BIO - Earnings call transcript Q1 2021 | Bio-Rad Laboratories, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Q1 2021 Bio-Rad Laboratories, Inc. Earnings Conference Call. [Operator Instructions]. Thank you. it Mr. turn to like over to I'd Ron Hutton.

may the sir. begin conference, You

Ronald Hutton

Group. XXXX. you afternoon, the joining of Executive the Officer; Good our you. Norman all today first Last, the and me Annette Daskal, are phone and of Tumolo, Executive results Andy Ilan review the Vice Clinical Dara and President Life Chief Thank and Vice Chief President will thank Group; Wright, for President Schwartz, of President on Chief Diagnostics Officer; Science we us. Financial quarter With Executive Operating Officer; Today,

like that and Before subject making caution we in on begin the goals, response future our is review, about impact matters. of to statements and and uncertainties. events that I statements statements Bio-Rad's plans future on be steps based pandemic. would These operations will performance pandemic risks and are results expectations, regarding are Included our are to to and financial assumptions Bio-Rad the we the expectations forward-looking these in management's of taking COVID-XX and everyone forward-looking other statements

actual the Our COVID-XX will the of materially able may responses Bio-Rad's is and Bio-Rad be these pandemic certain for be to demand. demand pandemic COVID-XX-related to be We that duration unknown. cannot the sustainable Bio-Rad's that impact or the the results expectations, and that meet is plans will differ and from successful, this products

update made does and with call in these on factors in to today. statements, the The the discuss reliance I we our business. you where detail undue place our intend forward-looking any not during should company SEC to encourage statements You review the filings forward-looking not risk

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

Ilan Daskal

afternoon. us, you, staying families joining for Good these times. are we Ron. that Thank and Thank hope all your well challenging and healthy you you during and

I the our Andy ask detailed Chief Andy? provide first we Operating to I to in the environment quarter on an Bio-Rad's discussion, are begin current globally. would that Officer, like Before experiencing Last, light of pandemic-related operations update

Andrew Last

current Thank you, I'd Ilan, to state operations minutes take and the around a our to just like few world. review of

communicated, well COVID perform employees continues world As have previously to on now have impact as environment, to expected, and this adapted standards. the operations, highest continue we an our to but to our the around

and focus the manufacturing on continuing X of to progress sure customers; to some ongoing the world. and in increases operations with areas make of COVID support our making supply of continue the We be our to strategies. continue very safety we safety the employees; areas despite our in on previously continue core product we our ensure employee our communicated, Overall, pleased

for vaccination the and monitor transmission pandemic extremely policies maintained to closely the home we work workplace. from the we right are in the from rates Our adopted internal low, as and In programs. starting return the COVID benefit remain to continuing more XXXX QX, assess are we have general to timing we a

the to prolong objectives. cause anticipate there product materials on customer as is of has we're year. strategies more are meet global the accelerated to logistics second development as to to practice in the potential the our COVID, normal to attention quarter, the expect of and we constraints operating also and progress we QX, confident positive controlling enter close return demand continue towards half while experience progressing coming Provided paying pandemic least for we global but economy And trends at chain higher-than-typical the new raw to our recovery, As to our the impact in costs. supply demand core operations for starting ability

back I'll So Ilan. pass thank to it you, and

Ilan Daskal

Thank you, Andy.

would of sales were Net versus quarter. results a the like first a quarter of reported increase which the On for first million, to XX.X%. review a XXXX. $XXX.X I QX in Now on XX.X% currency-neutral the XXXX million $XXX.X is basis sales basis, of increased

growth to $XX year-over-year of to million first growth a revenue The impacted currency-neutral compare related XXXX about QX On we of experienced a cyber-attack. across revenue X regions. geographic the by quarter carryover tough December was basis, XXXX all

increase COVID-XX now and running strong for the the are increase XX.X% $XXX.X on and COVID-XX-related strength associated and of we that capacity, by Life saw in basis, is improvement a COVID-XX-related about were We reported qPCR estimate of about The products. what in quarter. driven million to we XXXX Generally, were in Science seeing demand research. product most QX sales a an Group testing compared first academic in $XX currency-neutral which of on basis. first XX% We million year-over-year million see related growth continued continued labs XXXX, QX. with to which the diagnostic Sales the quarter of the to XX.X% was in a a quarter $XXX.X is

Western year-over-year products. double-digit in In antibody growth sales we and Droplet PCR, addition, Block saw strong Digital

quarter on in a the quarter In strong year-over-year double-digit quarterly the year. basis, growth Media, which fluctuate Process addition, last same over can saw

Process sales QX Life business sales, Excluding a the grew basis, On a Media geographic underlying across of all year-over-year currency-neutral versus currency-neutral XXXX. XX.X% regions. Science Science grew basis on Life

a $XXX.X on currency-neutral in growth the the to for we reported a assays, to sensitivity highlight variant a and a ONE Droplet compared addition which BioPharma, testing COVID, advantage introduction of opinion Key of wastewater saw continue of adoption leaders In in XXXX, for to Sales applications the well of received. Droplet demand $XXX.X the basis. being are COVID QX is X.X% Group expedited Digital million growth of and million, PCR. in which PCR in continued Digital were we also Clinical QX the first quarter good basis, on X.X% Diagnostics

Amortization million During pre-COVID market is business, levels. still development $X or of routine returning in of compared the or demand see controls. in growth compared in XXXX acquisitions of initiative started in diabetes XX.X% Research geographic operating spend. income current versus lower to diagnostics basis, in XX% QX to in SG&A in year, earlier of lower million $X.X recorded $X sold quarter XX.X% higher The million or expenses sales with the the XXXX. acquisitions of Diagnostics was The million offset XX% or QX non-COVID costs $X.X and gross $XXX.X offset in mix, and QX a for discretionary XXXX. the product labs of posted related to expense to Group We was QX employee-related on this manufacturing million QX in $XX.X associated mainly restructuring restructuring quality SG&A XXXX compares increased cyber-attack margin due XXXX. sales million solid first in expenses initiative well a to the we of was to compared and of for recorded posted for year-over-year with restructuring increased basis, insurance quarter, million recovery associated or goods prior surgeries the XXXX a as and recovery and growth to year-over-year Asia. cost service SG&A of On XXXX. to gross quarter about or better XXXX. in QX $XX.X and The margin progressing. quarter million of expense a project reported expenses XXXX. was The XX.X% X.X% communicated related million was and by group million were and elective XX.X% with the QX expenses the Diagnostics to expenses expenses, GAAP spend. sales due related $XX.X of testing due that by settlement it of first to Total of to declined percentage mainly initiative million to was of XX.X% $X.X QX amortization as compared The with utilization. QX slightly the XX.X% of for to R&D higher $XXX.X $XXX.X associated in expenses increased cybersecurity

Looking in which of billion the substantially line. The results, shares the is holdings of income of Sartorius to below value reported added market holdings securities equity to fair $X.XXX related of change the operating AG.

other for the XXXX the net the interest dividend other XX.X% Sartorius in was million in income in million During dividend which rate $XX.X declared compared tax quarter. XX.X% $XX was quarter Sartorius, from included of income of to $X.X XXXX. QX. of The was for declared of QX tax income The resulted quarter, and last of year. second in QX million the expense compared effective large Reported In to this the XXXX, year and earnings the income due in first the by initiative last The tax was in increase holdings. Sartorius million, is increase the is to our from in both rates to $XXX.X securities. net were driven for year substantially valuation and an periods effective per earlier share announced related the were quarter of gain equity restructuring $XX.XX. year. this was unrealized diluted changes rate year-over-year This

on Moving non-GAAP results. the to

non-GAAP are in $XX intangibles, and goods operating a was press reconciliation of QX operating million, XX.X% purchased of XXXX purchased certain QX the well million, in in margin XX.X% non-GAAP of expenses reserve we excluded the SG&A, This as R&D, consequently GAAP a $XX.X excluded $X.X operating we of and of In expenses. a restructuring-related small first non-GAAP benefit. the first non-GAAP was margins amortization million unique have adjustments detailed of excluded expenses XX.X% for and compares moved of of gross gross expense non-GAAP the from quarter and of legal XX.X% income. to the intangibles of of cost These restructuring-related million XXXX versus at legal-related The SG&A Looking on the margin moving XX.X% in of the these atypical versus amortization basis, we we restructuring-related in basis of expenses have of that both XXXX. XXXX cumulative margin in million In a $XX.X XX.X%. non-GAAP have on million. excluded basis. quarter have in non-GAAP items a In operating margin The non-GAAP QX These margin in the basis, to quarterly gross Non-GAAP $X.X R&D other X.X%. result a of of on XXXX. a exclusions on items $X.X results XX% of QX sold, as table impacted release. to sum

equity investments. We operating associated are $X.XXX venture the with loss Sartorius have increasing the also billion, of items of the of million holdings and excluded $X.X certain value below line, which

net the impacted in geographic quarter income for The tax in per QX XXXX. $XX.X rate of in for Our was compared million, mix was non-GAAP $X.XX XXXX. non-GAAP effective million the And quarter of to $XXX.X rate earnings. and or was QX changes of versus first diluted XX.X% XXXX the $X.XX share tax share earnings finally, of XX.X% by per

the sheet. short-term end to were $X.XXX Total of end the Moving cash on $XXX balance XXXX. the investments and million at QX billion, of compared to at

of of purchased for average quarter, we price approximately at share. first million a the XX,XXX per During an $XX shares our $XXX total stock of

which $XXX $XXX quarter million quarter the the of to The and for or XXXX, of excluding generated was was $XX.X million, sales, EBITDA of higher the operating Sartorius The driven $XXX.X first not was was were mainly of in compares was include quarter million, million. which capital million first did dividend, the first $XX the expenditures Net cash fourth amortization the XX.X%. Sartorius XXXX adjusted sales, for The or For of in net profits. of adjusted EBITDA improvement XX.X% XXXX XXXX and XXXX. for $XX.X XX.X% depreciation is from QX by million quarter operations of QX dividend. and XXXX

and and to XXXX of the year though $XXX in continue given current and growth, non-GAAP duration we be began first about the quarter between now with $XXX estimate sales, and sales margin operating which we between be million. to our X.X% million projection year, between pandemic, of first most non-GAAP our between normalized margin projected to versus currency-neutral revenue and return guiding and project of guidance. be XX.X% versus a occur the and we sales on XX% our of remarks, XX% continue versus assume the year pre-pandemic gradual That during of and concludes X.X% and uncertain We be are a COVID-XX of impact a of XX.X%. now million about margin XX%. to business guidance be X%. and Moving and COVID-related to previous year XXXX guidance This our $XXX margin non-GAAP to $XXX now questions. the million includes to mix. growth XX%, prior between about And your to Even and full EBITDA the XX.X% outlook, results XX.X%. of the to X% previous estimate about the to the take will full We gross of and COVID-XX-related XX% continued year half open operating line is a non-GAAP activity adjusted more we and Operator? the Full prepared we

Operator

Instructions]. [Operator

question First of from Jefferies. is from coming line Couillard the Brandon

Brandon Couillard

that with before? the target the And in Ilan, that balance embeds continue would that what to of balance terms Could starting talked you whether talk organic of outlook. of you about with the guidance maybe year? think It just be diagnostics can X%. about ramp about segments for you suggest the year to updated the double-digit the growth two maybe over flat would plus

Ilan Daskal

Sure. to case, organic sales? you ex-COVID believe this Thank in you, Brandon. refer that And I

Brandon Couillard

Yes, that's right.

Ilan Daskal

we I'm for Actually, sure that -- It's X.X%. first if flat. quarter year, for the sorry? full you the So about year-over-year, are not referring? math, Or you And at are about the run

Brandon Couillard

suggest that you flattish, it the quarter. is would in did organic the XQ XQ given about first including COVID from that the Well, XX% dynamic, to

Ilan Daskal

Okay, okay.

QX over So quarter-over-quarter, you the compared QX?

Brandon Couillard

Yes, kind to be to the get year. of the amount of trends to full the here,

Ilan Daskal

QX. on fair. quarter not I us, strong a would that, of usually highlight that is kind and QX the that's seasonally, usually, as strong Yes, for quarter Brandon, is first as

is So actually, an result. to having quarter a us excellent flat

Brandon Couillard

Dara. that as be Diagnostics? the better the assumes what lagging? improvement, was The we've specifically as quite of the an to a seen other core Curious X% in lab central case growth for guide why not quarter which for speak and a might Maybe first that's some material you from rebound question but areas necessarily Could peers. are

Andrew Last

the from quick, strong strong Andy some the So 'XX. Brandon, -- had in of speaking. We maybe of year, it QX Pac pretty were QX. a in but I was region recovery of we the and diagnostics make say it's Actually, business so attack last carryover to had in can that pleased would included December show more I COVID Asia broad-based, We as the ninth started first cyber the a impact with that start XXXX. it's that fairly a and in the negative

for meeting say for I'd our it's our meeting really -- So expectations year. it's guidance the

Brandon Couillard

lines. Are gotten a a from may that year? lot areas have to pushed SG&A, on new down you help some for trend dollar sequentially. line? over perhaps right in and basis, some shifting Maybe out Okay. there was the of outs to that the understand finding in later timing cost us Was year-over-year Just P&L just some to investments the benefits maybe now? some

Ilan Daskal

Sure, Brandon.

highlight a So to here. there are probably few components

reimbursement, the First, the $X million we have insurance the claim. regarding reimbursement cyber-attack

that so those, associated later million. other still kind environment. from would aspect assumption. I the be probably will lower by come expenses we if the so for that, higher with run is, the rate, it's discretionary COVID-related And $X of to that That's needs And normalize believe, a our back in kind year. Then you of, normal highlight

it planned of hiring that of still some the also we year. have And for remainder the is

these are components main the highlight I So probably that there. would

Brandon Couillard

test, PCR then COVID instruments, sort in And revenue break PCR down other? might be your new contribution, can and much between and EUA of COVID contribution related Okay. of research the the you terms how

Ilan Daskal

vast can qPCR is I majority Everything So is say vast smaller. definitely the way, that's way, way instruments, the that majority. else the

terms in as the we still have quarter ratio qPCR So the in of instruments. the the prior of same experienced it's

Operator

[Operator Instructions].

of from from Next Dan Fargo. Leonard Wells question coming line the is

Daniel Leonard

Thank you.

way. to question Brandon's in a different I'll So ask try

raise, of the the QX but QX magnitude appreciate the actually your than guidance QX through raise given are worse strong that thinking. performance, I suggests initially So was

So are want you'd flag? any offsets to there

Ilan Daskal

incremental in portion incremental how did the some kind about is math, assumptions COVID-related the So you generally run quarter with of guidance the associated that sales, later of with year, the of but I first it speaking, of Dan, the we can I'm sure -- also it not some most tell your kind -- is last And associated think full way quarter. there. low but you think X% is from about benefit experienced the about it year double-digit we Diagnostics have is it kind -- we of of for a most time of first you still flat a we assume, When now that in perspective, about so. or the Science, growth it's Life said maybe

upwards guidance So quarter. it's the from an definitely, updated last

Daniel Leonard

dynamics in margin you well with the higher can year? for forecasting And the given strong than your the so to COVID speak and full were that what products, margins QX Okay. associated you're just

Ilan Daskal

Sure.

definitely and a of about sales and million, first driver year the of quarter about on the volume between footprint. high utilization associated level, sales quarter, in the of $XXX think above So company that full are in to is COVID-related about $XX average, we the guidance million strong us, If and Dan, million COVID-related manufacturing was it's the mix. a that $XXX for which with higher was

you when probably to So get of with can to for year, said, going in the you gross the XX%. guidance remainder blend lower it of is updated upcoming of quarters. the the XX.X% kind With our guidance, margin be year full that

Daniel Leonard

P&L, And plans? your with but the love how recently you're restructuring Okay. color update we'd you progressing We an question. some initiated expenses Can commentary. offer on see in final the

Andrew Last

planned. [indiscernible] in in Yes, functions, release. communicated sure. progressing This as of We've is a is got we multiple going and as changes predominantly we press lot our Andy. had Essentially, on Europe,

to take through. So all of those plans They are work proceeding. time

the majority of until we've think the kind the net that be benefit That's XXXX. won't before communicated of I case. still

in with we're early restructuring still point pleased this efforts, time, progress. at the it's our So in but

Operator

from the is Next Donnelly coming Citi. Patrick line from question of

Patrick Donnelly

building one. Ilan, that on last just maybe

of even the in about margin then you're are SG&A, And that terms you increase, the activities, to, levers cost that talk thinking bit number some moving combination you In restructuring year? the the kind thinking can this about, how little guess, mix? just terms of guidance of up margin different a I leverage restructuring, of

Ilan Daskal

Patrick. Thanks, Sure.

the not out we do think think be when of this restructuring, you So there generally about benefit the year, speaking, that restructuring. would much

We we The general of and the much you since sometime benefit margin, and been to to a and and we specifically, operating we communicating kind in fully the expect do -- next strategy, what But long-term the restructuring. part it we XXXX, gross gain this again, see of in and volume that's to are of year, anticipate out mix some part margin, realize start experiencing right to benefit and benefit that margin our alluded year, that's December. kind will to have of it's start, not it's and now. gross for of

Patrick Donnelly

understood. should guys see buy And side, forward? about on Norm then moment. of timely your feeling table? deployment the Always update stock, from to Just back pipeline? the on How the thoughts there like you're in still at we the some good sounds the Okay, get well, nice you going that nice very price. think a as to larger Is terms how deal an about cap

Norman Schwartz

Obviously, Yes. this Norman. -- we is continue

pursue area. to continue active be at look this continue very We several did first things that the landed yet, but quarter. We we've in we Nothing inorganic opportunities. these in to

Patrick Donnelly

little how an of becoming you opportunity. do that should of last think over And you one Annette, opportunity, hear a quarters? of for I that? the market then were nice couple know call And about overall? the How about you developing the o you U.S. talking that because out bigger think on we How guys it's just maybe it's quarter, strength. about last wastewater to --

Annette Tumolo

into it's million could the this it searching developing the imagine million $XXX mean, Digital product When think we develop which in Droplet needle strength platform It's application. you was the or Sure. time, almost $XXX you're market, is but rapidly. this I essentially, a about days. a that said, a you're PCR opportunity, is early of think I could and That over made what to that we haystack, for a do, have. trying for brand-new

this labs, now and really good Europe So government it's up. was now U.S. are as geographies in and well. spread service pickup picking getting a university labs At we're opportunity other first, across

for think for well. we're I putting on we've about assays So that all working wastewater to online we're and people optimistic variant worked interrogates kit specific on a the as buy, it, variants and

Patrick Donnelly

And just one Perfect. Okay. last for me, housekeeping.

on and some front was I Tenax. news just where there Can give you a us quick think the litigation there with flow you update stand?

Andrew Last

that I'd and that findings business. say so really this is, earlier really by unexpected doesn't so was International and court today's the it our our Yes. upheld at federal not impact comment was decision the circuit Commission appeals all Trade an

around so this make think And at comments point. that litigation would the I that's the only probably we

Operator

Next is from from Nephron. Jack

Nisarg Shah

Jack. target the is third beat way, was first up the and above on To is question X quarter XX% much Nisarg for This guidance full all why Brandon's that which only forecast, by? I point. Dan did moving ask your our surprised by It think how a is we're internal year

Ilan Daskal

we business mean, generally the obviously question. is assumption we be speaking, for the to first you thanks we the have that speaking, -- that So in generally usually sales of stronger-than-expected by last the not that's COVID-related do we mix experienced the we did half of year, alluded the it operating the emphasized share going let I first quarter, under we today of guidance first in recall our and year. and most most And quarter of to, normalize. if of but guidance you, in we from And sales. the are indicate COVID-related quarter, right? will me the And that half incremental with so guide all, second

So I think consistent there. we pretty are

Nisarg Shah

Europe in And what's markets North elaborate Got Diagnostics you're relative a basis held like it. APAC? Could America? on back versus growth those you regional the that in and seeing also on

Ilan Daskal

take want Dara, one? do this to you

Dara Wright

Sure.

the by broadly they've lines regions, in mix opening dynamics COVID. said we certain impacted certain what there regional to non-impacted are of the related in to levels, XX% pre-COVID but percentage comments, and been So are and around product or operating we're how embedded in sold as largely there,

a perspective. and some So APAC was in we to moderated is largely from pre-COVID that strong, then where makes immunohematology, strong closed, still except getting where region being really North sales America a of so is sense. level driven very Europe growth that's there's up have performance elective that And surgeries, that by is and coming which by that And COVID. line diabetes I we've in other quite Other of China, is kind from China back very particularly, continue that's is Pacific think where of really to be too, challenged were really seen product scenario announcements, strong strong. QX. parts Asia the

So it's kind of frankly. a country-by-country story,

Nisarg Shah

it. And more. Got one

what the vaccine? growth And So the you're was think in for Media demand you quarter? do Process in seeing COVID

Ilan Daskal

For repeat? the you growth The first can what? question, of

Nisarg Shah

was the Process quarter? What in growth in the Media

Ilan Daskal

Oh, okay.

was So growth double provided got what digit. Media. But -- ex-Process the yes, you for Life we Science, a it overall is the

So number out, kind was there. can engineer strong. the kind of it of reverse you probably But very figure

Nisarg Shah

that, you do vaccines for you're COVID seeing And with think with demand that?

Andrew Last

you getting I vaccine some player, of particularly. nothing one mean but probably -- the expect we're selling that effect, not you I in into a like we're segment, segment. COVID All you if this major know, were as think, would majors

Operator

Instructions]. [Operator

We have Couillard of coming question Jefferies. line Brandon a the from from follow-up

Brandon Couillard

Sciences, revenues strip drivers was like we COVID-related that? XX% looks first just base if primary out something Ilan, touch the like Life in on quarter. growth up the Sciences of of you Can the out organic Life the it

Ilan Daskal

Sure.

strong, But those. specifically the a western was more the almost it you're Annette, across when it, Life blotting, Digital the want you so to right, we PCR, sorry, number. And think actually, well. but antibody, about the Science. growth all we do saw Droplet you that indicated nice as growth verticals nice anything? had others add also And And of

Annette Tumolo

with the the lab add, fueled bench. were all pleased back to as the businesses, some some for people that probably and across are products the of The No, I of lab recovery return we to really have was just strength at going demand that. we by pent-up core the

Brandon Couillard

then material expect running initiative Got you, in Life impact in the before, new from gross revenue recall for an this And for Bio-Rad? trade-up commercial the this like in this more noticed a quarter. something XQ? Is second should Annette. or instrument don't and margin maybe you. Sciences you're seeing one we program U.S. I in any We

Annette Tumolo

are program which sorry, I'm about? you talking

Brandon Couillard

an PCR, touches proteomics, DD flow, culture. touches program trade-up that It's instrument cell

Annette Tumolo

Okay.

So is, Look, the if those in yes, we wasn't it sure question it's of sorry, return on And wouldn't program. we be didn't kind general in you program occasionally -- we put our customers. which answer doing to. for expect referring to that were just I some I incentives your the think

I think time to center driving it's from our commercial of that it's our runs organization certainly of typical the but not that growth, the at promotions of all of one kinds global what's time.

Operator

[Operator Instructions].

this at you questions no Presenters, have We time. continue. may

Ilan Daskal

Thank call. all soon. you and for joining your today's to connecting we forward interest, look We appreciate

Operator

This participating. concludes today's conference call. Thank you for all

You may now disconnect.

Bio-Rad Laboratories (BIO) 30 Apr 212021 Q1 Earnings call transcript