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Bio-Rad Q2 Revenues Fall 6 Percent on COVID-19 Impact

NEW YORK – Bio-Rad Laboratories reported Thursday after the close of the market that its second quarter revenues fell 6 percent year over year, primarily due to COVID-19 pandemic-related slowdowns.

For the three months ended June 30, 2020, Bio-Rad reported revenues of $536.9 million compared to $572.6 million a year ago, besting analysts' average estimate of $517.1 million.

On a currency-neutral basis, Q2 revenues decreased about 4 percent, the company said.

"As anticipated, sales during the second quarter were impacted by the coronavirus pandemic," Norman Schwartz, Bio-Rad president and CEO, said in a statement. "While sales of many of our core products across Life Science and Clinical Diagnostics were slow, sales of products associated with the coronavirus pandemic were robust and provided some counterbalance. Although the COVID-19 situation is still unpredictable, we remain focused on our core strategies."

Life Science segment revenues increased 19 percent in Q2 to $252.1 million, or 20 percent on a currency-neutral basis. Growth in this segment was primarily attributable to sales of PCR, Droplet Digital PCR, and process media products.

In a conference call recapping Bio-Rad's financial results, CFO Ilan Daskal noted that the company's "core PCR and Droplet Digital PCR product revenue increases were driven by strong demand for COVID-19-related products. Growth overall in the Life Science segment was offset by softer academic research demand."

Daskal further noted that COVID-19-related sales in the quarter were approximately $71 million, mostly from PCR instruments but also due to an uptick in demand for reagents and labware.

Clinical Diagnostics segment revenues, meanwhile, fell 21 percent to $283.2 million, or 19 percent on a currency-neutral basis. Bio-Rad said that sales in this segment decreased for all product lines.

During the quarter, Bio-Rad received Emergency Use Authorization from the US Food and Drug Administration for both its Droplet Digital PCR-based 2019-nCoV CDC ddPCR Triplex Probe Assay and its Platelia Total Ab immunoassay for SARS-CoV-2. During the earnings call, Annette Tumolo, executive VP and president of the Life Science group, said that the company is also continually evaluating whether it might make sense to develop a standard qPCR assay for SARS-CoV-2.

Net income in Q2 was $966.4 million, or $32.15 per share, compared to $598.8 million, or $19.86 per share a year ago. Net income for the second quarters of 2020 and 2019 were significantly and favorably impacted by the recognition of changes in the fair market value of equity securities of $1.18 billion and $716.4 million, respectively, primarily related to Bio-Rad's holdings in Sartorius.

On an adjusted basis, net income in Q2 was $1.61 per share, beating analysts' average estimate of $1.22 per share.

Bio-Rad's Q2 R&D spending rose 4 percent to $52 million compared to $50.1 million a year ago, while its SG&A expenses dropped 6 percent to $189.3 million from $201.3 million.

Bio-Rad exited the quarter with $607.6 million in cash and cash equivalents and $429.8 million in short-term investments.

When reporting first quarter results in May, Bio-Rad withdrew its previously issued annual guidance given the uncertainties regarding the duration and impact of the COVID-19 pandemic. On Thursday, the company said it currently believes that third quarter year-over-year currency-neutral sales may be flat to up 5 percent.