.</b>" data-reactid="70"> 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 investments; 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 |
Three Months |
Year Ended | Year Ended | |||||||||||||||||||||||||
| December 31, |
% of |
December 31, |
% of |
December 31, |
% of |
December 31, |
% of |
|||||||||||||||||||||
| 2018 | revenue | 2017 | revenue | 2018 | revenue | 2017 | revenue | |||||||||||||||||||||
| GAAP cost of goods sold | $ | 283,765 | $ | 276,038 | $ | 1,065,747 | $ | 972,450 | ||||||||||||||||||||
| Amortization of purchased intangibles | (4,239 | ) | (4,855 | ) | (18,491 | ) | (21,933 | ) | ||||||||||||||||||||
| Legal matters | - | 11,013 | - | 11,013 | ||||||||||||||||||||||||
| Acquisition related benefits (costs) (1) | - | - | - | (10,000 | ) | |||||||||||||||||||||||
| Restructuring costs | (5,144 | ) | (2,377 | ) | (7,028 | ) | (2,377 | ) | ||||||||||||||||||||
| Non-GAAP cost of goods sold | $ | 274,382 | $ | 279,819 | $ | 1,040,228 | $ | 949,153 | ||||||||||||||||||||
| GAAP gross profit | $ | 333,776 | 54.0 | % | $ | 345,257 | 55.6 | % | $ | 1,224,362 | 53.5 | % | $ | 1,187,703 | 55.0 | % | ||||||||||||
| Amortization of purchased intangibles | 4,239 | 4,855 | 18,491 | 21,933 | ||||||||||||||||||||||||
| Legal matters | - | (11,013 | ) | - | (11,013 | ) | ||||||||||||||||||||||
| Acquisition related (benefits) costs (1) | - | - | - | 10,000 | ||||||||||||||||||||||||
| Restructuring costs | 5,144 | 2,377 | 7,028 | 2,377 | ||||||||||||||||||||||||
| Non-GAAP gross profit | $ | 343,159 | 55.6 | % | $ | 341,476 | 55.0 | % | $ | 1,249,881 | 54.6 | % | $ | 1,211,000 | 56.1 | % | ||||||||||||
| GAAP selling, general and administrative expense | $ | 212,543 | $ | 201,730 | $ | 833,294 | $ | 806,790 | ||||||||||||||||||||
| Amortization of purchased intangibles | (1,777 | ) | (2,074 | ) | (7,704 | ) | (7,936 | ) | ||||||||||||||||||||
| Legal matters | (8,654 | ) | (695 | ) | (21,863 | ) | (4,275 | ) | ||||||||||||||||||||
| Acquisition related benefits (costs) (2) | 127 | 6,400 | 3,501 | 20,124 | ||||||||||||||||||||||||
| Restructuring costs | (421 | ) | (6,903 | ) | (855 | ) | (8,519 | ) | ||||||||||||||||||||
| Non-GAAP selling, general and administrative expense | $ | 201,818 | $ | 198,458 | $ | 806,373 | $ | 806,184 | ||||||||||||||||||||
| GAAP research and development expense | $ | 53,074 | $ | 76,041 | $ | 199,196 | $ | 250,157 | ||||||||||||||||||||
| Acquisition related benefits (costs) (2) | - | (5,488 | ) | (512 | ) | (20,014 | ) | |||||||||||||||||||||
| Restructuring costs | (1,336 | ) | (15,878 | ) | (496 | ) | (23,472 | ) | ||||||||||||||||||||
| Non-GAAP research and development expense | $ | 51,738 | $ | 54,675 | $ | 198,188 | $ | 206,671 | ||||||||||||||||||||
| GAAP impairment losses on goodwill and long-lived assets | $ | 300,513 | $ | 11,506 | $ | 300,513 | $ | 11,506 | ||||||||||||||||||||
| Goodwill and long-lived assets impairment | (300,513 | ) | (11,506 | ) | (300,513 | ) | (11,506 | ) | ||||||||||||||||||||
| Non-GAAP impairment losses on goodwill and long-lived assets | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||
| GAAP (loss) income from operations | $ | (232,354 | ) | -37.6 | % | $ | 55,980 | 9.0 | % | $ | (108,641 | ) | -4.7 | % | $ | 119,250 | 5.5 | % | ||||||||||
| Amortization of purchased intangibles | 6,016 | 6,929 | 26,195 | 29,869 | ||||||||||||||||||||||||
| Legal matters | 8,654 | (10,318 | ) | 21,863 | (6,738 | ) | ||||||||||||||||||||||
| Acquisition related (benefits) costs (1) (2) | (127 | ) | (912 | ) | (2,989 | ) | 9,890 | |||||||||||||||||||||
| Restructuring costs | 6,901 | 25,158 | 8,379 | 34,368 | ||||||||||||||||||||||||
| Goodwill and long-lived assets impairment | 300,513 | 11,506 | 300,513 | 11,506 | ||||||||||||||||||||||||
| Non-GAAP income from operations | $ | 89,603 | 14.5 | % | $ | 88,343 | 14.2 | % | $ | 245,320 | 10.7 | % | $ | 198,145 | 9.2 | % | ||||||||||||
| GAAP change in fair market value of equity securities | $ | 814,109 | $ | - | $ | (606,230 | ) | $ | - | |||||||||||||||||||
| Valuation change in equity-owned securities (3) | (814,109 | ) | - | 606,230 | - | |||||||||||||||||||||||
| Non-GAAP change in fair market value of equity securities | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||
| GAAP other (income) expense, net | $ | (7,005 | ) | $ | 2,789 | $ | (36,593 | ) | $ | (10,697 | ) | |||||||||||||||||
| (Loss) gain on equity-method investments | (66 | ) | 260 | (691 | ) | (35 | ) | |||||||||||||||||||||
| Other non-recurring items (4) | - | (6,501 | ) | 9,208 | (6,501 | ) | ||||||||||||||||||||||
| Non-GAAP other (income) expense, net | $ | (7,071 | ) | $ | (3,452 | ) | $ | (28,076 | ) | $ | (17,233 | ) | ||||||||||||||||
| GAAP (loss) income before income taxes | $ | (1,046,547 | ) | $ | 45,950 | $ | 507,359 | $ | 97,805 | |||||||||||||||||||
| Amortization of purchased intangibles | 6,016 | 6,929 | 26,195 | 29,869 | ||||||||||||||||||||||||
| Legal matters | 8,654 | (10,318 | ) | 21,863 | (6,738 | ) | ||||||||||||||||||||||
| Acquisition related (benefits) costs (1) (2) | (127 | ) | (912 | ) | (2,989 | ) | 9,890 | |||||||||||||||||||||
| Restructuring costs | 6,901 | 25,158 | 8,379 | 34,368 | ||||||||||||||||||||||||
| Goodwill and long-lived assets impairment | 300,513 | 11,506 | 300,513 | 11,506 | ||||||||||||||||||||||||
| Valuation change in equity-owned securities (3) | 814,109 | - | (606,230 | ) | - | |||||||||||||||||||||||
| Loss (gain) on equity-method investments | 66 | (260 | ) | 691 | 35 | |||||||||||||||||||||||
| Other non-recurring items (4) | - | 6,501 | (9,208 | ) | 6,501 | |||||||||||||||||||||||
| Non-GAAP income before income taxes | $ | 89,585 | $ | 84,554 | $ | 246,573 | $ | 183,236 | ||||||||||||||||||||
| GAAP benefit (provision) for income taxes | $ | 213,400 | $ | 36,784 | $ | (146,363 | ) | $ | 24,444 | |||||||||||||||||||
| Income tax effect of non-GAAP adjustments (5) | (238,809 | ) | (64,067 | ) | 76,467 | (80,723 | ) | |||||||||||||||||||||
| Non-GAAP provision for income taxes | $ | (25,409 | ) | $ | (27,283 | ) | $ | (69,896 | ) | $ | (56,279 | ) | ||||||||||||||||
| GAAP net (loss) income | $ | (833,147 | ) | -134.9 | % | $ | 82,734 | 13.3 | % | $ | 360,996 | 15.8 | % | $ | 122,249 | 5.7 | % | |||||||||||
| Amortization of purchased intangibles | 6,016 | 6,929 | 26,195 | 29,869 | ||||||||||||||||||||||||
| Legal matters | 8,654 | (10,318 | ) | 21,863 | (6,738 | ) | ||||||||||||||||||||||
| Acquisition related (benefit) costs (1) (2) | (127 | ) | (912 | ) | (2,989 | ) | 9,890 | |||||||||||||||||||||
| Restructuring costs | 6,901 | 25,158 | 8,379 | 34,368 | ||||||||||||||||||||||||
| Goodwill and long-lived assets impairment | 300,513 | 11,506 | 300,513 | 11,506 | ||||||||||||||||||||||||
| Valuation change in equity-owned securities (3) | 814,109 | - | (606,230 | ) | - | |||||||||||||||||||||||
| Loss (gain) on equity-method investments | 66 | (260 | ) | 691 | 35 | |||||||||||||||||||||||
| Other non-recurring items (4) | - | 6,501 | (9,208 | ) | 6,501 | |||||||||||||||||||||||
| Income tax effect of non-GAAP adjustments (5) | (238,809 | ) | (64,067 | ) | 76,467 | (80,723 | ) | |||||||||||||||||||||
| Non-GAAP net income | $ | 64,176 | 10.4 | % | $ | 57,271 | 9.2 | % | $ | 176,677 | 7.7 | % | $ | 126,957 | 5.9 | % | ||||||||||||
| GAAP diluted (loss) income per share | $ | (27.88 | ) | $ | 2.75 | $ | 11.94 | $ | 4.07 | |||||||||||||||||||
| Amortization of purchased intangibles | 0.20 | 0.23 | 0.87 | 0.99 | ||||||||||||||||||||||||
| Legal matters | 0.29 | (0.34 | ) | 0.72 | (0.22 | ) | ||||||||||||||||||||||
| Acquisition related (benefits) costs (1) (2) | - | (0.03 | ) | (0.10 | ) | 0.33 | ||||||||||||||||||||||
| Restructuring costs | 0.23 | 0.84 | 0.28 | 1.14 | ||||||||||||||||||||||||
| Goodwill and long-lived assets impairment | 9.96 | 0.38 | 9.94 | 0.38 | ||||||||||||||||||||||||
| Valuation change in equity-owned securities (3) | 26.99 | - | (20.06 | ) | - | |||||||||||||||||||||||
| Loss (gain) on equity-method investments | - | (0.01 | ) | 0.02 | - | |||||||||||||||||||||||
| Other non-recurring items (4) | - | 0.22 | (0.30 | ) | 0.22 | |||||||||||||||||||||||
| Income tax effect of non-GAAP adjustments (5) | (7.92 | ) | (2.14 | ) | 2.53 | (2.68 | ) | |||||||||||||||||||||
| Add back anti-dilutive shares | 0.26 | - | - | - | ||||||||||||||||||||||||
| Non-GAAP diluted income per share | $ | 2.13 | $ | 1.90 | $ | 5.84 | $ | 4.23 | ||||||||||||||||||||
| GAAP diluted weighted average shares used in per share calculation | 29,878 | 30,108 | 30,228 | 30,034 | ||||||||||||||||||||||||
| Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive | 287 | - | - | - | ||||||||||||||||||||||||
| Non-GAAP diluted weighted average shares used in per share calculation | 30,165 | 30,108 | 30,228 | 30,034 | ||||||||||||||||||||||||
| (1) One-time expense associated with the February 2017 acquisition of RainDance Technologies, Inc. | ||||||||||||||||||||||||||||
| (2) Release of contingent consideration and other acquisition-related expense | ||||||||||||||||||||||||||||
| (3) Mark-to-market gain on equity-owned securities | ||||||||||||||||||||||||||||
| (4) Gain on the sale of land and a product line, and impairment loss on investments | ||||||||||||||||||||||||||||
|
(5) 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. |
||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
2019 Financial Outlook
Forecasted non-GAAP operating margin excludes 80 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190228006019/en/