Part I – Financial Information Financial Statements This section presents unaudited condensed consolidated financial statements for Q2 2020, reporting net sales of $536.9 million, net income of $966.4 million, and total assets of $10.1 billion Condensed Consolidated Balance Sheet Highlights (As of June 30, 2020) | Account | June 30, 2020 (in thousands) | Dec 31, 2019 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $2,132,584 | $2,180,155 | | Other Investments | $6,703,039 | $4,638,205 | | Total Assets | $10,097,307 | $8,008,859 | | Total Current Liabilities | $926,895 | $905,495 | | Total Liabilities | $2,743,905 | $2,253,802 | | Total Stockholders' Equity | $7,353,402 | $5,755,057 | Condensed Consolidated Statement of Income Highlights | Metric (in thousands, except EPS) | Q2 2020 | Q2 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $536,880 | $572,619 | $1,108,524 | $1,126,598 | | Gross Profit | $292,988 | $307,769 | $610,356 | $619,531 | | Income from Operations | $51,742 | $56,390 | $126,115 | $112,996 | | Change in Fair Market Value of Equity Securities | $1,183,488 | $716,389 | $2,011,159 | $1,775,619 | | Net Income | $966,429 | $598,810 | $1,652,341 | $1,464,005 | | Diluted EPS | $32.15 | $19.86 | $54.84 | $48.60 | - Net cash provided by operating activities for the six months ended June 30, 2020, was $154.9 million, a decrease from $198.3 million in 2019, while net cash used in investing activities significantly increased to $101.0 million from $37.8 million due to acquisition payments1295 Notes to Condensed Consolidated Financial Statements These notes detail accounting policies and financial data, covering revenue recognition, the Celsee acquisition for $99.5 million, Informatics divestiture for $12.2 million, Sartorius AG investment, segment performance, restructuring, and debt obligations Revenue by Geographic Region (Six Months Ended June 30) | Region | 2020 (in millions) | 2019 (in millions) | | :--- | :--- | :--- | | Europe | $369.7 | $374.1 | | Asia | $240.4 | $233.7 | | United States | $434.9 | $448.2 | | Other | $63.5 | $70.6 | | Total Net Sales | $1,108.5 | $1,126.6 | - On April 1, 2020, the company acquired Celsee, Inc. for $99.5 million, including up to $60.0 million in contingent consideration, to complement Life Science product offerings4748 - In April 2020, the company sold its Informatics division for $12.2 million, resulting in an $11.7 million gain recorded in Other (income) expense, net58 - The company's investment in Sartorius AG, representing approximately 37% of voting shares, generated unrealized gains on equity securities of $1.18 billion for Q2 2020 and $2.01 billion for the first six months of 20206667 Segment Net Sales (in millions) | Segment | Q2 2020 | Q2 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Life Science | $252.1 | $212.4 | $479.2 | $428.1 | | Clinical Diagnostics | $283.2 | $357.1 | $623.4 | $691.1 | - In July 2020, the Board of Directors authorized an additional $200.0 million for the company's share repurchase program131 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q2 2020 financial performance, noting a 6.2% decrease in net sales to $536.9 million due to COVID-19's impact on Clinical Diagnostics, offset by an 18.7% increase in Life Science sales, and confirms sufficient liquidity to meet obligations including $425.0 million Senior Notes due December 2020 - The COVID-19 pandemic negatively impacted the Clinical Diagnostics segment but positively affected the Life Science segment due to increased demand for COVID-19 related products138151152 Q2 2020 vs. Q2 2019 Performance Summary | Metric | Q2 2020 (in millions) | Q2 2019 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $536.9 | $572.6 | -6.2% | | Life Science Sales | $252.1 | $212.4 | +18.7% | | Clinical Diagnostics Sales | $283.2 | $357.1 | -20.7% | | Gross Margin | 54.6% | 53.7% | +0.9 ppt | - The company's liquidity, including $1.03 billion in cash and equivalents, is deemed adequate to meet obligations, including $425.0 million in Senior Notes due December 2020173 - For the first six months of 2020, the company repurchased 291,941 shares for $100.0 million, a significant increase from $15.0 million in the prior year period182184 Quantitative and Qualitative Disclosures about Market Risk No material changes to market risk disclosures were reported for the six months ended June 30, 2020, compared to the Annual Report on Form 10-K - No material changes in market risk disclosures were reported for the six months ended June 30, 2020188 Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the reporting period190 - No material changes to internal control over financial reporting were identified during the second quarter of 2020191 Part II – Other Information Legal Proceedings The company is involved in various legal claims, which management believes will not materially affect its financial position or liquidity, though resolution could impact specific period operating results - The company is party to various legal proceedings, but does not expect a material adverse effect on its overall financial condition, and a reasonable estimate of potential liability is currently unavailable116192 Risk Factors This section outlines key risks including the COVID-19 pandemic's impact on demand and supply chains, intense competition, cybersecurity threats, reliance on international operations (61% of H1 2020 sales), Sartorius AG investment volatility, ERP system implementation challenges, and government regulation - The COVID-19 pandemic poses a significant risk, leading to overall product demand drops, supply chain challenges, and transportation difficulties193195196 - The company faces cybersecurity risks, including a December 2019 cyberattack, with potential breaches leading to information misappropriation and operational disruptions208210 - Financial results are materially affected by market value changes in the Sartorius AG investment, causing significant net income volatility unrelated to operational performance216217 - The multi-year implementation of a new global ERP system has caused, and may continue to cause, business disruptions including manufacturing, logistics, and invoicing delays221 - A significant majority of voting stock held by the Schwartz family allows them to control company matters and elect directors, potentially creating conflicts of interest283284 Unregistered Sales of Equity Securities and Use of Proceeds No shares were repurchased during Q2 2020, leaving $73.1 million available under the share repurchase program, with an additional $200.0 million authorized in July 2020 - No shares of common stock were repurchased during the three months ended June 30, 2020286288 - In July 2020, the Board of Directors increased the authorization for the Share Repurchase Program by an additional $200.0 million285 Exhibits This section lists exhibits filed with the Form 10-Q report, including CEO and CFO certifications and Inline XBRL financial data files - The exhibits filed with this report include CEO/CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101 series)291
Bio-Rad(BIO_B) - 2020 Q2 - Quarterly Report