NEW YORK – Bio-Rad Laboratories said after the close of the market on Thursday that its fourth quarter revenues fell approximately 7 percent year over year due to declines in qPCR product revenue related to lower COVID-19 testing demand.
For the three months ended Dec. 31, 2021, the Hercules, California-based firm reported $732.8 million in revenues compared to $789.8 million in the year-ago period. On a currency-neutral basis, quarterly revenues also decreased approximately 7 percent year over year. On average, analysts had expected revenues of $732 million for the quarter.
"While year-over-year COVID-related sales declines cloud the picture, many of our markets in the life science segment are seeing continued strength from robust research and biopharma funding, while our clinical diagnostics business has benefited from a steady recovery from the pandemic," Norman Schwartz, Bio-Rad's president and CEO, said in a statement. "Like many others, supply chain constraints during the fourth quarter impacted our ability to fully meet customer demand," he added.
The firm's Q4 life science segment sales dropped 24 percent year over year to $326.6 million, or 23 percent on a currency-neutral basis. Bio-Rad attributed the decrease to lower qPCR product revenue due to the decline in COVID-19 related demand. Prior-year life science revenues also included $32 million in damages related to intellectual property litigation, Bio-Rad said.
The firm's clinical diagnostics segment revenues increased approximately 13 percent year over year in the quarter to $404.9 million. On a currency-neutral basis, segment sales increased 13 percent as well, which Bio-Rad attributed to recovery of routine testing.
On a call with investors following the earnings release, Andrew Last, Bio-Rad's chief operating officer, said the firm experienced "solid recovery" in most of its key global markets in the quarter "as well as an uptick in demand for COVID-related products driven by the explosive spread of the new Omicron variant."
Specifically, Ilan Daskal, Bio-Rad's CFO, said that the firm realized $46 million in COVID-related sales in the quarter.
However, Bio-Rad also continues to experience an increase in supply chain challenges "driven by the inconsistency of supply for key components, particularly electronic components and plastics," Last said, adding that the company also faced some logistics challenges toward the end of the year.
Daskal noted that the supply chain challenges impacted Q4 revenues by $30 million, of which the firm expects to recover $20 million in 2022. This impact was primarily on the life science business, largely related to inconsistent supply of electronic components, and Bio-Rad expects the challenges to continue through the first half of the year.
"We're generally getting signs that the component supply will come back more completely in Q2," Last said. "The big challenge, of course, is to retain the orders through that period — in some parts of the portfolio we can definitely do that, [but] in other areas, it's much harder," he added.
Bio-Rad's net loss for the quarter was $1.57 billion, or $52.59 per share, compared to a net income of $839.1 million, or $27.81 per share, in the year-ago period. On a non-GAAP basis, Q4 EPS was $3.21, above analysts' average expectation of $2.85. Net income for the fourth quarter of 2021 and 2020 was impacted by the recognition of changes in the fair market value of equity securities, primarily related to the holdings of Bio-Rad's investment in Sartorius AG.
The company's R&D spending during the recently completed quarter increased 6 percent year over year to $69.9 million from $65.8 million, while its SG&A costs were up 2 percent to $224.1 million from $219.1 million.
For full-year 2021, Bio-Rad's revenues were up 15 percent to $2.92 billion from $2.55 billion in 2020, above the consensus Wall Street estimate of $2.89 billion. On a currency-neutral basis, revenues grew 13 percent year over year, Bio-Rad said.
Life science segment sales were $1.4 billion in 2021, an increase of about 14 percent over $1.23 billion 2020. On a currency-neutral basis, sales in the segment grew 12 percent.
Full-year clinical diagnostics revenues were $1.52 billion, up 16 percent from $1.41 billion in 2020 and up 14 percent on a currency-neutral basis, Bio-Rad said.
Company highlights in 2021 included the launch of PREvalence ddPCR SARS-CoV-2 Wastewater Quantification Kit, a partnership with Seegene for the clinical development and commercialization of infectious disease molecular diagnostic products for the US market, a legal settlement with 10x Genomics, and the acquisition of Dropworks.
Bio-Rad's 2021 net income was $4.25 billion, or $140.56 per share, compared to $3.81 billion, or $126.20 per share, in 2020. Non-GAAP EPS was $15.66, above analysts' average estimate of $15.59.
The company's R&D spending was up 20 percent year over year to $271.7 million from $226.6 million. Its SG&A costs were up 10 percent to $879.6 million from $800.3 million.
Bio-Rad exited 2021 with $470.8 million in cash and cash equivalents and $404.7 million in short-term investments.
The company anticipates currency-neutral revenue growth of approximately 1 percent to 2 percent for 2022.