BIO - Earnings call 3 2023 | Bio-Rad Laboratories, Inc.

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Bio-Rad Third Quarter 2023 Financial Results Conference Call and Webcast. [Operator Instructions]. And please be advised that today's call is being recorded on Thursday, October 26, 2023. to conference like Chung. to now would turn over the Edward I of Relations. Head Investor ahead. Please go

Yong Chung

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

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

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

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

share in earnings Officer, to that, update release. With Operating our contained Bio-Rad's an remarks that accepted and I to turn results and net GAAP our Last, references operations. Andy Finally, over diluted Investors will should financial principles. are on comparable accounting of are non-GAAP Executive including non-GAAP the provide now to earnings reconciliations financials, today our not the include defined call measures generally per which Vice measures financial to global Chief income under these will review President

Andrew Last

and fell joining anticipate third a market sales Clinical still in strong the you than everybody, quarter fourth Group mainly impacted to and with Ed, segment Clinical Sciences The within softer economic drive Thanks, the afternoon China quarter. lower year and expectations. Well, constraints in the growth in the conditions. were continued Diagnostics by Life Many our challenges China Diagnostic biopharma for ongoing weaker us. the of the performance We thank good forecasted below we quarter. to year-over-year

maintain this flat in sales, segment for year core constrained by a were environment driven Life our were year-end Germany, period. on on -- biopharma demand smaller the front, for QX which experienced and from process track showed constraints for for performance economic but by biopharma resins funding and environment We in China QX, spending stronger was Science products. our supply declines sales. Backlog and which tight focus Americas, tight the cost research business, clinical in to in In supply expectations. to roughly modest academic down sales ago projects experienced ddPCR offset in and we further The from flat, strong reduced continued remains impacted Academic soft chromatography customers and Sciences the our continue constraints. from successfully APAC biotech government EMEA sales both reflecting we meet our on European customers roughly chain policy Life other control in the countries.

a biopharma ddPCR the quarter the the remain of expected spending, While than sales within for platform. growth long-term as softer were outlook we positive on very result

were involving by noteworthy we ddPCR. encouraged quarter, several the During announcements

similar results Genoscopy the tests Kong. prevent reporting trial, CRC published by platform clinical for has for cancer And announced amongst the front, platform. Hong QXDx-ddPCR newborns the all have testing sensitivity of for testing in in QXX detecting they pivotal here powered our their On our been selected U.S., colorectal SMA highest the clinical

as technology. platform. based contributors strong the impact and see Additionally, the from and reinforcement these We on our growth in Verily major future the of contract won wastewater U.S., of national to a a versatility CDC testing QXXXX multiyear the

Life unfortunately, has business Sciences a half which our As highlighted the the now impacted QX clinical constraints year this have economic earlier, first China business. of was the been also diagnostics challenging for And in positive for a our region. in continued us

now the of signs recovery. XXXX to before and to for for year-end We have we expect constrained China look expectations further our see

mixed Our clinical continued Europe in quarter. We growth with were expected, softness business and was saw overall offset demand as In U.S. particular, by we the had pleased the a in which China. immunohematology partially the being of diabetes market view this the long-term momentum the in for sustainable and as and challenges our platforms as strategy providing and our growth. year, market very quarter. Despite we our solid franchises opportunities framework in

of component and of completion a improving And single operational our continue now execution. of focus completed driving instance have improvement. We global with SAP on to major a

moderated the to continued biotech our expect somewhat to company to in turndown this the although and the and review market the Life continue growth business, overall results. financial trade the through small clinical in of see to the Russia sequentially ongoing constraints ongoing Looking and Russia. Thank to biopharma of at in end although growth quarter and as momentum as the And diagnostics on the impact year, you. I the pass will positive we now the sales China expect final constraints Ilan we remain in to We in by do Sciences well China restrictions point, greater year. business you improved

Ilan Daskal

Andy. Thank you,

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

The was products. of impacting year-over-year decline bioprocessing Science Life weakness quarter revenue the and tools end markets, sales result primarily biopharma of our ongoing third in the the

the China decreased reported QX quarter basis. environment Science were sales currency-neutral of million experienced by the QX on sales Americas. $XXX.X a made macroeconomic of on core in well million were basis, as basis Life to versus which local decline the excludes in a in of in QX revenue, XXXX currency-neutral we a partially a XX.X% in is which China COVID-related compared On and demand about initiatives. COVID-related a revenue Core weaker $XXX.X offset year-over-year million result last third decreased on $XX.X sales increased as a in basis. X.X% a $XXX,XXX decline the Asia year. of currency-neutral as addition, of XXXX and the geographic in In Europe, Sales XX.X% Group in

Excluding chromatography, COVID-related flat revenue. Group the ddPCR Life and sales, Science lower year-over-year about was revenue blotting core and of by currency-neutral process driven products year-over-year primarily XX.X% qPCR, decreased sales western

orbit Excluding basis, offset in Science the versus Life XX.X% decline prior revenue partially process and a growth on compared XXXX. as quarter sales, Science diabetes the The of sales a modest The due year-over-year XX.X% the a the currency-neutral to revenue, by GAAP XXXX. a manufacturing and a basis currency-neutral Asia costs. mix, Life sales, decreased core group decreased was quality geographic currency-neutral increased Group costs QX Science decreased primarily core chromatography Diagnostics XX.X% the business year-over-year margin promotography related by On of XXXX partially on and in to excluding reserves logistics Amortization were related on basis. process in products Europe, typing inventory XX.X% growth XXXX. basis. in basis revenue of Americas. Americas of a product QX in $XXX.X in the Life sold compares Group basis, to controls third volumes, Sales underlying and to $X.X in offset and offset geographic million basis. The a material X.X% reported Diagnostics in QX million unfavorable decline of $XXX.X excludes Diagnostics XXXX Europe, was a cost Clinical growth as on QX our growth improved or acquisitions third a of increased million Growth Diagnostics the to currency-neutral gross goods from reported Asia. in on Core by posted compared million the lower and X% which of on gross was Clinical was was basis higher mainly of by of revenue, the sales driven and $X.X year-over-year quarter Group margin partially portfolio. On year-over-year currency-neutral well blood Clinical X.X% COVID-related and for recorded

the lower third XXXX. QX as quarter a versus XXXX contingent XX.X% sales quarter expenses. QX of consideration $XXX.X SG&A $X.X consideration million to as X.X% million I well in QX benefit QX quarter million third cost-cutting $XX.X from earlier Research of R&D QX well employee-related was was $X.X last benefit contingent in sales QX expenses. expenses The for compared in amortization Total or of quarter included as Third to related million year's of million $X.X as $XX.X expense of or in project or benefited recorded $XX.X lower earlier, million $XX.X employee-related sales $XX.X the and quarter SG&A the compared The in compared benefit, or XX.X% million I sales sales million contingent or operating was of included of in expense in $XX.X as expenses of acquisitions of operating in of in or recorded income million $XXX.X that lower initiatives XXXX. XX% to to and significantly from XXXX. well lower mentioned expenses million million XX.X% consideration diagnostics. SG&A the X.X% acquisition XXXX. curiosity mentioned of development of in for were as as our

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

income XX.X% tax the in XXXX. equity XXXX $X.XX other in net $XXX.X quarter year. tax increased to rate $XXX.X equity by effective and by tax million was in affected of change income effective other primarily of Reported last or largely net quarter unrealized for unrealized of by from rate compared This in was was related per Sartorius investments. in securities. $X.XX quarter and driven income primarily During of the of last for to the reported $X.X last to per in share The the year, holdings. the compared resulted a valuation expense XXXX an loss third quarter, is changes million diluted share of an XX.X% affected loss year from income QX primarily diluted was million compared million to gain $XX earnings interest of rate The loss or other third in interest securities the QX net this of QX

on Moving the results. non-GAAP to

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

This small quarter of of gross the Looking margin of $X.X from expense. on for at QX earlier of XXXX and quarter. margin million, of diagnostic for consideration XX.X% the million, an QX XX.X% XX.X% restructuring-related of non-GAAP a cumulative a adjustments third the million goods on to a in of approved on products amortization acquisition QX SG&A In results XXXX. excluded intangibles fee XXXX In moving for third R&D, of have QX quarter a excluded from we non-GAAP intangibles and cost These Non-GAAP margin the SG&A, of operating sum XXXX. million XX.X% non-GAAP margin contingent in XX.X% restructuring non-GAAP quarter consideration in sold, result $X.X third basis, in R&D benefit. related non-GAAP third versus The XXXX in the on of gross was XXXX. amortization purchased of and million earlier expenses. Non-GAAP versus we to previously a we $X.X $XX.X purchased registration of in a non-GAAP of have basis operating the in and $X.X in In benefit the was mentioned moved GAAP have XX.X% of Europe of the to quarterly excluded operating X.X% contingent in $X.X exclusions an XX% basis. small the XXXX. margin of to million vitro basis, compares acquisition a XX.X% benefit restructuring non-GAAP of to related a of of versus mentioned these X.X% non-GAAP

The release certain of We loan million, non-GAAP of Sartorius a and gain venture compensation-related rate of receivable in items third XXXX. an with by are mix for million and XX.X% the tax the $XX.X investments. The operating in rate increase of XXXX of an driven the deductions. have holdings and about from higher escrow also below XX.X% acquisition securities effective for the geographical the associated $X.X in earnings was value quarter equity same was compared excluded reduced the line, which XXXX loss to $XXX,XXX for period

earnings tax per to of share XXXX. non-GAAP And compared earnings We and diluted continue between or to net be finally, estimate QX year $X.XX full XX% non-GAAP the share in income million $XX.X rate XXXX $XX.X the for per of million third to of was or XX%. diluted quarter $X.XX

sheet. Moving on to the balance

average for our our During share shares capital cash investments quarter. QX second end share a and end the of of at is $X.XXX with in cost price our in million, prior $XX.X plan nearly our $XXX.XX $X.XXX short-term still of to $XXX and stock an program. We third primarily of buybacks $XXX.X short-term total billion slightly investments quarter Board continue which was to compared QX the of end have at purchased the from million. increase billion allocation of million at and to authorized in of than opportunistic in as XX,XXX approach quarter, remaining Total we changes the cash part strategy. at the repurchase capital. Inventory was was inventory the lower XXXX. The due the working of QX to

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

guidance. Moving to on non-GAAP the

a Given about as in about growth we revising currency-neutral the are XX versus previously. our revenue current outlook of X.X% We XXXX basis decline now market expect financial XXXX points year-over-year follows. a environment,

XXX and in The softness is points reduction quarter excluding reduce the points XXX to XX remaining basis For the of points BioPharma Of X guide BioPharma basis process as growth, estimate weakness sales and attributed to currency other related is core to XXX lower about COVID-related down, be China. continued well which XXX are basis as year, XX versus points we basis remaining third XXX approximately year-over-year revenue X.X% to shortfall in neutral points related between XX basis prior related to to states. full Diagnostics revenue the clinical basis and to chromatography points demand guidance. revenue our in

XX% X% For projected Life currency-neutral the for sales, Life Science we X%. Group, related Group decline and is a to decline expect be the revenue revenue COVID excluding Science about between and when XXXX currency-neutral

Science decline chromatography and COVID Excluding process revenue X% Group to and related X%. Life sales, is between expected

versus encouraged prior in to non-GAAP For now is and the continue the We in guidance. And margin call our Norman? mix prior about to about year updated manage volume. the full previously, few with guiding operating We versus gross margin over remain previously. Full is Diagnostics group, growth approximately be are our discretionary year to demand And to to while XX% now overall reflecting XX.X% year we of a for full turn and now EBITDA revenue our expected remarks. product we we expectation versus about margin in XX% XX.X% be core XX.X%. X.X% project be expenses. shift as about projected about now to XX% non-GAAP X.X% guidance. Norman be and XX.X% carefully between adjusted versus I'll

Norman Schwartz

you, Thank Ilan.

I guess I last to just his really to here the a wanted to minute recognize contributions take over Ilan several So years. and

enhance financial improve a as of working company's with has the been of the as community. team. our transformation, the well kind profile planning part to of As processes reporting very financial valued Ilan member external and to

much contributions I continuing for think do us which we our his guidance all very appreciate position well and transformation.

successor. well can team interim. a have initiated very manage the have we in we who in for the imagine, might strong, a a And search you capable meantime, As

course, events challenging or floor pandemic, I and, way unfolded not disruption. recovery the Certainly, geopolitical closing not to So maybe I think the normalization or years, year. or first been a of has maybe this really exacerbated the it's about of comment inflation out all our the peers the coming of of seen of biopharma we predict XX pace many envisioned while market in by it kind we've have it.

if a it bit. I think little I think about

might open our up that questions. I markets is the bumps positioned that, buoyant. to to really the strategy company the the point a be term, more the our I be outlook well in could reemphasize the think always a And And to in I are is future that we positive. not near Andy is maybe navigate longer come few There but way. I do has is what really we'll term, of our vision think for can confident operator, what feel just feel changed. With line made, and road

Operator

begin question-and-answer gentlemen, And Instructions]. [Operator now session. ladies the and will we

from from comes question Couillard Brandon line first the Your of Jefferies.

S. Brandon Couillard

There this for most of Ilan, potential by or Sciences, your forecast an business but fact, we the seem far. dramatic guidance Andy question is demand am any And peers of the and year, how share where dynamic losses? I to is, relative you the to Life opposed is in inability the [ market the a assess in as sure started of whether another such trends? ] magnitude this we be do to to accurately said

Andrew Last

you say words. Brandon? very very last few just your piece last didn't the Could again, catch I

S. Brandon Couillard

market losses is, we fact, this versus potential How share in do Life assess a whether in Science. dynamic

Andrew Last

Okay. the out. bioprocessing, effects knock-on good companies of a pushed was that we us that, the really our anticipated being no effects which of Silicon was us. into then one profile But funnel XXXX trajectory. of the the it -- biotech within collapse we're quarter and companies, around and XXXX had our roll which smaller PCR particular, at Valley up it. that a came those I first significant for which out particularly start for factor with Digital orders that think that think And And had the and and that effects while of Look, in for halo out end also Bank deferred something surprise. the the some not had spending we some for, the that's in I And the trajectory Droplet that was communicated effect smaller that, biotechs took experience other really really we impacted meaningful showing in to platform, seen the to

took different I because for little a a for those of quarters think really players. effects it other us So materialize of our is profile the some to to couple

of not the then, inflection gauge to course, probably message I has right have think and players from So continued broadly now, that's category the view pushouts true a very that's well. it. And since The difficult and it's spending then, order across other how point is improved. coming as I in

Simon May

we see as that be across is that high we've terms shifts. level Maybe win-loss whether we business, the or products in in the I'll still expression from the of of really BioPharma talking ratios because a at or block really funnel This you're significant The there's the But or in Western Simon. that the not get our have deteriorated. gene as ratios to our launched really at field conditions shifts add about seeing well we don't products. to win-loss funnels the I significant obviously, any mean, look and any And China our digital well feedback is interest just in there. consistently are look again, we bioprocess that dynamics received. PCR portfolio,

I that it's that Life there our for and transient are believe macro are in year difficult So effects in of don't is positioning do very compounding a Sciences. making competitive think but any this shifts bunch we really a

S. Brandon Couillard

about [indiscernible], I this Ilan, implies very steps a strong XQ think environment guide revenue for normal seasonally million, believe revised usually the up is Okay. either. but isn't to $XXX I

are you're can or is some how that the up revenue in of target So that that swing as keeping variables down What mind? derisked outlook?

Andrew Last

might our have variables worse the The gets effect on variables So but that, a If thinking. China [indiscernible] an That's than it's the it's example, flush that same be swing would that. I they're just that the that's some not more we're not really bit that we're definitively for the we're same trajectory acute Andy. budget not experiencing think QX that year. back if that on, little -- really a in planning expecting news, could materializes, academia good we're this pulled spending that

I may that, that see think think be other could we that I we anything than predict. don't meaningful

Ilan Daskal

of that us And have Brandon, our see in up not realistic kind will add in the just what coming we we speaking, of inputs deviated of the mentioned. X% front with I the Andy to guidance. Generally terms from of approach

overestimating don't the our it's time inputs the end the So of environment to know definitely, is to to continue unusual I kind addition I the circumstance well fourth projections. mean, quarter environment macroeconomic I that this kind we end China going around underestimating the this an year. think or maybe And of in of are today. into

terms companies the year. environment in of funding expected So the not end in the environment improve mind to smaller biotechnology of this through our are

I time quarter with So for quarter this not you, agree to fourth a is be used That the of case historically, us. kind the around. traditionally, stronger seasonality

S. Brandon Couillard

Ilan Okay. started worked Andy, closely you Last then you've and in one, given jump around same the together. and very time, the Bio-Rad back at I'll queue.

You've of been Or to Bio-Rad's operational to transformation stay would to anytime or incentivized know, course? his adequately retirement so. you like X investors do company? soon? last light think to the an eye you departure, you are the in happy Are I direction the with years both instrumental of have

Andrew Last

Brandon, Yes, thanks.

say are virtually just have to sad right, every I can and And really other's closely. see offices day. we Ilan in worked move first, each So extremely you're I on. I'm He

company against not So transformation strategy the really the the view increase it's of the transition. operating it's to And potential which my is want right focus really on I the that. the for I journey. has firmly believe moving to [indiscernible] now been company and forward. started finished. But we a framework, for Ilan good performance of executing thank is point this

Operator

comes Donnelly Citi. . from of Patrick the line Your next question from

Patrick Donnelly

step-up XQ, from year. about XQ talk the of ramp, get one that another just whether margin? Can I on the a people the it's a margin you prior that's XX.X%, that rest yes, on get get to the moving just of there implied in think pretty type it's or comfortable path the number. the Maybe part but margin to XX% meaningful and sequential a pieces side, to realistic

Ilan Daskal

Sure. But And the we with mix in. Patrick, and start of baked I'll kind top software obviously, the I this is chime science. overall, mean, on Andy updated life line, the Ilan. on in can the operating expenses, we some on. lower those operating plan in have you already can dollar that third And expenses working of been see came on to basis. we continue the the quarter, a in that initiatives

So we continue a going the I to quarter. projection line, for bottom we initiatives it here. work on fourth the mean, additional feel overall, realistic into again, And is

Andrew Last

a I may flow-through as volume structure only on the our cost add we're possible. tight mix have focused margin. keeping fourth operating quarter The in still and will operating as decent

Patrick Donnelly

And It about get there then impacting policies could it surprising to see softer over a what that various you Is talk piece seeing? just China, things? a little just to as you're the that's about more Okay. well. just there. if on little be would maybe market diagnostics you bit Can helpful talk discussion

Andrew Last

Okay.

struggling of then recession. is in right to you generally stimulate -- that I way government, And business. the they think, top the So impacting for pricing, side the layer market. are policies, the There's of the and Diagnostics both And volume-based clearly find and that on the to anticorruption, Science there's have Life China. China they're mean, I the made

called growth pieces to They our for a there's a portfolio. the it's of with which those softer little quarter. side, end really we it for just on us for current a elevated improve in for And QX. And have the our relatively the soft we on this we're that. just we biopharma, a backlog finish You clinical business. was reason an still China, the products both and our of of to a of bit and of -- in track And have we which be capital out, through focus had our on expansion going should on sides all slightly clinical to of roughly where the add at can the in business no been may we varying Clinical pretty backlog think tough pull expect products very in year, much year, by be of effect impacts speaking markets and China for end clear created that just as it's but right to extra

Patrick Donnelly

Okay.

often guys the On the more you diagnostics VBP all seeing diagnostic quite side, stuff that instrumentation. with Obviously, anything yet? Are on the is players. up front it comes

Dara Grantham Wright

question? the was What

Andrew Last

The volume-based pricing.

were we Sorry, to here. having difficulty do Dara, just VBP? comment you want on

Dara Grantham Wright

It's to tender requirements. we how impact Sure. starting navigate

But pricing, things I as we're So translating think couple new see -- into for reach a best bit [ in how little it a to sectors, slower how to navigating has deal we're reality other position to that's provinces been is to but are considerations. value-based to starting it historically applied of IBD ].

a working fulfillment of we're then that towards bit and line forward-looking backlog, region right said, waited landing. think that And really a I of chain supply challenges through risk. which well. So sort as have still some now, Andy it's working through we're QX just impacting we're for solid of sort as And in sight

Patrick Donnelly

maybe side. on And one, just last the PCR Okay.

weakness, qPCR you're like seemed down what it Is about it out, broader step it helpful. well. You pockets specific Can you as in think, guys talk just just market? that slowdown? there I Is ddPCR would called be seeing

Simon May

I touched on the think compounding issues that again, we've a it's here. already

that footprint compare. all free the again, pandemic, club got the a there and out seen the layoffs challenges deferrals, of we've in I impacted COVID got of We've We've And digital project talked in there. We've business. think China in fairly PCR got out there's in and market that's systems BioPharma. capacity top biotechs. everything continuation that of the And already on of were in a the about. So else, kind there's qPCR, the bit we've a placed obviously significant of early slowdown a

compounding together. Again, things adding the couple last products years. terms market of how of from we received these these that really what's our this positive feedback again, And of are refreshed all the in the the field environment. over its platform up being market, of roll is get you So right now to in in qPCR but conditions is we out

Andrew Last

extra May add I one just comment.

the PCR, silver lining particular, to the in on demand because occasion focus. digital customer experiencing on You in to constrained in Biotech -- on look they're for kind changes make small cash when remain take BioPharma, the of and What the that other expenditure just actually the structurally we're and strong. desire of in the program purchase comp going on is deferral very they're some going

demand So the very side remains encouraging.

Operator

Nephron. the from line comes question next from of Jack Meehan Your

Jack Meehan

So just out about wanted to talk quarter here. how played the

[indiscernible]. is the below you X% you reason? any into saw talk pressure pacing orders most slipped are the it possible, for about September? quarter. kind about in of XQ the just any Was there the Can that And was revenue So of of

Ilan Daskal

I end is think we think it, way think it the but to about Daskal. quarter, accelerated -- it saw towards The of quarter. I the throughout Ilan Jack this the

was the So decline to towards the weaker, of quarter. get But what started end. the accelerated towards it of throughout definitely, the stronger end it pace was and quarter, the kind weaker but

Jack Meehan

in along Norman, maybe potential bumps more I way. the in your road Okay. comments, for you couple there's And know a mentioned the

the Do you some went customers? like be around kind there's that October? built what you've cutting of like behind maybe Or fourth think a that what Just quarter guide was you're guess, I I like of there the environment through further thinking the the here? seeing ahead in of funding curious the kind debate -- could for new risks amongst changes because investors of through tools cycle?

Norman Schwartz

that that might are in meltdown we that a certainly, where biopharma I of over pandemic we'll we funnel, kind bubble Well, guide, we year. there week. possible and I of much some quarter end fourth be I continuation I carefully of think kind being thought something next have the back as the of think terms seeing there's of about the -- about to of look can order people the everything the normal book these the I some think think saying, that assessment it's of And the to best kind road, think the and at accumulating will in sales always just of -- to as data about made bumps kind up. funnel, else of just I with is the think programs. that think be careful land It readjustments this lot the the When for of and we calling get were in a we're in

Jack Meehan

Understood.

the Okay. despite increased kind previously line little income I sequentially. kind a OpEx revenue statement, basis, that And was you a on at reductions. declining actually kind was and sequentially, of about of it talked non-GAAP looking on then the bit SG&A of

room to pull just SG&A And more was cost given in you line? wondering top is about I in what talk happened the lower like there So if the out quarter? like could

Ilan Daskal

step-up see that So minor of of SG&A it a quarter, kind Usually, the more fourth the initiatives was step-up, usually, working kick quarter. which the you been a much we will higher where the in in have kind of time we in -- actually see Jack. on fourth around, on this on

anticipate we don't the fourth quarter. in So up traditional step the

third quarter, For that material. it wasn't the

Operator

Fargo. Wells of line the Tim from comes from question Daley next Your

Timothy Daley

first the chromatography So on business. process

expecting down mid-single So I previously were decline. single to think high you

the a XX% With or with step pretty the getting down I'm the But up that that, today, implies update even so in to fourth significant year. quarter. for

increase think XQ. dollar XX% like I almost sequential XQ from to

off, us that in can up, right that the you are get have or of step of big sequential seasonality first around I'm slower understand visibility especially to the help confidence for ballpark? to year-end? kind then these commentary than the typical this given kind you So lower a And secondly, that getting numbers

Andrew Last

Andy. Yes, this is

be math of of the So off yes, there. some little I think maybe it's a kind might

in I a in higher. QX. that's step-up there. don't I guidance chrome and a number But of the going meaningful overall seeing mid-teens like of it's think implication think process we're yes, chrome a of really so kind in lower I it's And at just think to end the there, slightly it's kind process math up bit probably

Timothy Daley

how Got big impact recuperated helpful. can revenues like -- be weighing the All just on supply on the then, Andy, that, you quarter some can fully quarter? impacts to was details the fourth what delayed in those And right. And third the expect in revenues, you it. is quarter? That's chain if you Diagnostics provide

Andrew Last

Yes.

-- up impacts plus France pacing Singapore. the obviously, supply of catching quickly, from moved we clinical on We're we to essentially, because get challenge our chain been of it's to difficult side various So right. plants that we've our communicating but COVID sometimes the

consumable as a So if you pull-through also bit pull-through, get you a delay well. of bit of delay, get

faced of pretty good so and a looking QX. line a And we we our at that into QX, But bit have are strong sight now.

Our plant out cranking. is done in We've the workflows really Singapore a of lot leading work there.

some also we're benefit get of get QX the going effect. pull-through that so to And and in

a as just up result overall. being softer So ended QX

Timothy Daley

here then And right. final Norman. for All one

an XXX CAGR the the that May it. With lower, midterm XXX guidance basis XXXX, updated guidance in headwinds so I front or in has now now points incremental guess, basis 'XX points steeper, of for

So XXXX this are a is will evaluating until their put maybe fingerprints given wait CFO will? own current on the in target? if new to the is seat something you the Or that environment, you how

Ilan Daskal

the pattern. have this color. and I communicated in and is the probably insight we going in shape XXXX targets. to holding about more XXXX in our the a is perspective But order will Ilan, some would in kind So Norman XXXX chime visibility will get We thinking additional already prior that then our Tim, into of like quarter, to targets from

numbers, XXXX [ the reason we what earnings early front and have to kind call in of in the it guidance whether the probably think to of year, when and around]. So it's know XXXX next of us, kind magnitude about we'll the how impact next see

Norman Schwartz

it pretty well. covers I that think

Operator

from comes Capital. question next RBC Conor of McNamara Your from line the

Conor Noel McNamara

in likely by XXXX general? year? XXXX to just guidance, end this Just just which And this that likely without in XXXX think to in getting persist how called the we and which are should into of headwinds quarter end about out you

Ilan Daskal

Conor, Ilan. this is

with various aspects macroeconomic weeks. with will not few that in So I personally recover that I'm a obviously start are sure can China like associated the

stay So that yield treasury a here while. may linked is take stay. is environment a little is the bit obviously inflationary The to indirectly for longer. environment, here The funding to to which

will And biotechnology funding. smaller impact their companies So some on the while a spend. of pace about there to the does have for and continue probably the way think they

about we getting have the of experienced not areas want So definitely is that think to we kind before. it that are [indiscernible] geopolitical of these to level not a then and probably to about kind that to new mention think

mean, that speaking, overall, in So you for okay you there doing probably us, when when for But a are is about is I already recession. think multiple and us. Germany Europe, -- there about generally fronts think Europe, the macroeconomic,

interesting. going election mean So to it's domestically. be specifically that domestically, year into an going I we're

with kind But have doesn't how products, they're organic new do to up. own anywhere. are of see will and end everything initiatives, it not to anything have we'll going the So that wait disappearing, our markets shape products, not

So it's only from timing my perspective, a issue. only

Conor Noel McNamara

other any PCR. up slowdown to just about just following than was question because And Can about talk your units. that Patrick's Great. Okay. specifically ddPCR, of you worse business

So give investors can -- making some market get we some out framework to how have -- can not because you do that definitely pressure and competitive how about competitors we think comfort that environment some there a noise. how been there that's

So we ddPCR? about good sure you position feel still in just to that make there want your market

Simon May

we've wins there the about as continue we a help the that we called feel the of position. out think to no us And that the reflect fact I had intensified. the I mean, we good going made we in well scripts, notable to couple I of think we as for landscape QX, still on position is really are think competitive secret future.

these saw an exacerbation biopharma really is we what QX, again, of think in I impacts.

And cumulative money the but saw think secular seeing just continuing products, is the strength the lot a layoffs we projects a in budget impact flowing. again, environment. Once in biotech and extremely these put in have not tight QX what We in of sector. deferred I early was interest the of we're

really QXXXX see platform. acceptance our of We healthy continue to adoption strong and

these the we're playing all from enter when platform believe transient in we course, BioPharma So end Continuum And the then, be in of going lower got to with a XXXX. we've segments, to as we look in to strong plan and are we who think really competitors it, the emerge there impacts and we in that future, if we position. more QX

recover. pressure got when positions intensifying, these markets think sure, I will continue got these where in for the So responses leading and we've do compelling but we've competitive and to as is well segments

Conor Noel McNamara

pricing. just the What's And And follow-up this that a pricing forward? Great. on should in environment is how think about across Life guess we Sciences. And quick going I like? everything

Andrew Last

Yes.

think is the inflationary. environment I still that

done is And modest do we when the take probably you and you look price As as on offset to year. very we inflationary we get that On we've price Science, forward to side, and pressures we're increases our do will can clinical increases. opportunity. periodic to inflationary that effect and we try move only Life modest receiving. still there expect that we business, still this that tender-driven the appreciate, -- take help And

And and on do over think to X.X of ]. expect that, I price, think least point quarter, got We just next in price probably at that floor year. basis [ points the X be should a a we net of that

Simon May

process a [ ] Chrome as well. mix there We've impact seen we

Conor Noel McNamara

a just Norm. for question. And final Okay. This

that equity environment? pursue in you change the how still considering still you your issuing to given in selloff recent does would the space this consider your an at stock, Just acquisition would specifically acquisition and target And in strategy, all? if

Norman Schwartz

stock of So think our recent point, in of continuing I for very we kind our much part M&A. allocation this obviously, and as will repurchases not light strategy I think consider at that dislocation, capital good a of share such the currency

continue in of fact, while our transformation. quarters say next navigating more will it's kind at probably the of focus I we to I fair look around think over centered our do be our and operational markets think, kind that to opportunities, continued of several

Operator

this would to back turn are no at I further to like questions further remarks. it Edward for Chung time. There

Yong Chung

call. today's joining for you Thank

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

Operator

Thank you ladies call. participating. conference today's you. and And Thank this concludes gentlemen, for

now may disconnect. You

Bio-Rad Laboratories (BIO) 26 Oct 232023 Q3 Earnings call transcript