Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen. Thank you for attending today’s Bio-Rad Fourth Quarter and Full Year 2022 Earnings Results Conference Call. My name is Tia [ph], and I will be your moderator for today’s call. [Operator Instructions]

I would now like to pass the conference over to your host, Edward Chung with Bio-Rad. proceed. Please

Edward Chung

provide afternoon, will you and review XXXX results Good today. joining full and key financial we on Today, the and everyone, Tia. for for thank us year business Thanks, trends update Bio-Rad. an fourth quarter

the Executive on Norman are Dara Chief May, Group. Officer; Vice Ilan President today Executive Chief Financial President Schwartz, President Simon Life and Executive and Wright, Vice call the and Chief Science of Officer; Officer; Clinical me With our Daskal, of Andy Group; the Last, President Operating Diagnostics

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

the may actual the plans it and pandemic expectations, potential predict from have extent difficult materially to could in Our and is the impact these full differ results of future.

forward-looking place where filings statements, not on our review detail in business. discuss I undue should the to reliance in with encourage you You we and SEC, these our the risk factors

update to during made statements not the forward-looking does any today. company intend The call

of net earnings to financials Investors results financial our Principles. under our and release. Finally, the Accepted measures defined references measures not the contained including earnings review income are Generally per should non-GAAP GAAP include non-GAAP to which in reconciliation that remarks diluted comparable share, are will these Accounting

Daskal, turn over to our With that, the call I’ll CFO. now Ilan

Ilan Daskal

all Good Ed. thank and you, Thank for joining you us. afternoon,

discussion, like Andy? provide Officer I Bio-Rad’s I the ask year update Last, our and Operating an operations. detailed fourth to to Chief Andy would begin on full Before quarter global

Andrew Last

everybody. Okay. Ilan. afternoon, Good thanks, Many

supply we chain improving QX, our situation. focus continued our on we As enter

the a and component but constraints still production During for less chain problematic, primary quarter our was demand. persisted instruments, on of were meet number focus supply some overall to

result, a the reducing As quarter. made we progress backlog our in on solid

However, product elevated for as Life Diagnostic QX position on both exited impact And Science a there sales still businesses. we an backlog and expected, our with was resulting Clinical mix.

Inventory continue levels supply as remains reduction support and to we secure backlog demand, source to manufacturing high continuity to year. coming components through Singapore, our the better transition

product pleased although continued While us. support still purchases level high work earlier backlog QX, logistics XXXX, persist challenges have to been we supply extremely materials the through our throughout to showed costs higher of willingness in of with from in improvements experienced Despite and customer year. cost the the with

demand from COVID operations anticipated infection were employees. from changing diagnostic government with effect Overall the line exception COVID-related of zero-tolerance had the impact and of in quarter, This China, our China. in business As our were policy in the to roughly previous in during on of routine and sales diminish, percentage also a Bio-Rad policy on country within the to large particular effects to impacting rates expectations. increase a a our our led significant negative tests with their back continued global where normal

Cancer and, PCR the recently in fourth platform. Sloan research diagnostics for QXXXX platform. our placements displayed pleased demand also across were Digital The cutting as is of such the strong include quarter test Initial from trends Biodesix, very Center risk strong adopters continued company, oncology portfolio Memorial a testing Kettering minimum edge we and the on with residual disease launched which customers particular, developing at Droplet a

for an with oncology of next digital development the we generation multiplex entered fourth NuProbe exclusive to quarter, assays into highly during the licensing Also accelerate PCR agreement of applications. note,

strong a we pipeline strong As QXXXX. we developed to many of expect enter of in customer growth of with see across have segments XXXX. Droplet portfolio thousands for And our assays, our the multiple PCR in XXXX, portfolio continued conjunction we now Digital

also pleased this strong business growth chromatography new columns with our displayed and double-digit performance QX [ph] of launched we resins] of as and vaccines. are as continued sales increasing of the and recently therapeutics BR process the well [new biological interest our in franchise pre-packed adoption for

Looking to continue and of to strategy. our we XXXX overall our disciplined demand execution remains drive strong,

scaling our some demand, particularly in backlog have second in supply half and normalized the challenges instrument meet we is the production still anticipate our on backlog in clinical year. we reduce activity chain, primary be business. will While the of And now growing to diagnostics

Also in to the our Digital X planning back Continuum, single-cell new generation a development pipeline, of PCR next Continuum second Droplet introduction our QX an the designed be for half the The from are of the generation that’s and year, with platform. effective. represents integrated we workflow system platforms cost

Our single-cell single-cell the application targets multiomics large market.

not in any COVID-related anticipate pandemic sales the behind do we With meaningful XXXX. largely COVID us,

monitor and continue Russia we and potential the addition, war for to Ukraine downside. and sanctions further situation In

for Thank to you pass you your now And will back Ilan. I attention.

Ilan Daskal

Andy. you, Thank

the currency million a I Net fourth XXXX year-over-year revenue were of the quarter is XXXX. of to a decline quarter on million, basis, X.X% $XXX.X review fourth basis, versus X.X%. neutral in for was would results the sales On the Now, like QX reported which $XXX.X growth year. and of full

the to continued million $XX sales quarter. taper and COVID-related in were about expected As

chain core basis, on and the ongoing Asia, core in revenue, modest for excludes currency Year-over-year COVID-related year-over-year growth Europe diagnostic faces. double-digit a sales, while neutral currency primarily we On more posted experienced Americas reflecting revenue geographic which supply a products. constraints XX.X% a neutral increase, increased

a XXXX XXXX, neutral on million Science on $XXX.X ended increase despite of is in currency to the with XX.X% estimate expect which Sales and backlog approximately XXXX Group the mentioned elevated in QX $XX fourth basis, order about of we Life we Andy growth of were $XX million. million, chain, $XXX.X a an supply of compared of of million, quarter in that improvements an retain we the which As over basis. earlier, to XX.X% reported

by year-over-year currency process Science The was growth Life growth the in chromatography was underlying backlog. and of XX.X% core primarily benefited revenue and blotting. Western Digital year-over-year PCR, Droplet The order part driven from reduction neutral

also good uptake by in We for the growth part qPCR our driven platform. of CFX saw our Opus new products

double-digit customer XXXX. a and more experience continued our introduced And contribution demand growth. strong for again which from the chromatography We QXXXX quarterly revenue interest posted initial expect in meaningful recently to fluctuate ddPCR can this system. platform we basis, strong year-over-year on Process

the partially X revenue on growth lower neutral all a sales. Science currency offset currency and experienced XX.X% business COVID-related COVID-related currency a XX% neutral Excluding regions. QX also basis, Life across basis. excluding was versus a neutral sales, geographic process core chromatography revenue sales, growth XXXX, was by grew underlying Science of On on year-over-year basis Life When

Sales Diagnostics quarter diagnostics basis, revenue, which a a COVID-related decline currency is an fourth sales, Group X.X% XXXX, declined on Core X.X% Clinical X.X% on million, in of $XXX.X compared to reported and were of which the excludes QX $XXX.X on in a basis. clinical decline year-over-year the currency the basis. million neutral neutral

Group year-over-year Europe instrument a the across in Diagnostics of grew by and which placements in geographic ongoing the in consumables. currency delayed chain constraints, and Americas, which Diagnostics basis, supply Clinical On impacted platforms group uptake multiple declined the core associated and revenue, neutral Asia. primarily revenue was

In impacted volume lower in China, also Pacific resulting of by COVID addition in dynamics to supply were testing. chain constraints, sales routine Asia

years accounting that corrected the our of these material that believe During during overall key determined capabilities incurred developing financials. XXXX have XXXX, capitalized. the are we to enhancing fourth and expenses associated a quarter should X cloud-based XXXX been with policies, our changes We R&D and through

this and filing. reflect We statements it correction, our revised our reflected financial in will be to historical XX-K

margin full of to about XX margin, million, about XX basis about $X year XX basis the for margin. is $XX or points. full adjusted million, benefit year benefit correction about was For or for million, the or XXXX, points and points operating basis headwind the The gross $X about EBITDA

By XXXX benefit benefit with points, $X an XX XX margin of headwind full margin gross or points. and about million, or $XX basis adjusted million, be XX operating $XX comparison, basis or estimated of margin points, EBITDA is about million the to year basis about

we it we equipment installation, to of on quarter. addition, to million the $XX In related revenue the certain recognition that million requires to and of our $X policy revenue the corrected contributed onetime believe timing that

fourth QX a COVID constraints. of The in of to XXXX margin with gross XXXX. higher quarter XX.X% quarter reported and of costs sales associated was an sales, for the reflecting chain margin lower to on instrument XX.X% The mainly year-over-year and raw product compares due gross fourth higher percentage mix, supply was basis, a material GAAP decline unfavorable

year-over-year of XX.X% XXXX. compared XXXX or compared for of was partially stronger requisitions expenses higher related of Amortization recorded $X.X XX.X% related XXXX. in but XXXX. to QX due dollar were offset the normalized expense $X.X sold million goods acquisitions decreased cost QX versus expenses to in benefits, for of quarter Total by as of in was of SG&A to $XXX.X to was to QX million million in in discretionary amortization The mainly SG&A $XXX.X or million, QX $X.X prior $X.X spend. million the employee-related SG&A million recorded and sales

sales sales, was compared investment. quarter operating and $XXX.X X.X% X.X% was XX.X% or consistent of or million, in of development R&D million, QX XX.X% of the of sales, to or sales with in in QX QX and expense to of million, our $XX.X million, $XX.X income targeted Research $XXX.X fourth XXXX, of compared XXXX. or

operating below related Looking the securities of $XXX which ownership in fair value income shares are million Sartorius holdings, change added of to substantially the results. to Bio-Rad’s line, the reported AG market equity of

other year. compared with impairment. a net charge income million resulted During of of other $XX.X XXXX included in other income expense the net last million million $X.X and investment quarter, an of interest associated $X.X QX to

$X.X The partially Overall, XXXX from balance, we our tax expense compared related XX.X% million notes. fourth cash the quarter same offset to an of million interest in rate the affected in in in was recorded the XXXX in And to XX.X% $XX.X unrealized primarily for effective QX unrealized by of The $XX.X tax fourth billion by equity quarter period income for our securities. was partially generated QX the rate XXXX interest tax effective during securities. loss in of was in equity an gain by XXXX. affected reported rate

share billion the XXXX. of the per earnings to of Holdings. year is diluted or valuation share, $XX.XX fourth to last a a largely quarter net in diluted from million for QX $XXX Reported was related $X.XXX This per $XX.XX income Sartorius of the loss in increase changes loss of or compared

Moving on results. to non-GAAP the

a atypical table items in gross the operating as the are items on the margins, certain results in basis, reconciliation well detailed These the excluded both at we income. that Looking release. as other impacted and have non-GAAP press and unique

small a fourth moved restructuring XXXX benefit. results of QX excluded was quarter of sold, XX.X% In the for quarter. of Looking versus margin intangibles a fourth in non-GAAP gross for million cost have Non-GAAP goods $X.X margin XXXX. at and exclusions quarter amortization of the to gross These QX the the purchased the of XX.X% of XX.X% SG&A in XXXX non-GAAP of of fourth versus we XXXX. in XX.X%

$X.X on diagnostic $XXX,XXX acquisition-related of a basis, million, purchased benefit previously we intangibles of in non-GAAP fee expenses legal of expenses. for products amortization of excluded as related restructuring have Europe In well and $X.X in registration and SG&A, vitro of approved as million $XXX,XXX

non-GAAP excluded R&D GAAP basis these the compares of a restructuring operating moving fourth a operating quarter we cumulative QX in X.X% quarterly XXXX. The of benefit. to non-GAAP in XXXX margin have basis, In XX.X% small result a GAAP Non a expense XX.X% margin was QX XX.X% This non-GAAP margin on in the on XXXX. R&D of to versus adjustments from on non-GAAP in of basis. sum of operating X.X% a non-GAAP

are and loss of million associated equity the which items line, investment certain the on investments. loan impairment, We an of $XXX Sartorius excluded million, $XX.X have and with million in venture below receivable the a also value operating increase securities loss $X.X

income for tax share, compared is per The the non-GAAP rate XXXX XXXX. net $X.XX share driven effective of higher million by geographical quarter diluted rate XX.X%, fourth earnings year was earnings. diluted our rate or quarter for in of And per $XX.X was the full XXXX. $X.XX or same million The of consistent mix compared earnings XXXX the of in XXXX of to period non-GAAP to tax finally, XX.X% in $XX.X QX which with for fourth was guidance

with a year full sales Net XXx. billion, XXXX million a X.X%, and for X.X% in a full full XXXX. excluding to on X.X% about royalties by of $XXX neutral a currency for basis full sales for $X.XXX were XXXX the $X.XXX in year currency XXXX, million on million, a from compared the to grew reported is on bake also XXXX. $XXX onetime basis, decline compared which as basis. were billion neutral year the when year Sales net XXXX Moving sales results. in increased On $XX in settlement COVID-related

the which when billion, year-over-year Year-over-year currency settlement, settlement, excluding the X.X% excludes increased excluding were $X.XXX the legal Science revenue, Life growth core neutral COVID-related basis. a growth currency on Sales legal COVID-related the on the year-over-year XXXX sales XXXX basis, was revenue Group was legal core X.X% Life and XXXX neutral Science and of sales neutral settlement, XX.X%. a currency for

of three year majority chromatography, a neutral currency Western revenue by regions. Science our driven and across was products Digital year-over-year process the Life The blot. core growth qPCR geographic full On grew PCR, all Droplet core basis,

geographic Clinical on by a growth year sales, neutral Diagnostic in currency due Clinical was currency X.X%, Diagnostics while revenue Europe, XXXX the Asia of was Diagnostics when core revenue On full core primarily products lockdowns COVID-related which were Clinical neutral which year-over-year impacted growth Sales $X.XXX COVID grew neutral supply X.X% Americas excluding currency basis, constraints. sales a in in billion, basis, China. and is to chain declined for

was and to material lower compared expedited EBITDA ago the software comparisons margin and higher year driven non-GAAP capitalized raw as of XXXX. revised operating to our due year-over-year been decline earlier, year well higher modestly costs, margin gross logistics XX.X% as by mentioned have adoption gross use full mix, margin costs. XX.X% product was As internal for The accounting. freight COVID The adjusted in mainly sales,

SG&A The discretionary million or higher XXXX. by non-GAAP and of a $XXX.X from more expense employee-related XX.X% or costs strong SG&A to million spend was XX.X% lower $XXX compared year in benefited expenses. somewhat normalized sales offset Full dollar

in non-GAAP the supply chain expense R&D X.X% X.X% compared non-GAAP or year year in largely was was XX.X% or to operating our And R&D $XXX.X due full constraints year. XXXX. $XXX.X income Full during various to XXXX, XX.X% – of impacts million, versus million the sales of past

range effective non-GAAP consistent of full the was the which tax compares XX.X% year to and rate guidance was our for Lastly, XX%, XXXX. XXXX in with

to due at to at at investments the quarter and repurchases. $XXX for compared investments and billion billion of was The XXXX cash total the sheet, third the and the end of was on Moving XXXX end to share the quarter short-term the $X.XXX balance million third of capital short-term end change XXXX of and XXXX. of cash $X.XXX in primarily working

our $XXX.X Inventory due materials. at mainly from million quarter. is reached chain the of in the constraints, inventory million higher end prior $XXX.X to increase in QX raw levels The supply continues to carrying of and reflect

As we to XXXX, expect inventory quarters. constraints we levels our anticipate chain would further next easing over X in supply in the lower

activities fourth XXXX, capital. operating the in This XXXX. compares from quarter of was million in For million, of reflects $XX.X working cash decrease QX net generated to changes mainly $XXX.X which

capital. changes was $XXX.X For the million full in also generated reflects net from decrease working mainly year cash operations This $XXX.X XXXX. in million of XXXX, versus

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

be we under XXXX, million of to have buyback continue We program. buybacks about XXX,XXX the shares year In program. $XX our Full we XX,XXX for opportunistic for Board approximately a still $XXX million. authorized total share our As $XXX share current stock of totaled available shares approximately purchased million. with

and XXXX XXXX of including $XXX.X quarter the in XX.X%. was EBITDA XX.X% and were $XXX.X million. CapEx the for adjusted or $XX.X year million for and XXXX was QX year sales. quarter Depreciation quarter million adjusted XXXX. the Adjusted fourth Net was the The full amortization for to was about for capital was XX.X% spend million fourth in compared Sartorius year. the $XX.X EBITDA expenditures EBITDA, XX.X% of fourth $XXX.X million, dividend of of Full full

created to about XXXX, financial our anticipated and non-GAAP while have that thinking is more XXXX, challenge guidance supply on XXXX the for our we the Moving constraints not does than believe change chain outlook. a during it transitory,

XXXX. backlog We the that recover And XXXX, I normalize. earlier, mentioned as we about our to backlog continue of will $XX from backorder to expect order assumed million dynamics in

to immaterial neutral growth not the in neutral we XXXX, When revenue XXXX a sales, are and Starting XXXX revenue anticipate growth do in sales, currency its COVID-related contribution between to our overall estimate We X% in breaking XX%. guiding we becomes base. excluding revenue X%. between out XXXX as to be COVID-related and currency be XX%

to normalizing Science Life Science for between revenue year-over-year and revenue X%. COVID-related to growth The When expect year-over-year be sales, for Life Group and we growth currency currency Group. the neutral XX% X% is between XX% expected be XXXX neutral

as growth revenue in For below When and about we was COVID-related we costs. our chain during expect price backlog revenue in of we the for sales, normalize the X%, the constraints trends currency X% excluding XXXX. order the growth neutral elevated expect Due about Diagnostics improvement, Group, to Diagnostics estimate overall realized we X.X% XXXX, supply Group. inflationary to between X% which

For X.X%, XXXX, Science assume Group. the price mainly Life within realization X.X% between and we increase

Full gross first non-GAAP the is logistics to be as embedded is higher and cost to our be in non-GAAP full and the margin operating the the material rate year, year XXXX to our XX% non-GAAP margin projected between XX% improving inventory, approximately to towards XX.X%. year projected we of tax XX% normalize. expect estimate We end to costs be and of year cycle XX%. in we Full about half through

our projected support capacity be in as growth we $XXX as to is expansion strategy. implementation approximately well to as ERP million to complete CapEx plan Asia, multiyear our

EBITDA XX%. expected be about to is adjusted year margin full Finally,

And over remarks. few turn Norman a now, to Norman? the for call I’ll

Norman Schwartz

influenced to what pandemic I as it business X say returning I to years, of So, encouraging you, guess, normalized more think signs of environment. really after – a see thank Ilan, I a would that is

looking and is as putting forward. challenges going behind us. we I during years imagine, would made to us result we’ll I valuable the that might that to And, of think, a few be the really forward I you building continue the add everybody As last for improvements here muscle time, this guess,

targeted China even the would markets think of by be earlier, we’ll I market. kind a bit a about funding in environment it be world, our our to though solid and XXXX little that So the most appear challenged, strong a supported little Andy macro view bit a really mentioned around around as Russia, of continue

pleased with think, on think, certainly we development support to a we’re products we I are forward. And, and strategic fair pipeline to say it’s progress have overall, initiatives. I the our making going that our robust ambitions of

we’re to. continuing forward so evaluate So, also lot opportunities to and our organically, add a to portfolio to look to in

Ilan Daskal

Operator, and open take prepared concludes we’ll that line now questions. to our remarks the your

Operator

begin Instructions] Please with The proceed. line Donnelly will the the of Patrick We from session. Q&A [Operator comes question Citi. now first

Patrick Donnelly

growth Hey, pretty there, also lot thank as And obviously, Ilan taking maybe the pacing How you is ex well, Life guys, that drivers and just catch-up? to year, guidance, the the Can COVID. of between about on a much across some COVID healthy for goes – the the maybe XX first into Science just helpful. you be there? the Andy question. backlog of number maybe it XX that just would comps, talk

again, some think perspective of about way about the get the to into Just to that it. your play maybe piece growth drivers that right and,

Andrew Last

Andy Patrick. Yeah. the question. Thanks for here. Hi,

it just business XXXX X look the down at me we overall, as break areas. let So revenue between

were our we’ve remain coming benefit during I new strategic that XXXX. digital with and products And PCR chrom year, area. launched process more from also platform, some we’re growth drivers consistent the would PCR in revenue to overall, continued growth past So, got going during that of platform say the

we’re our a we our largely biopharma significant still as think, in underrepresented driver, on focus also very to growth is Science. look where Life I penetration,

we being the a of as Life in And world. Science see positive, broadly funding and backdrop, regions all

of continued And gains the quality continued our look I in We’ve demand there, particular, the general it’s business. pipeline. growth say continued share Life that’s of story of kind a had in Pac immunohematology a recovery China in growing XXXX. to on Really, and wins in as more so growth business. Asia some recent controls, got in and, Science we’ve would I half second clinical also

of be think, we the our And feature the half Backlog And, a year. reduction still the script will QX as was But we for probably a was will more in year it really of of I improve XXXX. larger us. bit got that the backlog now. enter through has in business have overall. kind Clinical mentioned challenge line the challenging of clear growth for first the sight

looking a So, pretty that much we’re I think wrap-up how XXXX. at that’s of

Patrick Donnelly

think very talk of a maybe point the year, shipping from the the probably the just in this like XQ, into helpful. to and how saw much of particularly impact, a terms seemed just then of the guess China, What clearly, way little And about in some both there XQ, of maybe it what your headwinds, and is? the chain, through, terms That’s Maybe you China. saw impact talk bit to you early delays, of lingers right expectation, bit can in the Okay. diagnostics I supply that piece, China little there the you in piece? then about

Andrew Last

and mentioned than of that ability we’ve business, before, side supply is as did Science the the much overcome the for the easier persist chain constraints in Clinical to Life Yeah, the QX basis both kind government chain supply that demand policy And China challenge well QX. of through then, us as change in reflects, with in off. as drop the some represented that

as So for us really expected quite China didn’t QX. in perform

our backlog into production, our really to QX and burned volume is focus go As platforms down in demand. improvement instrument growing on the the we on meet

when we us business, volume for And so, the we half now go. first that’s issue for component it’s believe the it us. on production ramping clinical more less is phenomena much as of And the a

Patrick Donnelly

just you continued guess, last the if about the maybe And piece, the here can nice more XXXX. talked about, you in then restructuring – EBITDA XXXX. key margin levers thinking one Day in Ilan, levers then, still you year, numbers towards comes this about the out have as And think to of sneak in Analyst our I targets And that laid about year. of I this Can we for path the Okay. on bigger to it’d path at we just work just way to this the that those than towards then, talk as the are moving the left XX% And year. similarly, XX% pieces that be But probably year. play some and moving that confidence XXXX, into number. again, number helpful pull, some

Ilan Daskal

Sure. Thank you, I appreciate Patrick. question. the

at So, experienced you that raw XXXX, materials, logistics and we and in challenges higher specifically constraints, we about chain costs. if think look of the the XXXX, elevated specifically cost supply around on in impact

Singapore, So believe the then other move internal as the in completed, in And restructuring about efficiencies we of you to second in half improvement gross the thinking of footprint. of part to the going terms and it’s Andy And earlier, continue in mentioned we the final think the throughout gross if that terms it. margin specifically of to of is of phases improve. XXXX, in think our margin, we when of initiatives you have additional that about that and terms manufacturing productivity that’s

XXXX of. that from towards you’re we comes transitory that extent some of about went also we’ll more the drivers challenges kind us in thinking that top-line laid your back achievement kind to will to change the the XXXX in the not And, of initiatives, these does it – all the obviously, aware terms So of in But what of confidence targets level through And we that’s the out somewhat gives XXXX that continue contribute model, that that and Investor or the XXXX. the growth Day. goals. into

Patrick Donnelly

Thank guys. appreciate Right. I you, it.

Operator

Suisse. Thank Dan next you. of question Leonard The Credit proceed. the comes with from Please line

Dan Leonard

sales My how taking the those single-cell the outlook? guidance, mentioned to question you you Hello, drivers? on first Continuum launches they half important instrument? XXXX How are for second these are important guess, Or second product questions. XXXX the are sales the thank more I XXXX the generation and

Andrew Last

They’re Yeah, a contributor XXXX. really XXXX thanks, there. in is revenue Dan. staging This ambitions our not material

material but introductions the market, no that to So contribution.

Dan Leonard

give possible update if can an you Singapore And, Understood. on the Andy, transition? manufacturing

Andrew Last

lines. all to plant up Singapore happy and the running so. do Yeah, across The product in is

We’re still consideration this would the coming have in initial our is we – pleased plant because of our very I but challenges key plants the time, up reduction to other that the French is open that at plant we’ve speed. that we And say wasn’t kept operating. them that with backorder have. point here

our open plants of through keeping the and plants the to so those the capacity finally half to And Singapore close first QX. end we’ll then, facilities. And continue grow we’re in

at point, we’ve just the moved had year. has would all past I diversions, of So kind small this in say well, some

Dan Leonard

would related, opportunity mentioned Understood. quarters normalize is final my question, sooner? Ilan, it might would be I this normalize so you long And think take X and it take any to Why inventory. to there

Ilan Daskal

we in all, we So, set than first of generally target the a speaking, to Dan, plan XXXX, have lower level inventory as ourselves. XXXX, just

all was procurement I to than that quarters. raw are any And for done instrument those, for components next protrudes] buildup. raw in of on since purpose, And these will do last see level for the some instruments longer write-offs material. any [ph] have material that elevated the the [of of wanted X of not risk Some we

of quarters that reason the was it that of take thinking of that’s will our the kind to terms of plan, part kind in So normalize. probably long-term X

As you And of kind availability, to in availability do have to… can of that imagine, became the maybe, And challenges audited back ease despite Andy, you fact of yet normalized a want it’s still not we kind some but there. component terms level.

Andrew Last

Yeah.

so inventory factor. plants down the effect on open through, some will that’s have X of to of sides a the clinical just on well anticipated burn for that kind from Just keeping this then world also X to X as carry-forward double quarters another than contributory longer

Dan Leonard

Got Thank you. it.

Andrew Last

Thank you, Dan.

Operator

comes Jefferies. Thank the line Please Couillard of from you. proceed. question Brandon The next with

Brandon Couillard

guys. Hi. Thanks. Good afternoon,

we on that out a sure headwinds, Just assume full zero. I outlook, to growth goes chart COVID year that the of question got take make the the kind

in core in You Analyst laid in think, of of of confidence I little talked that level year, growth about where expectation? of in in Can about the sort have of more for XX% your a LRP XX% been Day. may which the level conservative double-digits, to you that the portfolio, your the you terms just growth, you you ahead out and said talk

Andrew Last

for here, process the Brad, a you we portfolio quite there, I by performing, pretty fairly growth broke fully fully But, expectations. up region a But we’ve Andy or reach trends didn’t little consistently areas so carrier. Portfolio the mean, robust expectations, realized plans so think, year, – bottoms up quite a for our our growth by on it’s that before, global macro for bit initial sorry. the XXXX I us basis. highlighted we at of end seem diligent very building have growth didn’t

you’ve a coming bit through comp a So little taking we’re there too, a elevated bit that into from got XXXX. benefit little backorder some benefit of of

we forward. when areas products business within good of portfolio aspirations, the launched for new year, to XXXX which the the portions growth continue we’ve growth a feel trajectory we to from of expect going and grow, at look particular some got ones This got we’ve new product both in So contribution, we portfolio.

Brandon Couillard

kind and on know, the the in that could their and on of just looks in-market you changes the that And digital mix Then between in diagnostics share now? seeing instrument consumable terms of you’re system. the that versus maybe and what landscape Roche’s like maybe or it stands that then where today with mix, us research biopharma segments launched business, in stats any PCR the updated competitive market, I

Simon May

is Simon. this Yeah,

we about XXXX. say digital with growth overall, think business throughout saw pleased we the that trajectory the As pretty we’re I’ll PCR

dynamics, compound backlog. and that pleased down come we the momentum with we’ve good to that some We’re the product there’s We yeah, as into opportunity, the started sword. about expanding as with we emerging the see previously take order addressable but something it’s new talked in we’ve see we competition the feel It’s it we market got that And a and double-edged very XXXX. also introductions, burn seriously. that

always excited the the some weren’t and the performance. way market do terms the And initial we’re that. as a we’ve We have NuProbe. that with to with blend to going comments we of assay we to of mentioned, the seeing launch when able access can the And, of be QXXXX access secured earlier able in capabilities capabilities of with we’re platform best-in-class uptake believe we’re segments be in about when that to you that

also we’ve XXXX. of a think instruments consumables we we very feel continue momentum, as got and to the into mix head between good we and lot about So

And think we as of see And that’s viewpoint, performance XXXX. bullish good points felt XXXX, market corroborated in really about out the lot into data I well. coming how the in a how we we are particularly and our from just

Brandon Couillard

I’ve well, got Simon, Okay. you.

also materials for terms StarBright, for the Are couple Bioscience] those monetize more timeline commercialization other a portfolio had revenue announcement the have oncology of on library NuProbe part contributors whether the of Cytek that a then of that? kits. what’s there’s of cytometry And the On [ph] with to partnership the ddPCR, strategy broader any of the recently content another of you’ve in licensing content for [Element in XXXX, RNA through prep in this dyes, partnerships? you one

Simon May

you be got meaningful StarBright. we’re going to with Cytek Cytek partnerships a there we’ve best-in-class addition over serve material extension to to direct we’ve in already. being a revenue onwards. of franchise. mean, pushing us as wide got have open is PCR any probe XXXX already And I with lot that’s pretty oncology with content about think, generates dies digital on again, XXXX, XXXX. performing in time, in and XXXX. time a around mentioned, over development well And, a to to for certainly significant meaningful within of partnership lot not there I those portfolio, going I going in think think Similarly, the of from assay in agreement we’re new the wouldn’t the emphasis as but I It that

Brandon Couillard

revenue mentioned the one, million a line? Ilan, Last operating million did $XX onetime to in $X Okay. what’s fourth quarter. benefit the if that operating impact of you the And income

Ilan Daskal

it’s average of the Brandon, margin – So gross kind on benefits.

XX or the higher million, fourth It’s between million and mentioned. I the anything is not it’s it quarter lower. And average blended margin. for as So onetime $X gross for a

Brandon Couillard

Thank very much. you

Ilan Daskal

you, Thank Brandon.

Operator

proceed. Thank you. The with Research. from the Please comes of Nephron line Jack question next Meehan

Jack Meehan

Good more as based Norman, on of latest or just likely M&A if more equity deal? thoughts something transformative? do XXXX, part or afternoon. for willingness you think start either than less Ilan, for I now. with you. deals seeing for tuck-in you look to using what are balance you on and Thank a And wanted out And for just you’re sheet

Norman Schwartz

or if rising I opportunities kind rates, would by see out XXXX, for of down they that about whether so Yeah, we we’re if interest be see a transformational. there, other people encouraged We more what you more think think slowed certainly tuck-in little bit.

managed done smaller larger. we a would especially we’ll these do to additions technology, certainly, little mean, portfolio. of to kinds that’s what find, know, think something see number we a tuck-ins, I the to hope you of We’ve I these

looking top-line we’re I think, a bottom-line. something with now and for a

Ilan Daskal

the debt. mix And, it and Jack, terms between in with equity of

capacity. kind were and preference debt it, that Xx nice And opportunity. investment is be call gross maintain we nice leverage, can that stretching even size maximize so historically level. the grade provide it try to to And little discussing size above a target you bit maybe that of even our a us a we’ll of Our to try long if again around can – opportunity

Jack Meehan

then just you about potential to And XXXX. bit a little backlog Right. ask more flush in wanted for

would you capture million up elevated heard of million and I you you than $XX $XX backlog, smaller the about end year that, think year-over-year. balance look I inventory think $XXX expected, say just can you of I about So at have when I talked million at

that sight your Sciences? I just into and is curious Life color line of mostly it So like any on, was

Ilan Daskal

Yes.

the to and reason procure also comment purpose normalize capacity. the we probably related order kind did is in one side, of maybe order normalization take longer-term Jeff, since about certain the for components from explains to X XXXX. fact my elevated quarters kind X on that And So, that level, or higher of inventory it backlog, that and of and that maybe elevated us quarters the will the capturing during kind backlog

Jack Meehan

of for accounting Ilan off and XXXX. in the And one new maybe you so margin also XX.X%, then, final target Andy. The for

years bps expansion is for a the with but out anything that’s you’ve that. below why a of think some maybe the of there would and I trend I multiple levels? XX little in kind better you notable year-over-year. XXX dynamics past, If done the supply chain, year, than COVID I know, historical call look over even there’s lines over

Ilan Daskal

question, good from challenges, I the in some obviously, XXXX, of mean, a we’ll XXXX. It’s continue part of Jack.

operating that is a obviously, of fall that to a So still higher margin, headwind, cycle. that when through gross materials you through an the about to impact and we inventory flush on it’s the have has And margin. the cost think

kind XXXX transitory that’s reason still because there. that’s believe be and that no main longer model, to item the think that And have basis of exactly terms time, we that that XXXX. confirming it’s those through of that’s do work I we the the thinking kind of the during target for our in we again by issues believe will that still

Jack Meehan

good. Sounds you. Thank

Ilan Daskal

Thank you, Jack.

Operator

additional Thank time. you. now are questions closing the for [Operator There hand Instructions] to I it back at no this team management will remarks.

Edward Chung

joining Thank today’s call. you for

We your forward we in of and will see interest, be always, you some as look hope to early appreciate at the to soon. Citi we And connecting and March Conference there.

Operator

conference you. today’s Thank call. That concludes

You line. may now disconnect your

Bio-Rad Laboratories (BIO) 16 Feb 232022 Q4 Earnings call transcript