen

Thank your more just a talk or was Thanks. Yes, I cell anything you. the there? applications, little other applications those specifically is there new initiatives, any product update provide you could single coming bit an whether hoping on Digital? just Droplet And in in about of

Christine Tsingos

Okay.

talked the next-generation fourth think track where we’re of I So, platform and product this instrument, we’ve integrating bit we that a little full available are and year. get one of sales workflow on by released to our about inside for quarter the

forward all that. looking to We’re

are We single-cell working on products. next-generation

cell launch a in single to We application called new ATAC-Seq. about are

in in of of year and year a XXXX, or got end we’ve products the half the of the first so, one couple the one coming And toward early XXXX. hopefully new out in

mentioned looking that solid FDA CE-IVD-marked an liquid tumor with for we’re we expand I that area to cleared well I focus intense So, and platform for oncology via the have as BCR-ABL, the as our think And well. now in biopsy. platform menu

Mitchell Petersen

market? would I similarly, the gap the posttrial in current fill I was most then curious be you to an advantage strategy update motions. an trial, And litigation maybe with were that Tenax. on hoping then awarded in take the provide one that’s if what I’ve opportunity the about injunction, And of guess, it. you the been Got could and in the

Christine Tsingos

We to General say, inner going here. just my I’m about going to I’m ongoing can’t really talk Counsel litigation. channel So,

can’t much So, in what seen you’ve say press really I except releases.

Mitchell Petersen

Okay, fair enough.

Operator

a question with from have Couillard follow-up we Brandon Jefferies. And

line now Your open. is

Brandon Couillard

Thanks. the is Any you believe And the perhaps that RainDance out revenue I Christine, just market call a on diagnostics? the in headwind? you number chance a HLA as then, to QuickStep material exited drag clarification XXXX. a could on quantify U.S, John,

Christine Tsingos

headwind the Brandon, is $X – RainDance for the about So million.

Annette Tumolo

exit our of Largely business. from the Myriad

Christine Tsingos

Yes, the million. yes. $X about versus But is XXXX decline anticipated XXXX

Annette Tumolo

That’s correct.

Christine Tsingos

half? second the was what And

John Hertia

you on can question blood Brandon, second repeat Yes, typing? the

Brandon Couillard

the Yes, the that’s HLA worth if donor screening you just headwind second discontinued calling out? part, market, curious product the QuickStep in a

John Hertia

not all. No, It is small. very at

Brandon Couillard

can capital down to continue chance continue then, XXXX? And absolute the you on come there’s good just And made Should working expect clearly into the to front. sheet, some we Okay. inventories on progress you on basis? Christine, balance that think a an that

Norman Schwartz

that have focus XXXX. That’s for we certainly a

Christine Tsingos

know as year. there – very there. improvement. function, get we as think that some yes, Norman is I we’re big think So, don’t sizable improvement But And this working incremental continued a step on year. this I the inventory I did we anticipating mentioned, focus capital certainly,

Brandon Couillard

Very good. Thank you.

Operator

further Christine... no to time, the to this At I’d I’m turn like back showing questions. call over

Christine Tsingos

Kyla, can one please? time, you pull more

Operator

I’m not questions. showing any [Operator instructions]

Christine Tsingos

seeing All for and Okay. support to close hopefully, you, your we’ll you appreciate we really be and look as joining the today interest we And right. And Great. everyone, call. on XXXX. Well, us XXXX soon. thank forward Bye-bye. Thanks.

Operator

today’s and the Ladies in conclude This program. you for conference. participation does gentlemen, your thank

great day. Everyone, You a disconnect. have may

Bio-Rad Laboratories (BIO) 1 Mar 192018 Q4 Earnings call transcript