Business Wire | Oct 29, 2020 04:16PM EDT

Bio-Rad Reports Third-Quarter 2020 Financial Results

Oct. 29, 2020

HERCULES, Calif.--(BUSINESS WIRE)--Oct. 29, 2020--Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb), a global leader of life science research and clinical diagnostic products, today announced financial results for the third quarter ended September 30, 2020.

Third-quarter 2020 net sales were $647.3 million, an increase of 15.5 percent compared to $560.6 million reported for the third quarter of 2019. On a currency-neutral basis, quarterly sales increased 14.9 percent compared to the same period in 2019. Third-quarter gross margin was 56.7 percent compared to 54.8 percent during the third quarter in 2019.

Life Science segment net sales for the third quarter were $324.0 million, an increase of 50.2 percent compared to the same period in 2019. On a currency-neutral basis, Life Science segment sales increased by 48.8 percent compared to the same quarter in 2019. Currency-neutral sales growth was primarily attributed to sales of our PCR and Droplet Digital PCR product lines, which experienced significant demand resulting from the COVID-19 pandemic. Our Process Media product lines also benefitted the Life Science segment. On a geographic view, all regions experienced currency-neutral sales growth compared to the same quarter last year.

Clinical Diagnostics segment net sales for the third quarter were $322.2 million, a decrease of 5.7 percent compared to the same period in 2019. On a currency-neutral basis, net sales were down 5.9 percent versus the same quarter last year. The currency-neutral sales decrease was primarily driven by lower demand resulting from the COVID-19 pandemic and was across most product lines and across all regions.

Income from operations during the third quarter of 2020 was $109.6 million versus $57.5 million during the same quarter last year.

Net income for the third quarter of 2020 was $1,314.8 million, or $43.64 per share on a diluted basis versus a net loss of ($258.8) million, or ($8.68) per share, on a diluted basis, during the same period in 2019. The net income (loss) for the third quarter of 2020 and 2019, respectively, was impacted by the recognition of changes in the fair market value of equity securities, primarily related to the holdings of our investment in Sartorius AG. The effective tax rate for the third quarter of 2020 was 21.9 percent, compared to 22.8 percent for the same period in 2019. The tax rates in both periods were driven by the changes in the fair market value of equity securities.

"As we anticipated, sales during the third quarter continued to be impacted both positively and negatively by the coronavirus pandemic," said Norman Schwartz, Bio-Rad President and Chief Executive Officer. "However, we experienced increased activity and lab utilization across our customers, globally. Although the COVID-19 situation is still unpredictable, we remain focused on our core strategies as well as our contributions in response to the pandemic. We would like to recognize our employees around the world who continue to make extraordinary efforts to serve our customers during this challenging time," he said.

GAAP Results

Q3 2020 Q3 2019

Revenue (millions) $647.3 $560.6

Gross margin 56.7% 54.8%

Operating margin 16.9% 10.2%

Net income (loss) (millions) $1,314.8 ($258.8)

Income (loss) per diluted share $43.64 ($8.68)



Non-GAAP Results

Q3 2020 Q3 2019

Gross margin 57.5% 56.0%

Operating margin 18.8% 12.0%

Net income (millions) $90.3 $48.6

Income per diluted share $3.00 $1.61

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this press release. Non-GAAP adjustments include amortization of purchased intangibles; acquisition-related expenses and benefits; restructuring, impairment charges and valuation changes in equity-owned securities; gains and losses on equity-method investments; significant litigation charges or benefits and legal costs; and discrete income tax events and the income tax effect on these non-GAAP adjustments.

Non-GAAP net income and non-GAAP diluted income per share (non-GAAP EPS) are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Non-GAAP Reporting."

Non-GAAP net income for the third quarter of 2020 was $90.3 million, or $3.00 per share on a diluted basis, compared to $48.6 million, or $1.61 per share on a diluted basis, during the same period in 2019.

The non-GAAP effective tax rate for the third quarter of 2020 was 22.5 percent, compared to 25.5 percent for the same period in 2019. The decrease in the rate was driven by a change in our geographic mix of earnings and the taxation of our foreign earnings.

The following table represents a reconciliation of Bio-Rad's reported net income (loss) and diluted income (loss) per share to non-GAAP net income and non-GAAP diluted income per share for the three and nine months ended September 30, 2020 and 2019:

(in thousands, except per Three Months Ended Nine Months Endedshare data) September 30, September 30,

2020 2019 2020 2019

$ $1,314,824 (258,816) $2,967,165 $1,205,189GAAP net income (loss)

Amortization of purchased 7,163 5,809 20,257 16,490intangibles

Legal matters 5,977 (1,900) 10,395 4,593

Acquisition related costs 165 6 (837) (7,762)(benefits)

Restructuring (benefits) (1,111) 5,928 (827) 5,749costs

Valuation (gain) loss on (1,580,350) 390,620 (3,591,509) (1,384,999)equity-owned securities

Loss on equity-method 183 37 2,634 698investments

Other non-recurring items - - (11,680) (759)

Income tax effect on 343,401 (93,040) 800,631 303,890non-GAAP adjustments

Non-GAAP net income $90,252 $48,644 $196,229 $143,089



$43.64 $(8.68) $98.46 $39.97GAAP diluted income (loss) per share

$3.00 $1.61 $6.51 $4.75Non-GAAP diluted income per share

On a reported basis, net sales for the first three quarters of 2020 increased 4.1 percent to $1,755.8 million compared to $1,687.2 million for the same period in 2019. On a currency-neutral basis, net sales grew 5.0 percent.

Year-to-date net income for 2020 was $2,967.2 million, or $98.46 per share on a fully diluted basis, compared to $1,205.2 million, or $39.97 per share, respectively, during the same period in 2019. As mentioned earlier, the COVID-19 pandemic impacted overall results for the first three quarters of the year. On a non-GAAP basis net income for the first three quarters of 2020 was $196.2 million, or $6.51 per share, compared to $143.1 million, or $4.75 per share, during the same period in 2019.

"Although 2020 was met with many challenges, our team has been able to effectively respond," Mr. Schwartz said. "As we head into the end of the year, we continue to expect a gradual improvement in our end-markets. Through our team's discipline and tight cost control in this unique year, we expect to generate significantly higher operating profit over 2019."

2020 Financial Outlook

The company currently believes that full-year 2020 year-over-year currency-neutral sales may be up 5.9 to 6.3 percent with an estimated non-GAAP operating margin of 16.0 to 16.5 percent. Management will discuss this outlook in greater detail on the third-quarter 2020 financial results conference call.

Use of Non-GAAP Reporting and Currency-Neutral

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including non-GAAP net income and non-GAAP EPS, which exclude amortization of acquisition-related intangible assets, certain acquisition-related expenses and benefits, restructuring charges, asset impairment charges, valuation changes of equity-owned securities, gains and losses on equity-method investments, and significant legal-related charges or benefits and associated legal costs. Non-GAAP net income and non-GAAP EPS also exclude certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability, tax provisions/benefits related to the previous items, and significant discrete tax events. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods.

We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operation of our business. We believe that disclosing non-GAAP financial measures provides useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. We also believe that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. More specifically, management adjusts for the excluded items for the following reasons:

Amortization of purchased intangible assets: we do not acquire businesses and assets on a predictable cycle. The amount of purchase price allocated to purchased intangible assets and the term of amortization can vary significantly and are unique to each acquisition or purchase. We believe that excluding amortization of purchased intangible assets allows the users of our financial statements to better review and understand the historic and current results of our operations, and also facilitates comparisons to peer companies.

Acquisition-related expenses and benefits: we incur expenses or benefits with respect to certain items associated with our acquisitions, such as transaction costs, professional fees for assistance with the transaction; valuation or integration costs; changes in the fair value of contingent consideration, gain or loss on settlement of pre-existing relationships with the acquired entity; or adjustments to purchase price. We exclude such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of our on-going business.

Restructuring, impairment charges and valuation changes in equity-owned securities and gains and losses on equity-method investments: we incur restructuring and impairment charges on individual or groups of employed assets and charges and benefits arising from valuation changes in equity-owned securities and gains and losses on equity-method investments, which arise from unforeseen circumstances and/or often occur outside of the ordinary course of our on-going business. Although these events are reflected in our GAAP financials, these unique transactions may limit the comparability of our on-going operations with prior and future periods.

Significant litigation charges or benefits and legal costs: we may incur charges or benefits as well as legal costs in connection with litigation and other contingencies unrelated to our core operations. We exclude these charges or benefits, when significant, as well as legal costs associated with significant legal matters, because we do not believe they are reflective of on-going business and operating results.

Income tax expense:we estimate the tax effect of the excluded items identified above to determine a non-GAAP annual effective tax rate applied to the pretax amount in order to calculate the non-GAAP provision for income taxes. We also adjust for items for which the nature and/or tax jurisdiction requires the application of a specific tax rate or treatment.

From time to time in the future, there may be other items excluded if we believe that doing so is consistent with the goal of providing useful information to investors and management.

Percentage sales growth in currency neutral amounts are calculated by translating prior period sales in each local currency using the current period's monthly average foreign exchange rates for that currency and comparing that to current period sales.

There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact on our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.

Conference Call and Webcast

Management will discuss third-quarter ended September 30, 2020 results in a conference call at 3 PM Pacific Time (6 PM Eastern Time) October 29, 2020. To listen, call 855-779-9068 within the U.S. or 631-485-4862 outside the U.S., passcode: 7061137. You may also listen to the conference call live via a webcast that is available on the "Investor Relations" section of our website under "Quarterly Results" at bio-rad.com. The webcast will be available for up to a year.

BIO-RAD and DROPLET DIGITAL PCR are trademarks of Bio-Rad Laboratories, Inc. in certain jurisdictions.

About Bio-Rad

Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb) is a global leader in developing, manufacturing, and marketing a broad range of innovative products for the life science research and clinical diagnostic markets. With a focus on quality and customer service for over 65 years, our products advance the discovery process and improve healthcare. Our customers are university and research institutions, hospitals, public health and commercial laboratories, biotechnology and pharmaceutical companies, as well as applied laboratories that include food safety and environmental quality. Founded in 1952, Bio-Rad is based in Hercules, California, and has a global network of operations with approximately 8,000 employees worldwide. Bio-Rad had revenues exceeding $2.3 billion in 2019. For more information, please visit bio-rad.com.

This release may be deemed to contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements we make regarding estimated future financial performance or results, that we remain focused on our core strategies as well as our contributions in response to the pandemic, believing that full-year 2020 year-over-year currency-neutral sales may be up 5.9 to 6.3 percent with an estimated non-GAAP operating margin of 16.0 to 16.5 percent, continuing to expect a gradual improvement in our end-markets as we head into the end of the year, and expecting to generate significantly higher operating profit over 2019 through our team's discipline and tight cost control in this unique year. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "anticipate," "estimate," "expect," "continue," "believe," "will," "project," "assume," "may," "intend," or similar expressions or the negative of those terms or expressions, although not all forward-looking statements contain these words. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. These risks and uncertainties include the duration, severity and impact of the COVID-19 pandemic, global economic conditions, our ability to develop and market new or improved products, our ability to compete effectively, foreign currency exchange fluctuations, reductions in government funding or capital spending of our customers, international legal and regulatory risks, supply chain issues, product quality and liability issues, our ability to integrate acquired companies, products or technologies into our company successfully, changes in the healthcare industry, and natural disasters and other catastrophic events beyond our control. For further information regarding the Company's risks and uncertainties, please refer to the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's public reports filed with the Securities and Exchange Commission (the "SEC"), including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020 to be filed with the SEC. The Company cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. Bio-Rad Laboratories, Inc. disclaims any obligation to update these forward-looking statements.

Bio-Rad Laboratories, Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Net sales $ 647,263 $ 560,633 $ 1,755,787 $ 1,687,231

Cost of goods 279,952 253,607 778,120 760,674 soldGross profit 367,311 307,026 977,667 926,557

Selling,general and 198,165 201,622 581,119 610,460 administrativeexpenseResearch and 59,546 47,944 160,833 145,641 developmentexpenseIncome from 109,600 57,460 235,715 170,456 operations Interest 5,728 5,525 17,158 17,352 expenseForeigncurrency 776 898 2,478 3,411 exchangelosses, netChange in fairmarket value (1,580,350 ) 390,620 (3,591,509 ) (1,384,999 )of equitysecuritiesOther (income) (1,015 ) (4,367 ) (21,517 ) (26,959 )expense, netIncome (loss) 1,684,461 (335,216 ) 3,829,105 1,561,651 before incometaxes (Provisionfor) benefit (369,637 ) 76,400 (861,940 ) (356,462 )from incometaxesNet income $ 1,314,824 $ (258,816 ) $ 2,967,165 $ 1,205,189 (loss) Basic earnings(loss) pershare:Net income $ 44.24 $ (8.68 ) $ 99.75 $ 40.42 (loss) perbasic share Weighted 29,721 29,831 29,746 29,815 average commonshares - basic Dilutedearnings(loss) pershare:Net income $ 43.64 $ (8.68 ) $ 98.46 $ 39.97 (loss) perdiluted share Weightedaverage common 30,128 29,831 30,137 30,149 shares -dilutedNote:

As a result of the net loss for the three months ended September 30, 2019, all potentially issuable common shares have been excluded from the diluted shares used in the computation of earnings per share as their effect was anti-dilutive.

As a result of the net loss for the three months ended September 30,Note: 2019, all potentially issuable common shares have been excluded from the diluted shares used in the computation of earnings per share as their effect was anti-dilutive.

Bio-Rad Laboratories, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

September 30,

December 31,

2020

2019

(Unaudited)Current assets:Cash and cash equivalents$

840,325

$

660,672

Short-term investments319,662

459,533

Accounts receivable, net402,241

392,672

Inventories, net640,228

554,007

Other current assets121,405

113,271

Total current assets2,323,861

2,180,155

Property, plant and equipment, net480,949

499,339

Operating lease right-of-use assets196,652

201,868

Goodwill, net291,916

264,131

Purchased intangibles, net205,305

145,525

Other investments8,439,897

4,638,205

Other assets82,351

79,636

Total assets$

12,020,931

$

8,008,859

Current liabilities:Accounts payable, accrued payroll and employee benefits$

323,085

$

287,098

Current maturities of long-term debt426,636

426,172

Income and other taxes payable41,646

36,285

Other current liabilities195,290

155,940

Total current liabilities986,657

905,495

Long-term debt, net of current maturities12,241

13,579

Other long-term liabilities2,196,888

1,334,728

Total liabilities3,195,786

2,253,802

Total stockholders' equity8,825,145

5,755,057

Total liabilities and stockholders' equity$

12,020,931

$

8,008,859

Bio-Rad Laboratories, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

September December 30, 31,

2020 2019

(Unaudited)Current assets:Cash and cash equivalents $ 840,325 $ 660,672

Short-term investments 319,662 459,533

Accounts receivable, net 402,241 392,672

Inventories, net 640,228 554,007

Other current assets 121,405 113,271

Total current assets 2,323,861 2,180,155

Property, plant and equipment, net 480,949 499,339

Operating lease right-of-use assets 196,652 201,868

Goodwill, net 291,916 264,131

Purchased intangibles, net 205,305 145,525

Other investments 8,439,897 4,638,205

Other assets 82,351 79,636

Total assets $ 12,020,931 $ 8,008,859

Current liabilities:Accounts payable, accrued payroll and employee $ 323,085 $ 287,098benefitsCurrent maturities of long-term debt 426,636 426,172

Income and other taxes payable 41,646 36,285

Other current liabilities 195,290 155,940

Total current liabilities 986,657 905,495

Long-term debt, net of current maturities 12,241 13,579

Other long-term liabilities 2,196,888 1,334,728

Total liabilities 3,195,786 2,253,802

Total stockholders' equity 8,825,145 5,755,057

Total liabilities and stockholders' equity $ 12,020,931 $ 8,008,859

Bio-Rad Laboratories, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Nine Months EndedSeptember 30,2020

2019

Cash flows from operating activities:Cash received from customers$

1,741,431

$

1,716,486

Cash paid to suppliers and employees(1,406,427

)

(1,392,653

)

Interest paid, net(11,066

)

(11,381

)

Income tax payments, net(51,539

)

(42,634

)

Other operating activities18,195

28,277

Net cash provided by operating activities290,594

298,095

Cash flows from investing activities:Payments for acquisitions(96,655

)

(75,811

)

Other investing activities86,514

(71,882

)

Net cash used in investing activities(10,141

)

(147,693

)

Cash flows from financing activities:Payments on long-term borrowings(1,780

)

(487

)

Other financing activities(99,377

)

(17,488

)

Net cash used in financing activities(101,157

)

(17,975

)

Effect of foreign exchange rate changes on cash3,154

(3,239

)

Net increase in cash, cash equivalents, and restricted cash182,450

129,188

Cash, cash equivalents, and restricted cash at beginning of period662,651

434,164

Cash, cash equivalents, and restricted cash at end of period$

845,101

$

563,352

Reconciliation of net income to net cash provided by operating activities:Net income$

2,967,165

$

1,205,189

Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization101,938

99,757

Reduction in the carrying amount of right-of-use assets27,694

31,108

Changes in working capital(44,360

)

8,861

Other(2,761,843

)

(1,046,820

)

Net cash provided by operating activities$

290,594

$

298,095

Bio-Rad Laboratories, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Nine Months Ended September 30, 2020 2019

Cash flows from operating activities:Cash received from customers $ 1,741,431 $ 1,716,486

Cash paid to suppliers and employees (1,406,427 ) (1,392,653 )

Interest paid, net (11,066 ) (11,381 )

Income tax payments, net (51,539 ) (42,634 )

Other operating activities 18,195 28,277

Net cash provided by operating activities 290,594 298,095

Cash flows from investing activities:Payments for acquisitions (96,655 ) (75,811 )

Other investing activities 86,514 (71,882 )

Net cash used in investing activities (10,141 ) (147,693 )

Cash flows from financing activities:Payments on long-term borrowings (1,780 ) (487 )

Other financing activities (99,377 ) (17,488 )

Net cash used in financing activities (101,157 ) (17,975 )

Effect of foreign exchange rate changes on cash 3,154 (3,239 )

Net increase in cash, cash equivalents, and 182,450 129,188 restricted cashCash, cash equivalents, and restricted cash at 662,651 434,164 beginning of periodCash, cash equivalents, and restricted cash at $ 845,101 $ 563,352 end of period Reconciliation of net income to net cashprovided by operating activities:Net income $ 2,967,165 $ 1,205,189

Adjustments to reconcile net income to net cashprovided by operating activities:Depreciation and amortization 101,938 99,757

Reduction in the carrying amount of 27,694 31,108 right-of-use assetsChanges in working capital (44,360 ) 8,861

Other (2,761,843 ) (1,046,820 )

Net cash provided by operating activities $ 290,594 $ 298,095

Bio-Rad Laboratories, Inc.Reconciliation of GAAP financial measures to non-GAAP financial measures(In thousands, except per share data)(Unaudited)In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including non-GAAP net income and non-GAAP diluted income per share (non-GAAP EPS), which exclude amortization of acquisition-related intangible assets; certain acquisition-related expenses and benefits; restructuring charges; asset impairment charges; valuation changes of equity-owned securities; gains and losses on equity-method investments; and significant legal-related charges or benefits and associated legal costs. Non-GAAP net income and non-GAAP EPS also exclude certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability, tax provisions/benefits related to the previous items, and significant discrete tax events. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods.We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operation of our business. We believe that disclosing non-GAAP financial measures provides useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. We also believe that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.Three Months Ended

Three Months Ended

Nine Months Ended

Nine Months Ended

September 30,

% of

September 30,

% of

September 30,

% of

September 30,

% of

2020

revenue

2019

revenue

2020

revenue

2019

revenue

GAAP cost of goods sold$

279,952

$

253,607

$

778,120

$

760,674

Amortization of purchased intangibles(4,841

)

(3,944

)

(13,700

)

(11,366

)

Acquisition related benefits (costs) (1)-

-

-

7,403

Restructuring benefits (costs)237

(3,243

)

1,705

(3,051

)

Non-GAAP cost of goods sold$

275,348

$

246,420

$

766,125

$

753,660

GAAP gross profit$

367,311

56.7

%

$

307,026

54.8

%

$

977,667

55.7

%

$

926,557

54.9

%

Amortization of purchased intangibles4,841

3,944

13,700

11,366

Acquisition related (benefits) costs (1)-

-

-

(7,403

)

Restructuring (benefits) costs(237

)

3,243

(1,705

)

3,051

Non-GAAP gross profit$

371,915

57.5

%

$

314,213

56.0

%

$

989,662

56.4

%

$

933,571

55.3

%

GAAP selling, general and administrative expense$

198,165

$

201,622

$

581,119

$

610,460

Amortization of purchased intangibles(2,322

)

(1,865

)

(6,557

)

(5,124

)

Legal matters(5,977

)

1,900

(10,395

)

(4,593

)

Acquisition related benefits (costs) (1)(165

)

(6

)

837

359

Restructuring benefits (costs)815

(2,662

)

(1,992

)

(2,802

)

Non-GAAP selling, general and administrative expense$

190,516

$

198,989

$

563,012

$

598,300

GAAP research and development expense$

59,546

$

47,944

$

160,833

$

145,641

Restructuring benefits (costs)59

(23

)

1,114

104

Non-GAAP research and development expense$

59,605

$

47,921

$

161,947

$

145,745

GAAP income from operations$

109,600

16.9

%

$

57,460

10.2

%

$

235,715

13.4

%

$

170,456

10.1

%

Amortization of purchased intangibles7,163

5,809

20,257

16,490

Legal matters5,977

(1,900

)

10,395

4,593

Acquisition related (benefits) costs (1)165

6

(837

)

(7,762

)

Restructuring (benefits) costs(1,111

)

5,928

(827

)

5,749

Non-GAAP income from operations$

121,794

18.8

%

$

67,303

12.0

%

$

264,703

15.1

%

$

189,526

11.2

%

GAAP change in fair market value of equity securities$

(1,580,350

)

$

390,620

$

(3,591,509

)

$

(1,384,999

)

Valuation (loss) gain on equity-owned securities1,580,350

(390,620

)

3,591,509

1,384,999

Non-GAAP change in fair market value of equity securities$

-

$

-

$

-

$

-

GAAP other (income) expense, net$

(1,015

)

$

(4,367

)

$

(21,517

)

$

(26,959

)

(Loss) gain on equity-method investments(183

)

(37

)

(2,634

)

(698

)

Other non-recurring items (2)-

-

11,680

759

Non-GAAP other (income) expense, net$

(1,198

)

$

(4,404

)

$

(12,471

)

$

(26,898

)

GAAP income (loss) before income taxes$

1,684,461

$

(335,216

)

$

3,829,105

$

1,561,651

Amortization of purchased intangibles7,163

5,809

20,257

16,490

Legal matters5,977

(1,900

)

10,395

4,593

Acquisition related (benefits) costs (1)165

6

(837

)

(7,762

)

Restructuring (benefits) costs(1,111

)

5,928

(827

)

5,749

Valuation loss (gain) on equity-owned securities(1,580,350

)

390,620

(3,591,509

)

(1,384,999

)

Loss (gain) on equity-method investments183

37

2,634

698

Other non-recurring items (2)-

-

(11,680

)

(759

)

Non-GAAP income before income taxes$

116,488

$

65,284

$

257,538

$

195,661

GAAP (provision for) benefit from income taxes$

(369,637

)

$

76,400

$

(861,940

)

$

(356,462

)

Income tax effect of non-GAAP adjustments (3)343,401

(93,040

)

800,631

303,890

Non-GAAP provision for income taxes$

(26,236

)

$

(16,640

)

$

(61,309

)

$

(52,572

)

GAAP net income (loss)$

1,314,824

203.1

%

$

(258,816

)

-46.2

%

$

2,967,165

169.0

%

$

1,205,189

71.4

%

Amortization of purchased intangibles7,163

5,809

20,257

16,490

Legal matters5,977

(1,900

)

10,395

4,593

Acquisition related (benefits) costs (1)165

6

(837

)

(7,762

)

Restructuring (benefits) costs(1,111

)

5,928

(827

)

5,749

Valuation loss (gain) on equity-owned securities(1,580,350

)

390,620

(3,591,509

)

(1,384,999

)

Loss (gain) on equity-method investments183

37

2,634

698

Other non-recurring items (2)-

-

(11,680

)

(759

)

Income tax effect of non-GAAP adjustments (3)343,401

(93,040

)

800,631

303,890

Non-GAAP net income$

90,252

13.9

%

$

48,644

8.7

%

$

196,229

11.2

%

$

143,089

8.5

%

GAAP diluted income (loss) per share$

43.64

$

(8.68

)

$

98.46

$

39.97

Amortization of purchased intangibles0.24

0.19

0.67

0.55

Legal matters0.20

(0.06

)

0.34

0.15

Acquisition related (benefits) costs (1)0.01

-

(0.03

)

(0.26

)

Restructuring (benefits) costs(0.04

)

0.20

(0.03

)

0.19

Valuation loss (gain) on equity-owned securities(52.45

)

12.94

(119.17

)

(45.94

)

Loss (gain) on equity-method investments0.01

-

0.09

0.02

Other non-recurring items (2)-

-

(0.39

)

(0.03

)

Income tax effect of non-GAAP adjustments (3)11.39

(3.09

)

26.57

10.10

Add back anti-dilutive shares-

0.11

-

-

Non-GAAP diluted income per share$

3.00

$

1.61

$

6.51

$

4.75

GAAP diluted weighted average shares used in per share calculation30,128

29,831

30,137

30,149

Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive-

358

-

-

Non-GAAP diluted weighted average shares used in per share calculation30,128

30,189

30,137

30,149

Bio-Rad Laboratories, Inc.Reconciliation of GAAP financial measures to non-GAAP financial measures(In thousands, except per share data)(Unaudited) In addition to the financial measures prepared in accordance with generallyaccepted accounting principles (GAAP), we use certain non-GAAP financialmeasures, including non-GAAP net income and non-GAAP diluted income per share(non-GAAP EPS), which exclude amortization of acquisition-related intangibleassets; certain acquisition-related expenses and benefits; restructuringcharges; asset impairment charges; valuation changes of equity-ownedsecurities; gains and losses on equity-method investments; and significantlegal-related charges or benefits and associated legal costs. Non-GAAP netincome and non-GAAP EPS also exclude certain other gains and losses that areeither isolated or cannot be expected to occur again with any predictability,tax provisions/benefits related to the previous items, and significant discretetax events. We exclude the above items because they are outside of our normaloperations and/or, in certain cases, are difficult to forecast accurately forfuture periods.We utilize a number of different financial measures, both GAAP and non-GAAP, inanalyzing and assessing the overall performance of our business, in makingoperating decisions, forecasting and planning for future periods, anddetermining payments under compensation programs. We consider the use of thenon-GAAP measures to be helpful in assessing the performance of the ongoingoperation of our business. We believe that disclosing non-GAAP financialmeasures provides useful supplemental data that, while not a substitute forfinancial measures prepared in accordance with GAAP, allows for greatertransparency in the review of our financial and operational performance. Wealso believe that disclosing non-GAAP financial measures provides usefulinformation to investors and others in understanding and evaluating ouroperating results and future prospects in the same manner as management and incomparing financial results across accounting periods and to those of peercompanies. Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended

September 30, % of September % of September 30, % of September 30, % of 30,

2020 revenue 2019 revenue 2020 revenue 2019 revenue

GAAP cost of $ 279,952 $ 253,607 $ 778,120 $ 760,674 goods soldAmortization (4,841 ) (3,944 ) (13,700 ) (11,366 )of purchasedintangiblesAcquisitionrelated - - - 7,403 benefits(costs) (1)Restructuring 237 (3,243 ) 1,705 (3,051 )benefits(costs)Non-GAAP cost $ 275,348 $ 246,420 $ 766,125 $ 753,660 of goods sold GAAP gross $ 367,311 56.7 % $ 307,026 54.8 % $ 977,667 55.7 % $ 926,557 54.9 %profitAmortization 4,841 3,944 13,700 11,366 of purchasedintangiblesAcquisitionrelated - - - (7,403 )(benefits)costs (1)Restructuring (237 ) 3,243 (1,705 ) 3,051 (benefits)costsNon-GAAP gross $ 371,915 57.5 % $ 314,213 56.0 % $ 989,662 56.4 % $ 933,571 55.3 %profit GAAP selling,general and $ 198,165 $ 201,622 $ 581,119 $ 610,460 administrativeexpenseAmortization (2,322 ) (1,865 ) (6,557 ) (5,124 )of purchasedintangiblesLegal matters (5,977 ) 1,900 (10,395 ) (4,593 )

Acquisitionrelated (165 ) (6 ) 837 359 benefits(costs) (1)Restructuring 815 (2,662 ) (1,992 ) (2,802 )benefits(costs)Non-GAAPselling, $ 190,516 $ 198,989 $ 563,012 $ 598,300 general andadministrativeexpense GAAP researchand $ 59,546 $ 47,944 $ 160,833 $ 145,641 developmentexpenseRestructuring 59 (23 ) 1,114 104 benefits(costs)Non-GAAPresearch and $ 59,605 $ 47,921 $ 161,947 $ 145,745 developmentexpense GAAP income $ 109,600 16.9 % $ 57,460 10.2 % $ 235,715 13.4 % $ 170,456 10.1 %fromoperationsAmortization 7,163 5,809 20,257 16,490 of purchasedintangiblesLegal matters 5,977 (1,900 ) 10,395 4,593

Acquisitionrelated 165 6 (837 ) (7,762 )(benefits)costs (1)Restructuring (1,111 ) 5,928 (827 ) 5,749 (benefits)costsNon-GAAP $ 121,794 18.8 % $ 67,303 12.0 % $ 264,703 15.1 % $ 189,526 11.2 %income fromoperations GAAP change infair market $ (1,580,350 ) $ 390,620 $ (3,591,509 ) $ (1,384,999 )value ofequitysecuritiesValuation(loss) gain on 1,580,350 (390,620 ) 3,591,509 1,384,999 equity-ownedsecuritiesNon-GAAPchange in fair $ - $ - $ - $ - market valueof equitysecurities GAAP other $ (1,015 ) $ (4,367 ) $ (21,517 ) $ (26,959 )(income)expense, net(Loss) gain on (183 ) (37 ) (2,634 ) (698 )equity-methodinvestmentsOther - - 11,680 759 non-recurringitems (2)Non-GAAP other $ (1,198 ) $ (4,404 ) $ (12,471 ) $ (26,898 )(income)expense, net GAAP income $ 1,684,461 $ (335,216 ) $ 3,829,105 $ 1,561,651 (loss) beforeincome taxesAmortization 7,163 5,809 20,257 16,490 of purchasedintangiblesLegal matters 5,977 (1,900 ) 10,395 4,593

Acquisitionrelated 165 6 (837 ) (7,762 )(benefits)costs (1)Restructuring (1,111 ) 5,928 (827 ) 5,749 (benefits)costsValuation loss(gain) on (1,580,350 ) 390,620 (3,591,509 ) (1,384,999 )equity-ownedsecuritiesLoss (gain) on 183 37 2,634 698 equity-methodinvestmentsOther - - (11,680 ) (759 )non-recurringitems (2)Non-GAAP $ 116,488 $ 65,284 $ 257,538 $ 195,661 income beforeincome taxes GAAP(provision $ (369,637 ) $ 76,400 $ (861,940 ) $ (356,462 )for) benefitfrom incometaxesIncome taxeffect of 343,401 (93,040 ) 800,631 303,890 non-GAAPadjustments(3)Non-GAAP $ (26,236 ) $ (16,640 ) $ (61,309 ) $ (52,572 )provision forincome taxes GAAP net $ 1,314,824 203.1 % $ (258,816 ) -46.2 % $ 2,967,165 169.0 % $ 1,205,189 71.4 %income (loss)Amortization 7,163 5,809 20,257 16,490 of purchasedintangiblesLegal matters 5,977 (1,900 ) 10,395 4,593

Acquisitionrelated 165 6 (837 ) (7,762 )(benefits)costs (1)Restructuring (1,111 ) 5,928 (827 ) 5,749 (benefits)costsValuation loss(gain) on (1,580,350 ) 390,620 (3,591,509 ) (1,384,999 )equity-ownedsecuritiesLoss (gain) on 183 37 2,634 698 equity-methodinvestmentsOther - - (11,680 ) (759 )non-recurringitems (2)Income taxeffect of 343,401 (93,040 ) 800,631 303,890 non-GAAPadjustments(3)Non-GAAP net $ 90,252 13.9 % $ 48,644 8.7 % $ 196,229 11.2 % $ 143,089 8.5 %income GAAP diluted $ 43.64 $ (8.68 ) $ 98.46 $ 39.97 income (loss)per shareAmortization 0.24 0.19 0.67 0.55 of purchasedintangiblesLegal matters 0.20 (0.06 ) 0.34 0.15

Acquisitionrelated 0.01 - (0.03 ) (0.26 )(benefits)costs (1)Restructuring (0.04 ) 0.20 (0.03 ) 0.19 (benefits)costsValuation loss(gain) on (52.45 ) 12.94 (119.17 ) (45.94 )equity-ownedsecuritiesLoss (gain) on 0.01 - 0.09 0.02 equity-methodinvestmentsOther - - (0.39 ) (0.03 )non-recurringitems (2)Income taxeffect of 11.39 (3.09 ) 26.57 10.10 non-GAAPadjustments(3)Add back - 0.11 - - anti-dilutivesharesNon-GAAP $ 3.00 $ 1.61 $ 6.51 $ 4.75 diluted incomeper share GAAP dilutedweightedaverage shares 30,128 29,831 30,137 30,149 used in persharecalculationSharesincluded innon-GAAP netincome pershare, but - 358 - - excluded fromGAAP net lossper share asthey wouldhave beenanti-dilutiveNon-GAAPdilutedweighted 30,128 30,189 30,137 30,149 average sharesused in persharecalculation(1)

Release of contingent consideration and other acquisition-related (benefits) expenses.

(2)

Gain on the sale of a division (2020) and gain on the sale of a product line (2019).

(3)

Excluded items identified in the reconciliation schedule are tax effected by application of a non-GAAP effective tax rate. The non-GAAP tax provision is adjusted for items, the nature of which and/or tax jurisdiction requires the application of a specific tax rate or treatment.

2020 Financial Outlook

Forecasted non-GAAP operating margin excludes 108 basis points related to amortization of purchased intangibles. Forecasted non-GAAP operating margin does not reflect future gains and charges that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance, such as foreign currency fluctuations, future gains or losses associated with certain legal matters, acquisitions and restructuring activities.

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CONTACT: Investor Contact: Kevin Han, Senior Director Investor Relations 510-741-6777 ir@bio-rad.com

CONTACT: Media Contact: Tina Cuccia, Manager Corporate Communications 510-741-6063 tina_cuccia@bio-rad.com