BIO-RAD LABORATORIES INC
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
BIO-B$379.50+4.2%Stored close · as of Oct 27, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0000012208-24-000039
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0000012208-24-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 45 previous paragraphs and 64 current paragraphs.
21 unchanged; 23 reworded; 12 added; 1 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Research and development (R&D) expense for the second quarter of 2024 was $58.9 million or 9.2% of sales, compared to $65.0 million or 9.5% of sales in the second quarter of 2023. The decrease in R&D expense was primarily due to cost control and lower restructuring costs.
Current report
Other income, net for the second quarter of 2024 was $18.1 million compared to $16.5 million for the second quarter of 2023. The difference in Other income, net was primarily attributable to lower net realized loss on investments.
Current report
Six Months Ended June 30, 2024 Compared to
Current report
Six Months Ended June 30, 2023
Current report
Net sales (sales) for the first six months of 2024 were $1.25 billion compared to $1.36 billion in the first six months of 2023, a decrease of 8.0%. On a currency neutral basis, the first six months of 2024 sales decreased by approximately 7.5% compared to the same period in 2023. The decrease in net sales was driven by lower sales in our Life Science segment.
Current report
The Life Science segment sales for the first six months of 2024 were $492.2 million, a decrease of 21.1% compared to the same period last year. On a currency neutral basis, sales decreased 20.8% compared to the first six months of 2023, driven broadly by ongoing weakness in the biotech and biopharma end-markets. Currency neutral sales decreased across all regions.
Current report
Results of Operations – Non-operating
Current report
Interest expense for the first six months of 2024 and 2023 was $24.5 million and $24.7 million, respectively, which primarily consisted of interest expense related to the $1.2 billion Senior Notes.
Current report
During the second quarter of 2024, 21,017 shares of Class A treasury stock with an aggregate total cost of $7.4 million were reissued to fulfill grants to employees under our restricted stock program and our Employee Stock Purchase Program. Upon reissuing the Class A treasury stock, Additional paid-in-capital was reduced by$2.7 million from share reissuance activity during the quarter.
Current report
On July 29, 2024, Bio-Rad's board of directors authorized increasing the amount available under the company's 2023 Share Repurchase Program to allow the company to repurchase up to an additional $500 million of the company’s outstanding common stock.
Current report
During the second quarter of 2023, 17,428 shares of Class A treasury stock with an aggregate total cost of $6.9 million were reissued to fulfill grants to employees under our restricted stock program and our Employee Stock Purchase Program. Upon reissuing the Class A treasury stock, Additional paid-in-capital was reduced by $2.1 million from share reissuance activity during the quarter..
Current report
During the second quarter of 2023, we repurchased 549,863 shares of Class A common stock for $207.4 million under our Share Repurchase Program. We designated these repurchased shares as treasury stock.
Removed paragraphs (1)
Previous report
No shares were repurchased during the first quarter of 2023.
Reworded paragraphs (23)
Previous wording
This discussion should be read in conjunction with the information contained in both our consolidated financial statements for the year ended December 31, 2023 and the condensed consolidated financial statements for the three months ended March 31, 2024.
Current wording
This discussion should be read in conjunction with the information contained in both our consolidated financial statements for the year ended December 31, 2023 and the condensed consolidated financial statements for the three and six months ended June 30, 2024.
Previous wording
We are impacted by ongoing global economic conditions and our business continued to be negatively impacted by the recent economic constraints in China and the ongoing challenges impacting the biopharma market and small biotech companies. We expect that these conditions will continue to impact our business in 2024.
Current wording
We are impacted by ongoing global economic conditions and our business continued to be negatively impacted by the ongoing challenges impacting the biopharma market and small biotech companies. We expect that these conditions will continue to impact our business in 2024.
Previous wording
The following table shows cost of goods sold, gross profit, components of operating expense, (gains) losses from change in fair market value of equity securities and loan receivable, and net income as a percentage of net sales:
Current wording
The following table shows cost of goods sold, gross profit, components of operating expense, losses from change in fair market value of equity securities and loan receivable, and net loss as a percentage of net sales:
Previous wording
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably likely to occur could materially impact the financial statements. Management believes that there have been no significant changes during the three months ended March 31, 2024 to the items that we disclosed as our critical accounting policies and estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Current wording
An accounting policy is deemed to be critical if it affects our financial statements materially and requires subjective or complex judgements by management. An accounting estimate is deemed to be critical if it requires assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably likely to occur could materially impact the financial statements. Management believes that there have been no significant changes during the three and six months ended June 30, 2024 to the items that we disclosed as our critical accounting policies and estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Previous wording
There have been no substantial changes in our significant accounting policies during the three months ended March 31, 2024, compared with the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
There have been no substantial changes in our significant accounting policies during the three and six months ended June 30, 2024, compared with the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
Net sales (sales) for the first quarter of 2024 were $610.8 million compared to $676.8 million in the first quarter of 2023, a decrease of 9.8%. On a currency neutral basis, first quarter 2024 sales decreased by approximately 9.6% compared to the same period in 2023. The decrease in net sales was driven by lower sales in our Life Science segment.
Current wording
Net sales (sales) for the second quarter of 2024 were $638.5 million compared to $681.1 million in the second quarter of 2023, a decrease of 6.3%. On a currency neutral basis, second quarter 2024 sales decreased by approximately 5.4% compared to the same period in 2023. The decrease in net sales was driven by lower sales in our Life Science segment.
Previous wording
The Life Science segment sales for the first quarter of 2024 were $241.7 million, a decrease of 25.3% compared to the same period last year. On a currency neutral basis, sales decreased 25.2% compared to the first quarter in 2023, driven broadly by ongoing weakness in the biotech and biopharma end-markets and the economic environment in China. The currency neutral sales decrease impacted all regions.
Current wording
The Life Science segment sales for the second quarter of 2024 were $250.5 million, a decrease of 16.5% compared to the same period last year. On a currency neutral basis, sales decreased 15.9% compared to the second quarter in 2023, driven broadly by ongoing weakness in the biotech and biopharma end-markets. Currency neutral sales decreased across all regions.
Previous wording
The Clinical Diagnostics segment sales for the first quarter of 2024 were $368.6 million, an increase of 4.7% compared to the same period last year. On a currency neutral basis, sales increased 4.8% compared to the first quarter in 2023. The currency neutral sales increase was primarily driven by an increased demand for quality controls, blood typing, and diabetes. Currency neutral sales increased across all regions.
Current wording
The Clinical Diagnostics segment sales for the second quarter of 2024 were $387.9 million, an increase of 2.1% compared to the same period last year. On a currency neutral basis, sales increased 3.2% compared to the second quarter in 2023. The currency neutral sales increase was primarily driven by an increased demand for quality controls and blood typing. Currency neutral sales increased across all regions.
Previous wording
Consolidated gross margin was 53.4% for the first quarter of 2024 compared to 53.5% for the first quarter of 2023. Gross margin for the Life Science segment for the first quarter of 2024 decreased by approximately 3.5 percentage points from the same period last year. The decrease in gross margin was primarily driven by lower sales volume, product mix and higher material costs, partially offset by cost control measures. Gross margin for the Clinical Diagnostics segment for the first quarter of 2024 increased by approximately 3.1 percentage points from the same period last year. The increase in gross margin was primarily driven by favorable product mix and cost control measures, partially offset by higher material costs.
Current wording
Consolidated gross margin was 55.6% for the second quarter of 2024 compared to 53.2% for the second quarter of 2023. Gross margin for the Life Science segment for the second quarter of 2024 increased by approximately 2.8 percentage points from the same period last year. The increase in gross margin was primarily driven by cost control measures and product mix, partially offset by lower sales volume and higher material costs. Gross margin for the Clinical Diagnostics segment for the second quarter of 2024 increased by approximately 2.3 percentage points from the same period last year. The increase in gross margin was primarily driven by cost control measures, higher sales volume, and product mix, partially offset by higher material costs.
Previous wording
Selling, general and administrative (SG&A) expense for the first quarter of 2024 was $214.9 million or 35.2% of sales, compared to $225.6 million, or 33.3% of sales for the first quarter of 2023. The decrease in SG&A expense was primarily due to lower employee-related expenses, lower restructuring costs, and a reduction in discretionary spending.
Current wording
Selling, general and administrative (SG&A) expense for the second quarter of 2024 was $194.7 million or 30.5% of sales, compared to $207.8 million, or 30.5% of sales for the second quarter of 2023. The decrease in SG&A expense was primarily due to lower employee-related expenses, lower restructuring costs, and a reduction in discretionary spending.
Previous wording
Interest expense was $12.3 million for both the first quarter of 2024 and 2023, which primarily consist of interest expense related to the $1.2 billion Senior Notes.
Current wording
Interest expense was $12.3 million for both the second quarter of 2024 and 2023, which primarily consisted of interest expense related to the $1.2 billion Senior Notes.
Previous wording
Foreign currency exchange gains, net consist primarily of foreign currency transaction gains and losses on intercompany net receivables and payables and the change in fair value of our forward foreign exchange contracts used to manage our foreign currency exchange risk. Foreign currency exchange gains, net was $2.0 million for the first quarter of 2024 compared to foreign currency exchange gains, net of $2.3 million for the first quarter of 2023. Gains and losses are primarily due to the estimating process inherent in the timing of product shipments and intercompany debt payments, market volatility, and the change in the fair value of our foreign exchange contracts.
Current wording
Foreign currency exchange gains, net consist primarily of foreign currency transaction gains and losses on intercompany net receivables and payables and the change in fair value of our forward foreign exchange contracts used to manage our foreign currency exchange risk. Foreign currency exchange gains, net was $1.7 million for the second quarter of 2024 compared to foreign currency exchange gains, net of $1.3 million for the second quarter of 2023. Gains and losses are primarily due to the estimating process inherent in the timing of product shipments and intercompany debt payments, market volatility, and the change in the fair value of our foreign exchange contracts.
Previous wording
(Gains) losses from change in fair market value of equity securities and loan receivable was a gain of $422.2 million and a loss of $17.5 million for the first quarter of 2024 and 2023, respectively. The change in the fair market value primarily resulted from the recognition of holding gains of $402.3 million in the first quarter of 2024 compared to holding losses of $20.1 million in the first quarter of 2023 on our position in Sartorius AG. In addition, gains from the change in fair value of our loan receivable of $12.3 million in the first quarter of 2024 compared to a loss of $2.2 million in the first quarter of 2023 contributed to the change.
Current wording
Losses from change in fair market value of equity securities and loan receivable was $2.90 billion and $1.60 billion for the second quarter of 2024 and 2023, respectively. The change in the fair market value primarily resulted from the recognition of higher holding losses of $2.87 billion in the second quarter of 2024 compared to holding losses of $1.58 billion in the second quarter of 2023 on our position in Sartorius AG. In addition, higher losses from the change in fair value of our loan receivable of $22.7 million in the second quarter of 2024 compared to a loss of $18 million in the second quarter of 2023 contributed to the change.
Previous wording
Research and development (R&D) expense for the first quarter of 2024 was $66.4 million or 10.9% of sales, compared to $75.0 million or 11.1% of sales in the first quarter of 2023. The decrease in R&D expense was primarily due to lower employee-related expenses and lower restructuring costs.
Current wording
Research and development (R&D) expense for the first six months of 2024 was $125.3 million or 10.0% of sales, compared to $140.0 million or 10.3% of sales in the first six months of 2023. The decrease in R&D expense was primarily due to cost control, lower restructuring costs, and lower employee-related expenses.
Previous wording
Other income, net for the first quarter of 2024 was $34.5 million compared to $50.4 million for the first quarter of 2023. The difference in other income, net of $15.9 million was primarily attributable to lower dividend income from Sartorius AG.
Current wording
Other income, net for the first six months of 2024 was $52.7 million compared to $66.9 million for the first six months of 2023. The difference in Other income, net was primarily attributable to lower dividend income from Sartorius AG.
Previous wording
Our effective income tax rate was 21.8% and 18.7% for the first quarter of 2024 and 2023, respectively. The effective tax rate reported in the first quarter of 2024 was primarily affected by an unrealized gain in equity securities and the effective tax rate reported in the first quarter of 2023 was primarily affected by an unrealized loss in equity securities. The difference in the rate is primarily driven by geographical mix of earnings.
Current wording
Our effective income tax rate was 22.4% and 22.8% for the first six months of 2024 and 2023, respectively. The effective tax rate reported in the first half of both 2024 and 2023 was primarily affected by the accounting treatment of our equity securities. The difference in the rate is primarily driven by geographical mix of earnings.
Previous wording
At March 31, 2024, we had available $1.65 billion in cash, cash equivalents and short-term investments, of which approximately 16% was held in our foreign subsidiaries. The amount of funds held in the United States can fluctuate due to the timing of receipts and payments in the ordinary course of business and due to other reasons, such as acquisitions and borrowings. As part of our ongoing liquidity assessments, we regularly monitor the mix of domestic and foreign cash flows (both inflows and outflows).
Current wording
At June 30, 2024, we had available $1.62 billion in cash, cash equivalents and short-term investments, of which approximately 18% was held in our foreign subsidiaries. The amount of funds held in the United States can fluctuate due to the timing of receipts and payments in the ordinary course of business and due to other reasons, such as acquisitions and borrowings. As part of our ongoing liquidity assessments, we regularly monitor the mix of domestic and foreign cash flows (both inflows and outflows).
Previous wording
Net cash provided by operations was $69.8 million and $98.1 million for the three months ended March 31, 2024 and 2023, respectively. The decrease in operating cash flows was primarily due to lower cash received from customers and higher cash paid to suppliers and employees, partially offset by lower income tax paid and higher proceeds from foreign exchange contracts.
Current wording
Net cash provided by operations was $167.4 million and $196.2 million for the six months ended June 30, 2024 and 2023, respectively. The decrease in operating cash flows was primarily due to lower cash received from customers, higher income tax paid and lower dividend proceeds, partially offset by lower cash paid to suppliers and employees and higher proceeds from foreign exchange contracts.
Previous wording
Net cash used in investing activities was $43.1 million and $70.5 million for the three months ended March 31, 2024 and 2023, respectively. The decrease in cash used in investing activities was primarily due to the timing of our purchases, maturities and sales of marketable securities and investments, partially offset by higher capital expenditures.
Current wording
Net cash used in investing activities was $74.0 million and $42.5 million for the six months ended June 30, 2024 and 2023, respectively. The increase in cash used in investing activities was primarily due to the timing of our purchases, maturities and sales of marketable securities and investments, and higher capital expenditures.
Previous wording
Net cash provided by financing activities was $0.0 million and $4.3 million for the three months ended March 31, 2024, and 2023, respectively. The decrease in net cash provided by financing activities was primarily attributable to higher payments for purchases of treasury stock, partially offset by higher proceeds from reissuance of treasury stock.
Current wording
Net cash used in financing activities was $96.6 million and $198.4 million for the six months ended June 30, 2024, and 2023, respectively. The decrease in net cash used in financing activities was primarily attributable to lower payments for purchases of treasury stock.
Previous wording
During the first quarter of 2024, we repurchased 14,250 shares of Class A common stock for $4.7 million under our 2023 Share Repurchase Program. We designated these repurchased shares as treasury stock. As of March 31, 2024, $274.0 million remained available for repurchases under the 2023 Share Repurchase Program.
Current wording
During the second quarter of 2024, we repurchased 346,226 shares of Class A common stock for $100 million under our 2023 Share Repurchase Program. We designated these repurchased shares as treasury stock. As of June 30, 2024, $174.0 million remained available for repurchases under the 2023 Share Repurchase Program.
Previous wording
During the first quarter of 2024, 19,755 shares of Class A treasury stock with an aggregate total cost of $7.2 million were reissued to fulfill grants to employees under our restricted stock program and our Employee Stock Purchase Program. Upon reissuing the Class A treasury stock, Additional paid-in-capital was reduced by$1.7 million from share reissuance activity during the quarter.
Current wording
During the first quarter of 2024, 19,755 shares of Class A treasury stock with an aggregate total cost of $7.2 million were reissued to fulfill grants to employees under our restricted stock program and our Employee Stock Purchase Program. Upon reissuing the Class A treasury stock, Additional paid-in-capital was reduced by $1.7 million from share reissuance activity during the quarter.
Previous wording
We did not adopt any new accounting pronouncements during the three months ended March 31, 2024.
Current wording
We did not adopt any new accounting pronouncements during the three and six months ended June 30, 2024.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Our effective income tax rate was 22.3% and 22.5% for the second quarter of 2024 and 2023, respectively. The effective tax rate reported in these periods was primarily affected by the accounting treatment of our equity securities. The difference in the rate is primarily driven by geographical mix of earnings.
Current report — wording carried from elsewhere
Results of Operations -- Sales, Margins and Expenses
Current report — wording carried from elsewhere
The Clinical Diagnostics segment sales for the first six months of 2024 were $756.6 million, an increase of 3.3% compared to the same period last year. On a currency neutral basis, sales increased 4.0% compared to the first six months of 2023. The currency neutral sales increase was primarily driven by an increased demand for quality controls and blood typing. Currency neutral sales increased across all regions.
Current report — wording carried from elsewhere
Consolidated gross margins were 54.5% for the first six months of 2024 compared to 53.4% for the first six months of 2023. Gross margins for the Life Science segment for the first six months of 2024 decreased by approximately 0.4 percentage points from the same period last year. The decrease in gross margin was primarily driven by lower sales volume, higher material costs, partially offset by product mix and cost control measures. Gross margin for the Clinical Diagnostics segment for the first six months of 2024 increased by approximately 2.6 percentage points from the same period last year. The increase in gross margins was primarily driven by higher sales volume, favorable product mix, and cost control measures, partially offset by higher material costs.
Current report — wording carried from elsewhere
Selling, general and administrative (SG&A) expense for the first six months of 2024 was $409.6 million or 32.8% of sales, compared to $433.4 million or 31.9% of sales for the first six months of 2023. The decrease in SG&A expense was primarily due to lower employee-related expenses, lower restructuring costs, and a reduction in discretionary spending.
Current report — wording carried from elsewhere
Foreign currency exchange gains, net consist primarily of foreign currency transaction gains and losses on intercompany net receivables and payables and the change in fair value of our forward foreign exchange contracts used to manage our foreign currency exchange risk. Foreign currency exchange gains, net was $3.7 million for the first six months of 2024 compared to $3.6 million for the first six months of 2023. Gains and losses are primarily due to the estimating process inherent in the timing of product shipments and intercompany debt payments, market volatility, and the change in the fair value of our foreign exchange contracts.
Current report — wording carried from elsewhere
Losses from change in fair market value of equity securities and loan receivable was $2.47 billion and $1.61 billion for the first six months of 2024 and 2023, respectively. The change in the fair market value primarily resulted from the recognition of higher holding losses of $2.47 billion in the first six months of 2024 compared to holding losses of $1.60 billion in the first six months of 2023 on our position in Sartorius AG. In addition, lower losses from the change in fair value of our loan receivable of $10.4 million in the first six months of 2024 compared to a loss of $24.0 million in the first six months of 2023 contributed to the change.
Current report — wording carried from elsewhere
During the first quarter of 2024, we repurchased 14,250 shares of Class A common stock for $4.7 million under our 2023 Share Repurchase Program. We designated these repurchased shares as treasury stock.