Financial Performance - Net sales for Q2 2024 were $638.5 million, a decrease of 6.3% from $681.1 million in Q2 2023, with a currency neutral decrease of approximately 5.4%[110] - Net sales for the first six months of 2024 were $1.25 billion, an 8.0% decrease from $1.36 billion in the first six months of 2023[117] - Life Science segment sales for Q2 2024 were $250.5 million, down 16.5% year-over-year, driven by ongoing weakness in the biotech and biopharma markets[110] - Life Science segment sales for the first six months of 2024 were $492.2 million, down 21.1% year-over-year, with a currency neutral decrease of 20.8%[117] - Clinical Diagnostics segment sales for Q2 2024 were $387.9 million, an increase of 2.1% year-over-year, with a currency neutral increase of 3.2%[111] - Clinical Diagnostics segment sales for the first six months of 2024 were $756.6 million, an increase of 3.3% year-over-year, with a currency neutral increase of 4.0%[118] Expenses and Margins - Consolidated gross margin for Q2 2024 was 55.6%, up from 53.2% in Q2 2023, driven by cost control measures and product mix[112] - Selling, general and administrative (SG&A) expense for Q2 2024 was $194.7 million, or 30.5% of sales, compared to $207.8 million, or 30.5% of sales in Q2 2023[113] - Research and development (R&D) expense for Q2 2024 was $58.9 million, or 9.2% of sales, down from $65.0 million, or 9.5% of sales in Q2 2023[113] Cash Flow and Investments - Net cash provided by operations decreased to $167.4 million for the six months ended June 30, 2024, down from $196.2 million in 2023, primarily due to lower cash received from customers and higher income tax paid[125] - Net cash used in investing activities increased to $74.0 million for the six months ended June 30, 2024, compared to $42.5 million in 2023, driven by higher capital expenditures and the timing of marketable securities transactions[126] - Net cash used in financing activities decreased to $96.6 million for the six months ended June 30, 2024, from $198.4 million in 2023, mainly due to lower treasury stock purchases[127] Share Repurchase and Stock Activity - During Q2 2024, the company repurchased 346,226 shares of Class A common stock for $100 million under the 2023 Share Repurchase Program, with $174.0 million remaining available for future repurchases[128] - The board of directors authorized an increase in the 2023 Share Repurchase Program by an additional $500 million for repurchasing outstanding common stock[128] - The company reissued 21,017 shares of Class A treasury stock at a total cost of $7.4 million during Q2 2024 to fulfill employee grants[128] Market Risk and Accounting - There were no material changes in market risk disclosures compared to the previous annual report for the year ended December 31, 2023[133] - The company did not adopt any new accounting pronouncements during the three and six months ended June 30, 2024[132] Losses - Losses from change in fair market value of equity securities and loan receivable were $2.90 billion in Q2 2024, compared to $1.60 billion in Q2 2023[115]

Financial Performance - Total net sales for Q2 2024 were $638.5 million, a decrease of 6.3% compared to $681.1 million in Q2 2023[1] - Life Science segment net sales decreased by 16.5% to $250.5 million, primarily due to weakness in biotech and biopharma markets[2] - Clinical Diagnostics segment net sales increased by 2.1% to $387.9 million, driven by demand for quality control and blood typing products[2] - The company reported a net loss of $2,165.5 million, or $76.26 per share, compared to a net loss of $1,162.3 million, or $39.59 per share, in the same period last year[5] - Non-GAAP net income for Q2 2024 was $88.5 million, or $3.11 per share, compared to $88.5 million, or $3.00 per share, in Q2 2023[6] - The company expects non-GAAP revenue to decline by approximately 2.5% to 4.0% for the full year 2024, a revision from previous growth estimates of 1.0% to 2.5%[7] - Non-GAAP operating margin is estimated to be about 12.0% to 13.0%, down from prior estimates of 13.5% to 14.0%[7] Gross Margin and Profitability - Gross margin for Q2 2024 was 55.6%, up from 53.2% in Q2 2023[5] - GAAP gross profit for the quarter was $355,119 million, representing a gross margin of 55.6%[31] - Non-GAAP gross profit was $360,206 million, with a gross margin of 56.4%[31] - GAAP income from operations was $101,496 million, with an operating margin of 15.9%[34] - Non-GAAP income from operations reached $107,058 million, reflecting an operating margin of 16.8%[34] - Adjusted EBITDA reached $138,208, showing a growth of 21.6% compared to the prior year[35] Expenses and Liabilities - Research and development expenses for Q2 2024 were $58,904 thousand, a decrease of 9.5% from $65,042 thousand in Q2 2023[24] - Total liabilities decreased to $2,909,659 thousand as of June 30, 2024, down from $3,557,937 thousand at the end of 2023[26] - The company incurred restructuring costs of $1,421 million during the period[31] - Non-GAAP selling, general and administrative expenses were $193,780 million[31] Cash Flow and Equity - Cash provided by operating activities for Q2 2024 was $167,438 thousand, a decrease from $196,185 thousand in Q2 2023[28] - The company reported a net cash increase of $3,346 thousand for Q2 2024, compared to a decrease of $(44,063) thousand in Q2 2023[28] - Total stockholders' equity decreased to $6,778,787 thousand as of June 30, 2024, from $8,741,133 thousand at the end of 2023[26] Tax and Share Repurchase - The effective tax rate for Q2 2024 was 22.3%, slightly down from 22.5% in Q2 2023[3] - The board authorized an increase of $500 million to the 2023 Share Repurchase Program, bringing the total available for repurchases to approximately $578 million[8] Non-GAAP Measures - The company utilizes non-GAAP financial measures to provide additional insights into its operational performance, excluding certain non-recurring items[29] - The company does not provide a reconciliation of non-GAAP financial expectations to GAAP measures due to the unpredictable nature of future charges[37] - The forecasted non-GAAP operating margin excludes 89 basis points related to amortization of purchased intangibles[37] Market and Foreign Exchange - The company experienced a foreign currency exchange loss of $(1,699) during the reporting period[35] - The company experienced a significant loss from changes in fair market value of equity securities amounting to $2,895,355 million[34] - Gains from changes in fair market value of equity securities and loan receivable amounting to $2,895,355[35] Share Metrics - The weighted average shares used in the non-GAAP net income per share calculation were 28,395, compared to 29,355 in the previous period[35] - The diluted loss per share was reported at $(76.26), a significant increase from $(39.59) in the previous period[35]

Financial Performance - Net sales for Q1 2024 were $610.8 million, a decrease of 9.8% compared to $676.8 million in Q1 2023[124] - Life Science segment sales decreased by 25.3% to $241.7 million in Q1 2024, driven by weakness in biotech and biopharma markets[124] - Clinical Diagnostics segment sales increased by 4.7% to $368.6 million in Q1 2024, primarily due to increased demand for quality controls and blood typing[125] - Consolidated gross margin for Q1 2024 was 53.4%, slightly down from 53.5% in Q1 2023[126] Expenses - Selling, general and administrative (SG&A) expenses were $214.9 million, or 35.2% of sales, compared to $225.6 million, or 33.3% of sales in Q1 2023[127] - Research and development (R&D) expenses were $66.4 million, or 10.9% of sales, down from $75.0 million, or 11.1% of sales in Q1 2023[128] Cash Flow and Investments - Net cash provided by operations was $69.8 million for Q1 2024, down from $98.1 million in Q1 2023[138] - Cash and short-term investments totaled $1.65 billion as of March 31, 2024, with approximately 16% held in foreign subsidiaries[135] Tax and Gains - The effective income tax rate increased to 21.8% in Q1 2024 from 18.7% in Q1 2023, influenced by geographical mix of earnings[133] - Gains from changes in fair market value of equity securities were $422.2 million in Q1 2024, compared to a loss of $17.5 million in Q1 2023[131]

Financial Performance - First-quarter 2024 total net sales were $610.8 million, a decrease of 9.8% compared to $676.8 million in Q1 2023[2] - Clinical Diagnostics segment net sales increased by 4.7% to $368.6 million, driven by demand for quality control, blood typing, and diabetes products[3] - Life Science segment net sales decreased by 25.3% to $241.7 million, primarily due to weakness in the biotech and biopharma markets[25] - Non-GAAP net income for Q1 2024 was $65.2 million, or $2.29 per share, down from $99.4 million, or $3.34 per share in Q1 2023[8] - The company reported a net income of $383.9 million for Q1 2024, significantly higher than $69.0 million in Q1 2023, primarily due to changes in the fair market value of equity securities[27] - GAAP net income for the current period is $383,916, representing a 62.9% increase compared to $68,962 in the previous period[45] - Non-GAAP net income is reported at $65,217, which is a 10.7% increase from $99,360 in the previous period[45] - Total net sales decreased to $610,820 from $676,844, reflecting a decline of approximately 9.8%[53] Expenses and Margins - Cost of goods sold (GAAP) decreased to $284,854 from $314,427, a reduction of about 9.4%[53] - Research and development expenses decreased to $66,375 from $74,951, a decline of approximately 11.6%[53] - Non-GAAP income from operations is $59,007, which is 9.7% of total revenue, compared to $84,167 or 12.4% in the previous period[45] - GAAP diluted earnings per share is $13.45, up from $2.32 in the previous period[53] - Adjusted EBITDA for the current period is $108,535, representing 17.8% of total revenue, compared to $148,541 or 21.9% in the previous period[46] - Non-GAAP gross margin for Q1 2024 was 54.2%, unchanged from Q1 2023[28] - GAAP gross profit for Q1 2024 was $325,966, accounting for 53.4% of revenue, compared to $362,417 or 53.5% in Q1 2023[56] - Non-GAAP gross profit for Q1 2024 was $330,932, maintaining 54.2% of revenue, consistent with Q1 2023[56] Tax and Financial Outlook - The effective tax rate for Q1 2024 was 21.8%, compared to 18.7% in Q1 2023, influenced by the accounting treatment of equity securities[5] - The company maintains its full-year 2024 financial outlook, expecting non-GAAP, currency-neutral revenue growth of approximately 1.0% to 2.5%[11] - Management expressed cautious optimism about a gradual recovery in the biopharma market in the second half of the year[28] - The financial outlook for 2024 indicates a focus on maintaining operational efficiency and exploring new market opportunities[60] Assets and Liabilities - Total current assets increased to $3,060,936 from $3,048,330, representing a growth of 0.3%[54] - Total liabilities remained stable at $3,558,759, slightly up from $3,557,937[54] - Cash, cash equivalents, and restricted cash at the end of the period were $433,752, down from $464,503[55] - The company’s total stockholders' equity increased to $9,051,134 from $8,741,133, reflecting a growth of 3.5%[54] - The company utilized $406,458 for purchases of marketable securities and investments, compared to $203,588 in the previous year[55] Operational Performance - Income from operations for Q1 2024 was $59.0 million, down from $84.2 million in the prior-year period[29] - The company incurred a loss of $422,177 from changes in the fair market value of equity securities and loan receivables[45] - The forecasted non-GAAP operating margin excludes 87 basis points related to amortization of purchased intangibles[47] - Net cash provided by operating activities decreased to $69,792 from $98,119, a decline of 29.0% year-over-year[55]

Financial Performance - For the year ended December 31, 2023, net sales were $1.18 billion, a decrease of 12.5% compared to 2022, with a currency neutral sales decrease of 12.0% primarily in Asia Pacific and EMEA [147]. - The net loss for 2023 was $23.9 million, significantly improved from a net loss of $129.5 million in 2022 [116]. - The company reported a net loss of $637.324 million for the year ended December 31, 2023 [183]. - The company reported a net loss of $637.3 million for 2023, compared to a net loss of $3.63 billion in 2022 [211]. - Comprehensive loss for 2023 was $506.5 million, compared to a comprehensive loss of $3.92 billion in 2022 [211]. - Cash received from customers for 2023 was $2,684.2 million, a slight decrease of 0.6% from $2,699.4 million in 2022 [238]. - Net cash provided by operating activities increased significantly to $374.9 million from $194.4 million in 2022 [238]. Cost and Expenses - Gross profit margin for 2023 was 53.4%, down from 55.9% in 2022, while cost of goods sold increased to 46.6% from 44.1% [116]. - Research and development expenses were 9.3% of net sales in 2023, slightly up from 9.2% in 2022 [116]. - Research and development expenses for 2023 were $247.4 million, slightly down from $256.9 million in 2022 [209]. - Interest expense increased to $49.4 million in 2023 from $38.1 million in 2022, primarily due to the issuance of $1.2 billion Senior Notes in March 2022 [120]. - Cash used in financing activities was $425.6 million in 2023, compared to cash provided of $973.6 million in 2022, primarily due to higher share repurchase payments [188]. - The total cash paid to suppliers and employees decreased to $2,240.5 million in 2023 from $2,408.0 million in 2022, a reduction of 7.0% [238]. Assets and Liabilities - Total current assets decreased from $3,157.976 million in 2022 to $3,048.330 million in 2023, a decline of approximately 3.4% [174]. - Cash and cash equivalents decreased from $434.215 million in 2022 to $403.815 million in 2023, a decline of about 7.0% [174]. - Short-term investments decreased from $1,356.457 million in 2022 to $1,203.327 million in 2023, a decline of approximately 11.3% [174]. - Inventory increased from $719.316 million in 2022 to $780.517 million in 2023, an increase of about 8.5% [174]. - Total assets decreased from $13,501.666 million in 2022 to $12,299.070 million in 2023, a decline of approximately 8.9% [174]. - Long-term debt, including the current portion, totaled $1,210.1 million, with $401.0 million due in 3-5 years and $807.6 million due in more than 5 years [158]. - The total liabilities as of December 31, 2023, were $3.56 billion, a decrease from $3.89 billion in 2022 [207]. - Long-term debt as of December 31, 2023, was $1,199.1 million, slightly up from $1,197.7 million in 2022 [255]. Taxation - The effective income tax rate may see a decrease in previously unrecognized tax benefits by approximately $17.2 million within the next twelve months [123]. - The effective income tax rates for the years ended December 31, 2023, 2022, and 2021 were 25.0%, 22.9%, and 21.9%, respectively, primarily driven by unrealized gains/losses in equity securities [228]. - The company recorded a current tax expense of $103.2 million for the year ended December 31, 2023, compared to $157.0 million in 2022 [226]. - The total unrecognized tax benefits as of December 31, 2023, were $84.7 million, with accrued interest and penalties amounting to $9.6 million [237]. - The company is currently under examination by various tax authorities, including U.S. federal and state agencies, for tax years 2012 and forward [235]. - The company does not anticipate that the Inflation Reduction Act will have a material impact on its income tax provision and cash taxes [226]. Investments and Financing - Cash provided by investing activities was $20.2 million in 2023, a significant improvement compared to cash used of $1,207.6 million in 2022 [126]. - The company has no outstanding borrowings under its $200 million unsecured revolving credit facility as of December 31, 2023 [124]. - The company had $208.0 million available for borrowing under domestic and international lines of credit as of December 31, 2023 [255]. - Issued $400 million in Senior Notes due 2027 at an effective rate of 3.5346% and $800 million in Senior Notes due 2032 at an effective rate of 3.8429% [257]. - The principal amount of the loan to Sartorius-Herbst Beteiligungen II Gmbh is €400 million, due on January 31, 2029 [281]. - The interest rate on the loan to Sartorius-Herbst Beteiligungen II Gmbh is 1.5% per annum, with interest payable annually in arrears [279]. Equity and Stock - Total stockholders' equity decreased from $9,615.252 million in 2022 to $8,741.133 million in 2023, a decline of approximately 9.1% [183]. - The company’s total stockholders' equity decreased to $8.74 billion in 2023 from $9.62 billion in 2022 [207]. - Share repurchase activity for the year ended December 31, 2023, included a total carrying value of $1,199.1 million for senior notes [278]. - The total balance of Class B shares increased to 5,096 thousand as of December 31, 2023, reflecting ongoing conversions and issuances [276]. Goodwill and Intangible Assets - Goodwill as of December 31, 2023, totaled $748.8 million, with a net goodwill of $413.6 million after accumulated impairment losses of $335.2 million [283]. - The company reported a total of $765.3 million in purchased intangible assets, with a net carrying amount of $320.5 million after accumulated amortization of $444.8 million [285]. - The company conducted a quantitative assessment of goodwill in Q4 2023, concluding that the fair value of reporting units exceeded carrying amounts, indicating no impairment [295]. - The accumulated impairment losses and write-offs for goodwill included $41.8 million for Life Science and $293.4 million for Clinical Diagnostics [283]. - The company recognized no impairments of finite-lived intangible assets for the years ended December 31, 2023, 2022, and 2021 [293]. - The company’s total finite-lived intangible assets amounted to $567.1 million, with a net carrying amount of $122.3 million after accumulated amortization [285].

Financial Performance - Net sales for Q3 2023 were $632.1 million, a decrease of 7.1% from $680.8 million in Q3 2022[207] - For the first nine months of 2023, net sales were $1.99 billion, a decrease of 4.0% from $2.07 billion in the same period of 2022[214] - Life Science segment sales for the first nine months of 2023 were $887.3 million, a decrease of 10.1% year-over-year, with a currency neutral sales decrease of 9.0%[246] - Clinical Diagnostics segment sales for the first nine months of 2023 were $1.10 billion, an increase of 1.7% year-over-year, with a currency neutral sales increase of 2.8%[247] Expenses - SG&A expenses for Q3 2023 were $201.2 million, representing 31.8% of sales, compared to $211.1 million or 31.0% of sales in Q3 2022[209] - R&D expenses for Q3 2023 were $43.5 million, or 6.9% of sales, down from $66.8 million or 9.8% of sales in Q3 2022[240] - Research and development expenses for the first nine months of 2023 decreased to $183.5 million, representing 9.2% of sales, compared to $190.7 million in the same period of 2022[248] - Interest expense for Q3 2023 was $12.4 million, an increase from $11.7 million in Q3 2022, primarily due to $1.2 billion Senior Notes[211] - Interest expense for the first nine months of 2023 was $37.1 million, an increase of $10.6 million from $26.4 million in the same period of 2022[249] Gross Margins - Consolidated gross margins for Q3 2023 were 53.1%, down from 54.7% in Q3 2022, primarily due to product mix and higher material costs[239] - Consolidated gross margins for the first nine months of 2023 were 53.3%, down from 56.5% in the same period of 2022[247] Other Income and Expenses - Other income for the first nine months of 2023 was $87.4 million, up from $42.4 million in the same period of 2022, driven by increased interest and investment income[218] - Other income, net for Q3 2023 increased to $20.4 million from $3.1 million in Q3 2022, primarily due to increased interest and investment income[243] - Foreign currency exchange gains for Q3 2023 were $1.7 million, compared to losses of $4.4 million in Q3 2022[242] - Losses from changes in fair market value of equity securities were $1.58 billion for the first nine months of 2023, compared to $6.17 billion in the same period of 2022[250] Cash Flow and Financing - Net cash used in financing activities was $225.0 million for the nine months ended September 30, 2023, compared to cash provided of $1,060.2 million in the same period of 2022[255] - The board authorized a new share repurchase program of up to $500 million in July 2023[224] - As of September 30, 2023, $478.7 million remained available for repurchases under the Share Repurchase Program[256]

Financial Performance - Life Science segment sales for Q2 2023 were $300.2 million, a decrease of 6.9% year-over-year, with a currency neutral sales decrease of 5.8%[98] - Net sales for Q2 2023 were $681.1 million, a decrease of 1.4% from $691.1 million in Q2 2022, with COVID-related sales dropping from approximately $33.2 million to $0.4 million[125] - Clinical Diagnostics segment sales for Q2 2023 were $380.1 million, an increase of 3.3% compared to Q2 2022, with a currency neutral increase of 4.6% driven by demand for quality controls and diagnostic testing systems[126] - Life Science segment sales for the first half of 2023 were $623.8 million, a decrease of 6.8% year-over-year, with a currency neutral sales decrease of 4.7%[106] - Net sales for the Life Science segment in the six months ended June 30, 2023, were $623.8 million, a decrease from $669.5 million in the same period of 2022, representing a decline of approximately 6.5%[199] - Clinical Diagnostics segment net sales for the six months ended June 30, 2023, were $732.2 million, down from $719.5 million in 2022, indicating a decrease of about 1.0%[199] Expenses and Margins - Consolidated gross margins for Q2 2023 were 53.2%, down from 57.2% in Q2 2022, primarily due to product mix and higher material costs[99] - Gross profit margin for the first half of 2023 was 53.4%, down from 57.3% in the first half of 2022, primarily due to product mix and increased production costs[133] - Research and development (R&D) expenses for Q2 2023 were $65.0 million, representing 9.5% of sales, consistent with $64.3 million or 9.3% of sales in Q2 2022[100] - Research and development expenses increased to $140.0 million, or 10.3% of sales, in the first half of 2023, compared to $123.9 million, or 8.9% of sales, in the first half of 2022[134] - Selling, general and administrative (SG&A) expenses increased to $433.4 million or 31.9% of sales for the first half of 2023, compared to $404.5 million or 29.1% of sales in the same period of 2022[108] - Selling, general and administrative expenses were $207.8 million, or 30.5% of sales, in Q2 2023, compared to 30.1% in Q2 2022, reflecting increased restructuring costs[127] Cash Flow and Investments - Net cash used in investing activities for the first half of 2023 was $42.5 million, a significant decrease from $1,060.6 million in the same period of 2022[113] - Net cash provided by operations for the six months ended June 30, 2023, was $196.2 million, up from $103.8 million in the same period of 2022, attributed to lower income tax paid and higher cash received from customers[139] - Net cash provided by operating activities for the six months ended June 30, 2023, was $196.2 million, compared to $103.8 million for the same period in 2022, indicating an increase of 89.0%[171] - Net cash used in financing activities was $198.4 million for the six months ended June 30, 2023, compared to cash provided of $1,069.0 million in the same period of 2022, indicating a significant decrease in financing activities[201] Tax and Losses - The effective income tax rate for the first half of 2023 was 22.8%, slightly down from 23.2% in the same period of 2022, influenced by an unrealized loss in equity securities[110] - The effective income tax rate for Q2 2023 was 22.5%, down from 24.2% in Q2 2022, primarily affected by an unrealized loss in equity securities[130] - The effective income tax rate for the three months ended June 30, 2023, was 22.5%, down from 24.2% for the same period in 2022[151] - The company reported a consolidated loss before income taxes of $(1,500.4) million for the three months ended June 30, 2023, compared to $(1,220.2) million for the same period in 2022[158] - Losses from changes in fair market value of equity securities and loan receivable were $1.60 billion in Q2 2023, compared to $1.34 billion in Q2 2022, primarily due to holding losses on Sartorius AG[129] - Losses from changes in fair market value of equity securities and loan receivable were $1.61 billion for the first half of 2023, significantly lower than $5.88 billion for the first half of 2022[161] - The company reported a net loss of $1,093.3 million for the six months ended June 30, 2023, compared to a net loss of $4,292.5 million for the same period in 2022[171] Share Repurchase and Stock - The company completed the repurchase of $650 million of stock under its share repurchase program[90] - During Q2 2023, the company repurchased 549,863 shares of Class A common stock for $207.4 million under its Share Repurchase Program[203] - The board of directors authorized a new share repurchase program in July 2023, allowing the company to repurchase up to $500 million of its outstanding common stock[204] - The company incurred a loss of $44,000 upon reissuing 17,428 shares of Class A treasury stock at a lower price than their average cost during Q2 2023[202] - In Q2 2022, the company repurchased 255,284 shares of Class A common stock for $125.0 million, with $98.1 million remaining available for repurchases as of June 30, 2022[205] - As of June 30, 2023, the company had designated repurchased shares as treasury stock[203] Market Risks - The company is exposed to foreign currency exchange fluctuations, which could materially affect its results of operations and financial condition[195] - Changes in the market value of the company's position in Sartorius AG could significantly impact its consolidated statements of income and financial statements[196] - There have been no material changes in market risk disclosures from the previous Annual Report for the year ended December 31, 2022[207] Management and Controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the period covered by the Quarterly Report[209]

Sales Performance - Life Science segment sales for Q1 2023 were $323.6 million, a decrease of 6.8% year-over-year, with a currency neutral decrease of 3.6%[149] - Clinical Diagnostics segment sales for Q1 2023 were $352.1 million, an increase of 0.1% year-over-year, with a currency neutral increase of 2.8%[150] - COVID-related sales in Q1 2023 were $2.3 million, significantly down from approximately $44.2 million in Q1 2022[149] Profitability and Expenses - Gross profit margin decreased to 53.5% in Q1 2023 from 57.5% in Q1 2022, while cost of goods sold increased to 46.5% from 42.5%[146] - Selling, general and administrative expenses rose to $225.6 million, representing 33.3% of sales, compared to $196.7 million or 28.1% of sales in the prior year[151] - Interest expense for Q1 2023 was $12.3 million, up from $4.0 million in Q1 2022, mainly due to interest accrued on $1.2 billion Senior Notes[152] Cash Flow and Investments - Net cash provided by operations increased to $98.1 million in Q1 2023 from $50.5 million in Q1 2022, driven by higher cash received from customers[157] - Net cash used in investing activities decreased to $70.5 million in Q1 2023 from $916.1 million in Q1 2022, primarily due to the purchase of marketable securities[158] Taxation - Effective income tax rate improved to 18.7% in Q1 2023 from 22.9% in Q1 2022, influenced by benefits from preferential tax rates related to export sales[154] Debt and Borrowings - The company had no outstanding borrowings under the 2019 Credit Agreement as of March 31, 2023, with $0.2 million utilized for domestic standby letters of credit[156]

Sales and Revenue - In 2022, approximately 41% of consolidated net sales were derived from the United States, while 59% came from international locations, with Europe being the largest international region [370]. - Net sales for 2022 were reported at 100% compared to 2021, with a gross profit margin of 55.9% in 2022, slightly down from 56.1% in 2021 [403]. - Consolidated net sales for the year ended December 31, 2022 were $2.80 billion, a decrease of 4.1% from $2.92 billion in 2021, with COVID-related sales dropping from approximately $265.7 million in 2021 to $109.2 million in 2022 [406]. - Life Science segment sales for the year ended December 31, 2022 were $1.35 billion, a decrease of 3.8% compared to 2021, but a currency neutral sales increase of 0.3% was noted [404]. - Clinical Diagnostics segment sales for the year ended December 31, 2022 were $1.45 billion, a decrease of 4.3% compared to 2021, with a currency neutral sales increase of 0.4% [404]. Expenses and Profitability - The cost of goods sold increased to 44.1% in 2022 from 43.9% in 2021, indicating a rise in production costs [403]. - Research and development expenses rose to 9.2% of net sales in 2022, compared to 8.9% in 2021, reflecting increased investment in innovation [403]. - The net loss for 2022 was reported at $(129.5) million, a significant decline from a net income of $145.6 million in 2021 [403]. - Selling, general and administrative expenses (SG&A) decreased to $827.8 million or 29.5% of sales for the year ended December 31, 2022, down from $877.1 million or 30.0% of sales in 2021 [409]. - Research and development (R&D) expenses for the year ended December 31, 2022 were $256.9 million or 9.2% of sales, a slight decrease from $260.6 million or 8.9% of sales in 2021 [410]. Acquisitions and Strategic Initiatives - The company acquired Curiosity Diagnostics for a total consideration of $137.1 million, which includes contingent consideration of up to $70.0 million based on certain milestones [377]. - The strategic acquisition of Curiosity Diagnostics is expected to enhance the company's Clinical Diagnostics product offerings and facilitate entry into the molecular disease testing market [378]. Cash Flow and Financing - The issuance of Senior Notes in March 2022 raised $1.2 billion, with net cash proceeds of $395.7 million for the 2027 Notes and $790.5 million for the 2032 Notes [380]. - Net cash provided by operations was $194.4 million for the year ended December 31, 2022, a decrease of $475.1 million from $669.5 million in 2021 [446]. - Net cash used in investing activities was $1,207.6 million for the year ended December 31, 2022, compared to $797.4 million in 2021, an increase of $410.2 million [450]. - Net cash provided by financing activities was $973.6 million for the year ended December 31, 2022, compared to cash used of $55.4 million in 2021 [452]. Supply Chain and Operational Challenges - The company experienced delays and shortages in the supply of certain components and raw materials due to COVID-19, leading to a backlog of sales orders [376]. - The company anticipates normalizing the backlog of sales orders during 2023 as supply chain issues improve [376]. Market and Currency Impact - Foreign currency exchange net gains were $0.2 million for the year ended December 31, 2022, compared to net losses of $2.8 million in 2021 [413]. - A hypothetical 10% depreciation/appreciation of foreign currencies relative to the U.S. dollar would result in an unrealized gain/loss of $43.5 million on the company's derivative position as of December 31, 2022 [478]. - A 10% change in the market value of the company's investment in Sartorius would result in an approximate loss/gain of $0.85 billion reported in the financial statements for the year ended December 31, 2022 [480]. - The company manages foreign currency exposures through operational means and foreign currency forward contracts [477]. Debt and Interest - Interest expense increased significantly to $38.1 million for the year ended December 31, 2022, compared to $1.6 million in 2021, primarily due to the issuance of $1.2 billion Senior Notes in March 2022 [412]. - The company's total long-term debt, including current portion, was $1,210.6 million, with $400.9 million due in 3-5 years and $808.2 million due in more than 5 years [470]. - Interest payments totaled $335.2 million, with $43.6 million due in less than one year [470]. - The company has no significant interest rate risk associated with its debt instruments, as most are fixed-rate [479].

Part I [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the nine months ended September 30, 2022, highlighting a significant decrease in total assets and a net loss primarily due to unrealized losses on equity investments [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The company's financial position as of September 30, 2022, shows total assets decreased to $12.1 billion, a net loss of $4.46 billion, and significantly reduced operating cash flow, primarily due to equity investment losses Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 (Unaudited) | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$12,058,462** | **$17,775,795** | | Total current assets | $3,140,155 | $1,989,088 | | Other investments | $7,459,169 | $14,387,006 | | **Total Liabilities** | **$3,604,857** | **$4,108,661** | | **Total Stockholders' Equity** | **$8,453,605** | **$13,667,134** | Condensed Consolidated Statements of Income (Loss) Highlights (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net sales | $2,071,961 | $2,189,776 | | Gross profit | $1,173,333 | $1,239,660 | | Income from operations | $356,436 | $382,448 | | (Gains) losses from change in fair market value of equity securities | $6,172,306 | $(7,078,753) | | **Net income (loss)** | **$(4,461,029)** | **$5,819,561** | | **Diluted earnings (loss) per share** | **$(149.60)** | **$192.76** | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $104,027 | $498,597 | | Net cash used in investing activities | $(1,138,278) | $(229,954) | | Net cash provided by (used in) financing activities | $1,060,195 | $(60,064) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail significant events including the acquisition of Curiosity Diagnostics, a $6.0 billion unrealized loss on the Sartorius AG investment, issuance of $1.2 billion in senior notes, and ongoing European restructuring efforts - On August 3, 2022, the company acquired Curiosity Diagnostics for a total consideration of **$137.1 million**, including **$36.1 million** in potential contingent payments, to facilitate entry into the molecular disease testing market[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - The company's investment in Sartorius AG experienced a significant decline in value, resulting in a **$6.00 billion loss** in fair market value for the nine months ended September 30, 2022[69](index=69&type=chunk)[70](index=70&type=chunk) - In March 2022, the company issued **$1.2 billion** in senior notes, consisting of **$400.0 million** due in 2027 (3.3% interest) and **$800.0 million** due in 2032 (3.7% interest)[90](index=90&type=chunk)[91](index=91&type=chunk) Segment Net Sales (in millions) | Segment | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Life Science | $987.5 | $1,074.2 | | Clinical Diagnostics | $1,081.4 | $1,111.0 | - The company's European restructuring plan, initiated in February 2021, is expected to be substantially complete by mid-2023, with total incurred expenses of **$69.0 million** and a remaining liability of **$36.4 million** through September 30, 2022[111](index=111&type=chunk)[112](index=112&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 5.4% decrease in net sales for the first nine months of 2022, driven by lower COVID-related sales and currency impacts, with a net loss primarily from equity security revaluation and reduced operating cash flow Net Sales Performance (Q3 2022 vs Q3 2021) | Metric | Q3 2022 | Q3 2021 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $680.8 million | $747.0 million | -8.9% | | COVID-related Sales | $17.2 million | $57.1 million | -69.9% | | Currency Neutral Sales | - | - | -4.1% | Net Sales Performance (Nine Months 2022 vs Nine Months 2021) | Metric | 9M 2022 | 9M 2021 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $2.07 billion | $2.19 billion | -5.4% | | COVID-related Sales | $95.7 million | $220.1 million | -56.5% | | Currency Neutral Sales | - | - | -1.5% | - Supply chain constraints and lockdowns in China negatively impacted sales, particularly instrument placements, causing a significant backlog of sales orders expected to continue through the remainder of 2022 and into 2023[133](index=133&type=chunk) - The change in fair market value of equity securities and a related loan receivable resulted in a **$6.17 billion loss** for the first nine months of 2022, compared to a **$7.08 billion gain** in the same period of 2021, primarily due to holding losses on the Sartorius AG position[164](index=164&type=chunk) - Net cash from operations decreased to **$104.0 million** for the first nine months of 2022 from **$498.6 million** in the prior year, due to lower cash receipts from customers and higher payments to suppliers and for taxes and interest[170](index=170&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes have occurred in the company's market risk disclosures since the Annual Report on Form 10-K for the year ended December 31, 2021 - There have been no material changes from the disclosures about market risk provided in the Annual Report on Form 10-K for the year ended December 31, 2021[181](index=181&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of September 30, 2022, the company's disclosure controls and procedures were effective at a reasonable assurance level[183](index=183&type=chunk) - No changes in internal control over financial reporting were identified during the quarter ended September 30, 2022, that have materially affected or are likely to materially affect internal controls[184](index=184&type=chunk) Part II – Other Information [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various ordinary course legal proceedings, which management does not expect to materially adversely affect its financial condition or results - The company is a party to various legal proceedings arising in the ordinary course of business, which are not expected to have a material adverse effect on its financial condition or results of operations[109](index=109&type=chunk)[185](index=185&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) Key risks include ongoing pandemic impacts on supply chains and demand, material changes in the Sartorius AG investment value, international operational complexities, regulatory compliance, and cybersecurity threats - The COVID-19 pandemic continues to pose risks, including decreased demand for some products, supply chain challenges causing significant order backlogs expected to last into 2023, and increased raw material and freight costs[188](index=188&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - Changes in the market value of the company's large equity position in Sartorius AG materially impact financial results and could lead to the company being deemed an "investment company" under the Investment Company Act of 1940[211](index=211&type=chunk)[213](index=213&type=chunk) - The company faces significant risks from its international operations, which account for **59% of net sales**, including foreign currency exchange fluctuations, complex foreign laws (e.g., FCPA, UK Bribery Act), and trade barriers[197](index=197&type=chunk)[198](index=198&type=chunk)[210](index=210&type=chunk) - The business is subject to substantial government regulation, including from the FDA and foreign counterparts like the EU IVDR, which could lead to product approval delays, recalls, or fines and increase compliance costs[229](index=229&type=chunk)[230](index=230&type=chunk)[233](index=233&type=chunk) - Cybersecurity threats, including data breaches and phishing schemes, and potential disruptions from the ongoing multi-year implementation of a new global ERP system, pose significant operational risks[205](index=205&type=chunk)[218](index=218&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) As of September 30, 2022, $298.1 million remained under the Share Repurchase Program, with no shares repurchased during the third quarter - The company's Share Repurchase Program had **$298.1 million** available for future repurchases as of September 30, 2022[268](index=268&type=chunk) - No shares were purchased under the publicly announced repurchase program during the three months ended September 30, 2022[269](index=269&type=chunk) [Other Information, Exhibits, and Signatures](index=60&type=section&id=Item%203-6%20%26%20Signatures) This section confirms no defaults or other material information under Item 5, lists exhibits including CEO and CFO certifications, and concludes with executive signatures dated October 28, 2022 - The company reported no defaults upon senior securities, no mine safety disclosures, and no other information required under Item 5[269](index=269&type=chunk)[270](index=270&type=chunk) - The report was signed and certified by Norman Schwartz (CEO) and Ilan Daskal (CFO) on October 28, 2022[275](index=275&type=chunk)