Earnings call transcript Q2 2023

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Operator

Good afternoon, ladies and gentlemen and welcome to the Bio-Rad Second Quarter 2023 Earnings Results Conference Call. [Operator Instructions] This call is being recorded on Thursday, August 3, 2023. I would now like to turn the conference over to Edward Chung, Head of Investor Relations. Please go ahead.

Edward Chung

Good afternoon, everyone and thank you for joining us. the on XXXX Bio-Rad. key review provide results will update an business we second financial quarter and Today, trends for me Simon Executive Dara the today Executive call Executive Group; Vice Financial on and Schwartz, Chief Last, of With Chief Operating Clinical the and our Science Officer; Officer; are Andy of Officer; President President Diagnostics Wright, Vice Norman Daskal, President President Group. and May, Chief Ilan the Life

everyone I and assumptions review, These will would financial our that begin that caution about plans we based and making to goals, performance we events uncertainties. future expectations, are statements forward-looking on Before of statements are matters. be to like subject and future expectations and management’s other our risks

materially and may plans, these results expectations. actual goals Our differ from

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

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

call Ilan our Daskal, Officer. to turn over that, I will the now With Chief Financial

Ilan Daskal

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

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

Andy Last

everybody. afternoon, Good Ilan. you, Thank

segment of than demand year. from our result to clinical more Life business. business further net was be products, for the core contrasted of a the We year experienced Science the So first our continuation a proved overall expected. BioPharma strong in the of demand of growth our softening by of modest diagnostic The ongoing of second trends the quarter quarter

in progress made we front, operational order meaningful backlog the On reduction.

media, experienced extending particularly In other from soft we a lines. in larger emerging plus BioPharma product we but of companies, biotech also further a decline from demand our experienced from chromatography BioPharma. to headwinds continuation resulted into sales customers, QX, process our for also This

this a was year, tighter is customers a delivery existing remainder orders extension While the softness our of across of levels BioPharma media The and some as the forecasted a their QX already beyond indicated for reducing environment in bioprocessing in significant of for inventory process chromatography revealed XXXX. result funding of QX.

the downturn to continued XXXX. Life we QXXXX PCR in from in previously in despite demand we BioPharma we the our and particular, Overall, communicated. than impact our System. strong anticipate for the portfolio We consistent new demand very and pleased strong academia demand markets. not regions the saw negative We for positive remain are growth products with macro is contrast, In from BioPharma In ongoing but do double-digit process Droplet anticipate experienced a Science across the all academic chromatography recovery for now Digital ddPCR, business broad-based Science larger transient, view softness do Life on in trends.

we quarter, in held excellent the the potential of growth reinforcing Digital which event, PCR product and our attendance During received engagement our this Droplet long-term area. world platform

of now the recovery. the broadly continued demand and that know half backdrop weak, also second be against China a expected in We from economic question slow segment Science is the to Life recovery

downturn, despite the cross we intellectual BioPharma property. and quarter, also our agreement digital the QIAGEN Science royalty During completed business to grew Life digit. Overall, core licensing mid-single related with PCR a

do for being foresee not half our a reduction During Science the quarter, constraint supply major year. of we backlog achieved second and Life the the product targets

in across solid continue growth immunohematology China, Asia demand franchise to the quality particular, China and solid performance our Diagnostics business, continued in in and pleased led in although recovery our saw to macro We businesses. see environment. growth we diabetes our strong Clinical were for monitor by We Pacific, controls

During includes potential capacity. enhancing software, the system, functionality increased cyberattacks. through our year-end backlog the the the have supply for sight with portfolio. transfusion increased security grew of medicine by update product Diagnostics to from next the on quarter, new quarter, line Singapore Overall reducing and updated We of along continued IH-XXX to the facility instrument, This focus launched increases up. which our we platform our competitiveness the of improved business now as expanding ramp continue to

with pull-through. demand business growth In the closing, of increased the we with diagnostic encouraged Clinical of supporting our to placement Diagnostics future systems reagent continue be and

in continue The Diagnostics we reducing to Life orders. continued on governance not is solid we back Building published group progress progress negative addition, to accounts. which society in business multiple this the commitment to trend reflects our BioPharma and the our corporate focus for our our report, recently specifically the made stakeholders. In we however, priorities, and on Science made offsetting year, highlights the social performance, environmental, areas, have to and sustainability our we’ve XXXX

to at back and So like you I’d close pass point, this to Ilan.

Ilan Daskal

Andy. Great. Thank you,

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

million was mainly about year-over-year same period Core of decline quarter year. on which million increased revenue, COVID-related $XX the excludes approximately last $X.X second result The X.X% lower basis. of in significantly sales a currency-neutral the sales, versus revenue COVID-related

royalties as agreement per a PCR intellectual with to quarter. for incurred a this onetime obligations future. related digital revenue ongoing The cross-license agreement, fee well on revenue anticipate property. We our estimate expense associated receiving second We currently not about any $X.X onetime quarter this from foreseeable do end included $XXX,XXX arrangement R&D we royalties and of million a related the cross-license of to royalty $X both million as of $XXX,XXX, from licensing

Sales Group X.X% in a is decline of three to compared basis. Science QX a in Life basis million quarter of a second were and on X.X% we currency-neutral reported revenue year-over-year on $XXX.X the a geographic decline currency-neutral core On basis, XXXX of of in which million a the XXXX, experienced growth $XXX.X all regions.

the in COVID-related strong Science sales, primarily supported Digital Group by PCR and revenue Droplet growth was was currency-neutral products. year-over-year and growth core Life X.X% Excluding qPCR

capital As BioPharma Andy bioprocessing alluded larger results previously impacted by and to the inventory. who demand biotech were highlighted early-stage headwinds are as earlier, increased as our reducing within QX well from soft delaying investments companies, companies

we demand In in China weaker conditions. government accounts addition, to experienced macroeconomic from softening due

full decline decline, a of anticipate a versus posted revenue we mid- for now prior expectation growth. year our year-over-year the and Process chromatography double-digit mid-teens high to single-digit

the lower Science and sales. sales, basis, currency-neutral Science core in COVID-related excluding chromatography The X.X% revenue, currency-neutral sales basis process while underlying Science posted revenue currency-neutral and chromatography grew Group QX QX on Life and growth a experienced X.X% Life On COVID-related Excluding revenue Asia. of core decreased a the business in year-over-year Life Europe, decline on was versus process a geographic result of a Americas basis. a XXXX,

year-over-year of basis. Americas on Group X.X% diagnostic continues a Clinical excludes Group revenue a Sales systems, pre-pandemic which the as million revenue, from of in in X.X% demand currency-neutral as to growth the normalize Diagnostics QX X.X% on basis the core Growth Core or million to and within basis, blood sales COVID-related Clinical growth routine was primarily controls a $XXX.X currency-neutral testing nice Diagnostics our Diagnostics driven well testing and and second growth On compared currency-neutral strong a were on increased diabetes double-digit the levels. was to by largely Group posted Diagnostics a growth geographic in quality $XXX.X Europe. XXXX Asia Clinical basis, reported for and strong typing year-over-year in flat quarter of as in portfolio. the

gross second year-over-year as in The million QX as was inventory well prior related The XXXX of by logistics in a forecasted reported the Life XX.X% Amortization a as GAAP to to XXXX. to of basis margin Science unfavorable $X.X gross higher the well million mix reserves. mainly and cost XXXX. was acquisitions due was Group. in instrument was quarter as sold compares reagents, lower goods further versus gross of than revenue decline compared material on margin impacted product The cost higher-than-anticipated in percentage for year-over-year with XX.X% QX of $X.X sales recorded and of margin to

or or in from of X.X% expense of to expense $XX the and management. development sales operating million was XX.X% $XX.X softer XXXX. SG&A million income million QX the expenses of fall $XXX.X sales of or in $XXX.X of compared XX.X% expense in as XX.X% line or XXXX $X.X ago acquisitions sales QX of of margin sales recorded $X.X million $XX.X in through Research was related XXXX, compared million SG&A quarter were of for sales or XX.X% or in compared spend million quarter though. was million level for XXXX. of top versus able to XXXX. amortization We were a tight in and the result the gross year Total QX million SG&A to to of QX QX X.X% QX second of $XXX.X to maintain flat

the by equity ownership Bio-Rad’s shares, plan, negatively Sartorius value $X.XXX below which of the reported security Looking are in billion. of fair market results to operating substantially impact change related the AG holdings,

by tax primarily equity to XX.X% were other compared income and for increased by for driven the driven in The XXXX net period interest the from net The tax interest unrealized loss securities. During year, both the other XX.X% quarter, expense $X.X quarter in same rate compared investments. other million second resulted effective for large rate the XXXX. last was of of income of periods, million $X.X income to in

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

the to non-GAAP on results. Moving

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

QX million of in second SG&A, and on $XXX,XXX. the have expenses, we Europe an amortization XX.X% versus margin diagnostic In These XXXX Looking gross the XX.X% the margin of cost in results non-GAAP for from sold, of restructuring of XX.X% gross of versus amortization at vitro the purchased registration of of million, in in for million $X.X restructuring-related expense. of quarter of $X.X Non-GAAP XXXX. an products approved we a basis, and quarter, goods excluded $X.X XX.X% of intangibles moved non-GAAP of QX was $X exclusions XX.X% benefit in previously XXXX for second quarter excluded million SG&A fee in the million purchased to acquisition-related a second $X.X XXXX. of have of intangibles non-GAAP of

in restructuring cumulative R&D second $XXX,XXX some a QX as of margin on compares Non-GAAP of a non-GAAP was in operating of result basis, and costs. acquisition-related these we have The on the same which expenses quarterly moving XXXX of GAAP XX.X% non-GAAP a margin This non-GAAP of operating of in XXXX. adjustments is million on from the non-GAAP In basis. quarter XX.X% excluded XXXX. R&D, basis to X.X%, XX.X% a of $X.X in QX operating the margin to non-GAAP

to the to XXXX of or XXXX of same We a earnings tax earnings. have of for or with diluted receivable was the in in per and geographical the higher The $X and of are operating effective driven venture investments. compared And of share XXXX. income diluted about line, decrease second quarter excluded XXXX. associated $X.XX also per in by the loss earnings for $XXX,XXX rate below for $XX.X items Sartorius non-GAAP $X.XXX was of XX.X% rate $XXX.X mix second of equity holdings net value finally, was certain the securities million compared the non-GAAP in XXXX period XX% which loan QX million share quarter billion The

Moving on sheet. to balance the

average previous million. our the repurchase second the of authorized the at of of share During a million our share our a as $XXX.X Having we continue part total of to of of shares program, program quarter, price for XXX,XXX stock, purchased completed strategy. Board cost an to share repurchase allocation We approach up with plan stock. disciplined our has $XXX.X new $XXX capital

at Inventory decline first cash the XXXX. QX end investments was QX during short-term from compared billion investments as $X.XXX $XXX.X as The reached to million the the of $XXX.X short-term and prior in of a the the billion primarily due goods at result from of share was the end cash level $X.XXX million as in material well end quarter. Group, to Diagnostics The the repurchases continue by the higher inventory demand in quarter of Total and QX the we order. the elevated work inventory mainly debt Group, was softer to of quarter. as manage higher higher inventory Science driven and Life within process within raw finished at

million XX.X% EBITDA in and second quarter was for compares quarter cash tax XXXX. was operating The $XX.X increase This $XXX.X to payments. of QX were sales. generated million XXXX million. reflects expenditures $XXX.X in or second for or $XX.X For activities the $XX.X of was of of adjusted $XX.X quarter from was the mainly second the the The quarter net million, XXXX EBITDA sales. XXXX, for of adjusted of of timing XX.X% of QX amortization million, XXXX Net million depreciation second and capital which

Moving on guidance. non-GAAP to the

demand sales Life instrument within for the year, Group For continued of balance Diagnostics. software expect much and the Science the we

have up elevated ramped remains order orders Science Group. Group the back through Diagnostics for for we worked and for backlog QXXXX our While and the Life our production

through back We continue this orders during remainder to anticipate working these of the year.

remaining during of indicated our anticipate backlog the each elevated we QX order reduction two this of quarters for call, As in we year. $X our of million continue about to

to revising Given versus We follows. financial XXXX X.X% we as our outlook be outlook, now guide previously. growth revenue points market the current basis currency-neutral about approximately are XX XXXX in

in second me, XX related the about revenue demand basis driven by BioPharma guide in macro XXX to sales environment process from due points softness revenue Group X.X% to excluding demand Diagnostics continued fees. Of points XXX the China, the are currency-neutral excuse to softer reflecting X.X% by basis core and For XX cautious other points The view guidance. the our in COVID-related reduction prior shortfall basis more year, basis be the remaining basis points, in XX one-time XXX approximately weakness estimate attributed quarter we points and points we China. basis offset license in the chromatography somewhat BioPharma full XXX related in down – to to revenue basis and a and is China for points, around about versus growth,

half growth growth the versus represents year, half half of This X% the of XXXX, X.X% we the the over growth of second revenue year-over-year second first first in revenue expect of For X.X% core the XXXX. in about year-over-year half about XXXX. core

approximately for when to the for sales, growth be XXXX. expect half about second we Science excluding about about of projected X% year-over-year Life the revenue be be Group to X%. Group is and revenue For COVID growth Science half The Life now X%. X% the first core currency-neutral Science of Group, over growth, process year sales Life the XXXX. decline expected excluding is This sales COVID-related And the related represents year full chromatography to

of for XX.X% half X.X%. now the margin reflecting For overall now growth Diagnostics the growth the and X% be about is in we encouraged previously, for Full XX.X% to revenue Diagnostics of while projected of to updated with the the are versus revenue Group, we year be year Group demand, guiding to the shift about remain over second represents mix expectation volumes. core about product core first XX% half XXXX. gross our of non-GAAP This

guidance, operating the as second XX.X%. now For with to in we about expenses. operating approximately approach be full XX.X% anticipate we XX% the our our of now gross be to year, year disciplined margin half prior project versus about non-GAAP margin continue with We

expected we in For margin about the XX.X% XX% prior guidance. to guide our versus margin EBITDA And second XX%. about to year about XX% half adjusted of our expect prior full be be of versus the year, operating is

guide our of adjusted be to year, approximately the For margin versus EBITDA XX%. prior we XX% the half of expect second

questions. dynamics, of Over previously take better targets. we impact, now expect several we to our line remarks, visibility the around if market your its prepared of gain softness and to next months, the specifically BioPharma the communicated the longevity the concludes will our This in XXXX and open on any,

Operator

Thank comes Donnelly you. Patrick, go please ahead. Citi. [Operator from Instructions] first And question Patrick from your

Patrick Donnelly

guess, questions. for process seeing? on out, guys. that pushed you’re about, softness you Hi, little soft to want the purchasing the Maybe I just just Thank BioPharma just to is appears you as getting budgets kind Can I talk the the piece. back taking Is start on Maybe you’re color And a any the what not to just more confirm assuming then, just the improvement in you’re side. it half. of seeing. that. give chrome

So just a yes, the maybe on bit side. color process chrome more

Simon May

Yes. speaking. Hi, this is Patrick, Simon

shifts general we’re are of that’s in out. through seeing That’s already secured, purchasing year, we’re a I some the seeing half patterns. think were here. main and the the into second demand There the pushed year softness which half some second that aspect, getting spilling the of orders in in we’ve

We’re time. improvement. said from not call, reflected optimistic some earlier, really those seeing to remain we’ve in of signals to that going see transient, in that we But, the our detecting some is pickup at side, opportunity and But we’re early potential for we’re this and too stage it’s XXXX. hopefully pretty this as at

Patrick Donnelly

just because know in Science expectations there maybe XH? in cut, Life like the little Is part Can And Okay. both on it seeing alone there. maybe it seeing That’s I it’s sounds what the like side. on I in the some cautiousness the kind look certainly I about, a some is of side, forward more you’re macro, is over now? maybe back you to and Life just are side what then a headwinds China hit then, just Diagnostics Science Diagnostics. then And you’re guess, not of you the hitting caution economic talk the the half. going mean both helpful. China, the seeing

Andy Last

here. Patrick, Andy Yes.

in of business. economic relatively I we of half, of and Science the which the lot the about that story cautious are and segment So macro Diagnostics second the point piece first right Life a true that’s both for fairly Diagnostics is BioPharma given include softness good situation of the in I in the view certainly Science, Life but consistent our and China, from think half us side our for for is component think now. HX,

Patrick Donnelly

take That’s fair. line you just maybe the margins like by Okay. What costs. bottom you little some sounds maybe some us the impacted a sure bit, inventory bit and gross in just Thank of are projectable talk then on on next you And about the little should actions. color getting side. you. margin year it to you is just do terms guys doing the material what how bit – could think I’m last a are and of guys one, insulate base Can cost a give we Maybe just that the about case margins? on how into

Ilan Daskal

is Patrick. Ilan. Thank Yes. you, This

there aspects first to So are a the out on margin. call few

transitory. Some aspects are

Some environment inflationary are related the overall. to

and example, year. definitely be other is cost, should there For in still thinking more as the our terms and product material more the elevated it’s which headwind And last XXXX. of mix the with more Science higher are well into Group of The kind kind elevated overall group a in of of mix our etcetera. between reserve, Diagnostics than of terms instruments, as was Diagnostics as a within benefit the one-time Life

the operating disciplined we expenses. approach very, continue other with the On very hand, overall terms in a of

the to see it’s continue bag the of will you to environment smaller inflationary the shape time impact of approach. through will kind see that have gross impact kind expected to than and some the again, more mixed said, So this income are – to as – we that to be I can indeed on of operating continue the how a But some impact to will is the fall up. margin, wait transitory, around, much

Patrick Donnelly

a Thanks lot. Understood.

Ilan Daskal

Sure.

Operator

ahead. Brandon Couillard Jefferies. from Your go please next from comes Brandon, question

Brandon Couillard

is demand, that look to Simon, lot Thanks. how see how you Good if or ‘XX, And are at chart budgets of your all or us at view? pretty outlook in just is prior your ddPCR afternoon. that to in it Could do BioPharma you expect any given weakness pie compares you, the group A you only for the that mix. total give XX% of there I BioPharma differentiated of, for it your those instruments consistent over a and question is? to do spilling is for

Simon May

this Brandon, is Simon. Yes,

BioPharma that got and business, obviously I we’ve process think think in chunk provided I a we’ve there. already our commentary chromatography

XXXX advanced over digital which QXXXX second we definitely see any more call the that had BioPharma. and will different with That’s certainly the emerging very growth quarter a seeing what We’ve there. our responding concerned, the got offsetting softness with Definitely introduction to We what and But and and capabilities kind outside soon tends strong are of way but to PCR. think digital spills is XXXX that I we footprint PCR customers presence signs of funding quarter, is robust emerging recovery. seeing be process biotechs. the multiplexing very to it’s in impact of again, that our kind smaller of notwithstanding double-digit related chrome, with it are brings. are VCP that too the in a a impact, into business. positively strong we of in And BioPharma to

Brandon Couillard

Okay. in that’s volumes. more the quarter color you and the should share of margins, the tougher can on kind mean and color fourth higher in the phasing comp I obviously you us know XQ? with XQ revenue of and in peak margins Ilan, got I XQ how I the terms quarter. year any a And XQ? of margin of about You think share the terms guess, between then, in just we phase growth Any the for can given

Ilan Daskal

but definitely, as quarter, there third usual stronger Brandon, seasonality is stronger quarter us. than even quarter know, and you the fourth we for generally, be stronger, the the quarter mean I the to as think about fourth fourth tends third Generally, be to quarter quarter. Sure. a

more again the the the through. from benefiting fourth margin, of terms fall quarter gross In it’s

difference, the a since slight So, but did second it’s XX.X% a in half. it’s huge about guide not for benefit, we for

earlier, approach we I mentioned So with expenses. the terms disciplined comes – very of to in expenses, and operating a continue, it the as will when

a very to lower dollar on of it percent basis, expect basis on sales, approach. a but higher, it’s very, We slightly disciplined potentially a be

Brandon Couillard

surprised then understand to terms I and Just expect us I come level peak they when help that in to to…? just mean this we should is out this from to like to just mean and you XQ, continue that’s climb And Okay. in am degree. of I levels, expect here? down inventory peak sequentially the them supposed

Andy Last

then, I going here. Brandon, diagnostics Andy mean inventory from are of material Singapore. top this of the not lifeline expected the on lead product. think to on, of purchase been clearly got near as up And – that anywhere of movement finished time level where that. we with with am result was sorry, to Yes, is required France raw we which that’s of close through then, that the I kind I this to we And magnitude, downturn, the reported this before, catch a is manufacture the

inventory be point I we normalization move we time, ahead will are looking So, this of think of towards this. that At largely in as forward. we

Brandon Couillard

Thanks. Okay.

Norman Schwartz

Thank you, Brandon.

Operator

Tim from Wells Your please Tim, comes from next question Fargo. Daley go ahead.

Tim Daley

very Thanks much.

that I BioPharma said at So, then you transient, also but recovering said until least from call today’s that the headwinds, describing one think XXXX. not

demand around descriptions or rather seemed be of So, to chromatography destruction timing process the lot a cut loss. than

here, or thinking given lower then in expected growth as levels? progress base additional normal just Difficulty] Just curious of? targets maybe guess the kind And I ‘XX grow sales, levels then above chromatography and comments perhaps off of on the about about, we forward [Technical the contribution

Ilan Daskal

– and Ilan. first can is generally as a all, We generally a we it then Andy pent-up are start will of orders. permanent ‘XX. these this necessarily maybe and of of kind demand yet like Simon of chime think and in. XXXX. expecting And see in more chromatography speaking, not for about not We it push-outs are I push-outs. guiding Tim, process Yes, But in kind transitory

not process be it’s if had... that we a to Andy chromatography expect know, due don’t So, pent-up demand. elevated to XXXX, I

Andy Last

in a and Well, this think expectations an this is think – change that we orders pushed and of is our or our there funnel, This – been share question really the in element over are isn’t the the out. about market shape I have long-term. I expecting that there is

timing. in So, transitory is shift a that regards, this

in. the I unclear word position What are you I think timing so am used and taking we at a on, when resolved. look that is now we is on the That’s is it. way right fully

Tim Daley

And just But underlying China a touched tailwind know it. what you of growth then I of we Got this on understand China bit, a China was know took diagnostics the diagnostics? that nice quarter. how out reopening second tailwinds one, but guide. Alright. have I now help that year of for you the on are could the expectations us within And much was full growth? versus maybe some

Ilan Daskal

as necessarily it it it to monitor far for that macro with second of will I the do of and kind to more more to reopening specifically. a more continue think being growth, overall, have be the I really change that that that the nice has are we cautious we the achieve current – necessarily, monitor remainder drastically. – is it’s not year. so year-over-year for with China mean to environment of expected the leg environment which them I will again, don’t the to continue hear, us. we we is really X.X% for a But growth everything well diagnostics is half performed know

Tim Daley

you. Alright. Thank Perfect.

Ilan Daskal

Thank you, Tim.

Operator

Your ahead. Jack, Jack from please from Research. go Meehan Nephron next question comes

Jack Meehan

I Andy, maybe wondering afternoon. transition just to for Singapore. Good the as you. was well, or manufacturing the new in Thank Ilan

talk contribute your about that Just the around year? to that in of you the can during did operationally, might half how second thinking quarter? margins how And the go

Andy Last

Yes.

year. have here in feel full the backlog, quarters. we right now. it’s we the sorry, as We good – backlog. well. in that we are We past in now did focused ramping So, make in quarter the I will before, And the the answer going achieving inventory burn the to I both communicated think on shutdowns It’s went diagnostics down now our take on the Singapore. And about first coming But a It further well. half, foreclose France, XXX% indicated going some Jack. of production – progress plants

now. So, we after I are track the difficulties, on believe early

So, as to want it you do that? to on comment gross margin, relates

Ilan Daskal

Sure.

us. lifting, Jack, So Andy behind the mentioned, heavy as obviously, is

We continue has to ramp. it I achieved. mean a been of lot

And going so, it are two now. to And where a That’s sites benefit benefit. more up. slightly we right we kind we will of are of realize additional year, probably be fully will European next it ramped once have The continue closed. be kind – into also will

Jack Meehan

Great.

August, curious Okay. And been moment. like issues I hearing of has BioPharma here are of some what difficult the of XXXX. think half some just through might in these then from kind customers? in discussed lot are issues of the a is was seeing What of early a you you about there extending first at be but you question the answer to the this likelihood

Simon May

This is Simon.

is simple think to soon I too the say. answer it’s

think this we or kind covered already. two have times times I three of

the quite that’s half phase. not There trickle are is comp in the to in in some early. of recovery think call the simply, through seeing time to to too commentary some very We And our we around soon to shifts the but material signs funding going just that funnels for second of environment, it’s year. take It’s XXXX.

Jack Meehan

Sartorius was in of kind value new Bio-Rad is question repurchase nice endorsement of thinking what Norman, shares authorization, Last I That’s the curious you your that’s for the latest now. on a maybe see the fair. stake.

would commitment a to of given, kind piece more Bio-Rad your shares? of curious, is of own monetizing stock Talk to buy Thanks. where Just that. am this the just I consider trading, about ever you

Norman Schwartz

valuation to low balance continue issue, And That Obviously, of that at an be we moment. certainly Sartorius have relative in strategic on near-term. we with as Well, our our shouldn’t certainly, to view the us. peers. respect a the for see sheet repurchase, is to certainly continue to got we plenty cash

we from kind obviously, between, when to balance yes, the of kind so repurchase of place and that uses we forward, give authorization have cash, But opportunistically of different time-to-time. And kind and looking priorities. as buyback nice go at new different to of us in opportunity it’s

Jack Meehan

you. Thank Okay.

Norman Schwartz

Thank you, Jack.

Operator

RBC McNamara Conor, go Your question please comes Capital. next Conor from from ahead.

Conor McNamara

questions for taking Hi. Good Thanks afternoon. guys. my

manufacturing issues pent-up on is any there you can more Is along saw? ddPCR, strong there? and the competitive side? diagnostics Just there you pressure more talk double-digit ddPCRs the in market on the growth any And the about demand

Andy Last

here. Andy Conor, Thanks

challenges pleased performance is quarter. well So in forward. the in out, cleared all the instrument production quarter us. in segment. BioPharma No constraints very the yes, very our we softness the We new despite the The moving for of going challenges were with

franchise quite the that have few meaningfully that in years. over last segment, We grown

been Competitively, our our last feel that’s of positive strategy for has a in really point think very this time. and the of thinking the baked changed, it. And is into forward-looking at very not has anything I growing middle don’t point the certainly So within weakness all potential there successful. in BioPharma We quarter. about

Conor McNamara

know markets customers follow-up, Thanks don’t I are for if that. upgrading new And available? customers? PCR that just new how of a Great. look either of into going much or you those that sales have if as success you current at the product, versus data

Simon May

This to is can Simon. talk I that.

I a spread. think it’s a of bit

a uptake pleasantly BioPharma, a that of well. development, where upgrading gives good capability to is oncology really who systems. from productivity are the the actually advantage. we customers We in multiplexing that again, where very are we we surprised seeing in research the clinical need are where would area in were and that third customers say serves seeing And sensitive been system the uptake those that significant then, the number have seeing existing I multiplexing

kind it’s of So, broad-based.

Conor McNamara

can you that far as on with how there XX-XX these pull-through final – Got you should it. kind consumable tail still Are Thanks. us on ddPCR, consumables remind placements? versus on the equipment And the as what’s that when at And consumables ddPCR? of accelerate just side? the

Simon May

still we to still to are seeing we play weight that out. there. approximate increasingly think expect And time, are I In that towards terms, over think trend consumables. And very I we

Conor McNamara

there side, you Is that question going from anything for for year, the rest that. Thank cadence abnormal into rate the me and on OpEx is were next last And operating that’s sequentially run on you QX, QX? expenses. the in about think year? How good of should going this or is we Great. into then down total for a

Ilan Daskal

Yes. This is Ilan.

slightly overall. a basis, a expenses disciplined to to expect in be On half, slightly of sales, lower percent than the try we as terms we dollar that. to very the So, least, at be maybe higher, of second continue but

Conor McNamara

Thanks guys. it. Appreciate Got it.

Ilan Daskal

you. Thank

Operator

Brandon Jefferies. question Brandon, follow-up please Couillard a from go ahead. have We from

Brandon Couillard

Sorry.

up second half down to or to Just first in saying the OpEx you the clarify, are compared half?

Ilan Daskal

going not On a basis, So, slightly a potentially percent higher, of dollar lower. it’s but to slightly meaningfully be as sales, higher.

Brandon Couillard

question makes follow-up deal that curious PCR them? digital the QIAGEN I Why you just What deal. for A guess with sense. That do am I of Okay. Simon, cross licensing get out strike it?

Simon May

confidential. the really Don’t of deal in Brandon, answer that terms

to say here. I we already are what it the we said about script have going in think

confidentiality we about have I think because pretty and happy the terms, are we leave to it. around it the of that’s got provisions have we with where

Brandon Couillard

I Thank will you. leave it there.

Operator

Chung further are questions remarks. time. Edward There no for closing it turn will Okay. this at back to now I

Edward Chung

joining for call our you Thank today.

at Conference Boston, We the participating next in month. Fargo Healthcare will Wells be

appreciate and soon. always, to As forward your we connecting we look interest, Thanks.

Operator

your you your call ask that Ladies this participating conference thank We and please lines. for you gentlemen, concludes today. and disconnect for

Bio-Rad Laboratories (BIO) 3 Aug 232023 Q2 Earnings call transcript