Bio-Rad Reports Second-Quarter 2021 Financial Results

HERCULES, Calif.–()–Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb), a global leader of life science research and clinical diagnostic products, today announced financial results for the second quarter ended June 30, 2021.

Second-quarter 2021 net sales were $715.9 million, an increase of 33.4 percent compared to $536.9 million reported for the second quarter of 2020. On a currency-neutral basis, quarterly sales increased 27.5 percent compared to the same period in 2020. Second-quarter gross margin was 56.1 percent compared to 54.6 percent during the second quarter in 2020.

Life Science segment net sales for the second quarter of 2021 were $334.2 million, an increase of 32.6 percent compared to the same quarter last year. On a currency-neutral basis, sales increased 27.1 percent compared to the same period in 2020. Currency-neutral sales increased across nearly all life science research products but were primarily driven by growth in our Western Blotting, Droplet Digital PCR®, qPCR, and Process Media product lines. All regions experienced strong currency-neutral sales growth compared to the second quarter of 2020.

Clinical Diagnostics segment sales for the second quarter of 2021 were $380.2 million, an increase of 34.3 percent compared to the same period last year. On a currency-neutral basis, sales increased 28.0 percent compared to the second quarter in 2020. The currency-neutral sales increase was primarily driven by the ongoing recovery across product lines in all regions.

Income from operations during the second quarter of 2021 was $124.8 million versus $51.7 million during the same quarter last year.

Net income for the second quarter of 2021 was $914.1 million, or $30.32 per share, on a diluted basis, versus $966.4 million, or $32.15 per share, on a diluted basis, during the same period in 2020. Net income for the second 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 our investment in Sartorius AG. The effective tax rate for the second quarter of 2021 was 21.0 percent, compared to 22.4 percent for the same period in 2020. The tax rates for both periods were driven by the large unrealized gain in equity securities. In addition, the effective income tax rate for the second quarter of 2021 was lower also due to the release of certain tax reserves resulting from the lapse of certain statute of limitations.

Performance in the second quarter for both our Life Science and Clinical Diagnostics segments was strong and ahead of expectations,” said Norman Schwartz, Bio-Rad President and Chief Executive Officer. “We are pleased to see the gradual recovery in our end markets across the business and in all regions after the significant downturn last year with the onset of COVID-19. Although the pandemic is still somewhat unpredictable, we have adapted well to the constraints of COVID-19 and continue to make progress on our core strategies, while supporting our customers and ensuring the safety of our employees,” he said.

GAAP Results

 

Q2 2021

 

Q2 2020

Revenue (millions)

$715.9

 

$536.9

Gross margin

56.1%

 

54.6%

Operating margin

17.4%

 

9.6%

Net income (millions)

$914.1

 

$966.4

Income per diluted share

$30.32

 

$32.15

 

Non-GAAP Results

 

Q2 2021

 

Q2 2020

Gross margin

56.9%

 

55.5%

Operating margin

18.5%

 

11.8%

Net income (millions)

$106.6

 

$48.3

Income per diluted share

$3.54

 

$1.61

 

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this press release. Non-GAAP adjustments include amortization of purchased intangibles; acquisition-related expenses and benefits; restructuring, impairment charges and valuation changes in equity-owned securities; gains and losses on equity-method investments; significant litigation charges or benefits and legal costs; and discrete income tax events and the income tax effect on these non-GAAP adjustments.

Non-GAAP net income and non-GAAP diluted income per share (non-GAAP EPS) are non-GAAP measures that exclude certain items detailed later in this press release under the heading “Non-GAAP Reporting.”

Non-GAAP net income for the second quarter of 2021 was $106.6 million, or $3.54 per share, on a diluted basis, compared to $48.3 million, or $1.61 per share, on a diluted basis, during the same period in 2020.

The non-GAAP effective income tax rate for the second quarter of 2021 was 21.5 percent, compared to 23.8 percent for the same period in 2020. The lower rate in 2021 was driven by geographic mix of earnings.

The following table represents a reconciliation of Bio-Rad’s reported net income and diluted income per share to non-GAAP net income and non-GAAP diluted income per share for the three and six months ended June 30, 2021 and 2020:

 

(in thousands, except per share data)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2021

 

2020

 

2021

 

2020

 

GAAP net income

 

$

 

914,114

 

 

 

 

$

 

966,429

 

 

 

 

$

 

1,891,528

 

 

 

 

$

 

1,652,341

 

 

 

Amortization of purchased intangibles

 

6,995

 

 

 

7,239

 

 

 

13,935

 

 

 

13,094

 

 

Legal matters

 

8,761

 

 

 

2,585

 

 

 

12,640

 

 

 

4,418

 

 

Acquisition related benefits

 

(40

)

 

 

(955

)

 

 

(40

)

 

 

(1,002

)

 

Restructuring (benefits) costs

 

(7,781

)

 

 

2,652

 

 

 

67,784

 

 

 

284

 

 

Valuation gain on equity-owned securities

 

(1,030,691

)

 

 

(1,183,488

)

 

 

(2,210,094

)

 

 

(2,011,159

)

 

Loss on equity-method investments

 

1,840

 

 

 

1,138

 

 

 

3,680

 

 

 

2,451

 

 

Other non-recurring items

 

 

 

 

(11,680

)

 

 

 

 

 

(11,680

)

 

Income tax effect on non-GAAP adjustments

 

213,387

 

 

 

264,428

 

 

 

484,523

 

 

 

457,230

 

Non-GAAP net income

$

106,585

 

 

$

48,348

 

 

$

263,956

 

 

$

105,977

 

 

 

 

 

 

 

 

 

 

GAAP diluted income per share

$

30.32

 

$

32.15

 

$

62.70

 

$

54.84

 

 

Non-GAAP diluted income per share

$

3.54

 

$

1.61

 

$

8.75

 

$

3.52

 

On a reported basis, net sales for the first half of 2021 increased 30.1 percent to $1,442.7 million compared to $1,108.5 million for the same period in 2020. On a currency-neutral basis, net sales increased 25.4 percent.

Year-to-date net income for 2021 was $1,891.5 million, or $62.70 per share on a fully diluted basis, compared to $1,652.3 million, or $54.84 per share, respectively, during the same period in 2020. On a non-GAAP basis net income for the first two quarters of 2021 was $264.0 million, or $8.75 per share, compared to $106.0 million, or $3.52 per share, during the same period in 2020.

2021 Financial Outlook

For the full year 2021, the company has updated its guidance and now anticipates non-GAAP currency-neutral revenue growth between 10.0 to 10.5 percent and an estimated non-GAAP operating margin of approximately 19.0 percent. Management will discuss this outlook in greater detail on the second-quarter 2021 financial results conference call.

Use of Non-GAAP Reporting and Currency-Neutral

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 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 securities, 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, income 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. More specifically, management adjusts for the excluded items for the following reasons:

Amortization of purchased intangible assets: we do not acquire businesses and assets on a predictable cycle. The amount of purchase price allocated to purchased intangible assets and the term of amortization can vary significantly and are unique to each acquisition or purchase. We believe that excluding amortization of purchased intangible assets allows the users of our financial statements to better review and understand the historic and current results of our operations, and also facilitates comparisons to peer companies.

Acquisition-related expenses and benefits: we incur expenses or benefits with respect to certain items associated with our acquisitions, such as transaction costs, professional fees for assistance with the transaction; valuation or integration costs; changes in the fair value of contingent consideration, gain or loss on settlement of pre-existing relationships with the acquired entity; or adjustments to purchase price. We exclude such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of our on-going business.

Restructuring, impairment charges and valuation changes in equity-owned securities and gains and losses on equity-method investments: we incur restructuring and impairment charges on individual or groups of employed assets and charges and benefits arising from valuation changes in equity-owned securities and gains and losses on equity-method investments, which arise from unforeseen circumstances and/or often occur outside of the ordinary course of our on-going business. Although these events are reflected in our GAAP financials, these unique transactions may limit the comparability of our on-going operations with prior and future periods.

Significant litigation charges or benefits and legal costs: we may incur charges or benefits as well as legal costs in connection with litigation and other contingencies unrelated to our core operations. We exclude these charges or benefits, when significant, as well as legal costs associated with significant legal matters, because we do not believe they are reflective of on-going business and operating results.

Income tax expense: we estimate the tax effect of the excluded items identified above to determine a non-GAAP annual effective income tax rate applied to the pretax amount in order to calculate the non-GAAP provision for income taxes. We also adjust for items for which the nature and/or tax jurisdiction requires the application of a specific tax rate or treatment.

From time to time in the future, there may be other items excluded if we believe that doing so is consistent with the goal of providing useful information to investors and management.

Percentage sales growth in currency-neutral amounts are calculated by translating prior period sales in each local currency using the current period’s monthly average foreign exchange rates for that currency and comparing that to current period sales.

There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact on our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.

Conference Call and Webcast

Management will discuss second-quarter ended June 30, 2021 results in a conference call at 3 PM Pacific Time (6 PM Eastern Time) July 29, 2021. To listen, call 855-779-9068 within the U.S. or 631-485-4862 outside the U.S., passcode: 5382265. You may also listen to the conference call live via a webcast that is available on the “Investor Relations” section of our website under “Quarterly Results” at bio-rad.com. The webcast will be available for up to a year.

BIO-RAD and DROPLET DIGITAL PCR are trademarks of Bio-Rad Laboratories, Inc. in certain jurisdictions.

About Bio-Rad

Bio-Rad Laboratories, Inc. (NYSE: BIO and BIOb) is a global leader in developing, manufacturing, and marketing a broad range of innovative products for the life science research and clinical diagnostic markets. With a focus on quality and customer service for over 65 years, our products advance the discovery process and improve healthcare. Our customers are university and research institutions, hospitals, public health and commercial laboratories, biotechnology, pharmaceutical, as well as applied laboratories that include food safety and environmental quality. Founded in 1952, Bio-Rad is based in Hercules, California, and has a global network of operations with approximately 7,700 employees worldwide. Bio-Rad had revenues exceeding $2.5 billion in 2020. Please visit bio-rad.com for further information.

This release may be deemed to contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements we make regarding estimated future financial performance or results; anticipating non-GAAP currency-neutral revenue growth of between 10.0 to 10.5 percent and an estimated non-GAAP operating margin of approximately 19.0 percent for the full year 2021; and continuing to make progress on our core strategies, while supporting our customers and ensuring the safety of our employees. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, “anticipate,” “estimate,” “expect,” “continue,” “believe,” “will,” “project,” “assume,” “may,” “intend,” or similar expressions or the negative of those terms or expressions, although not all forward-looking statements contain these words. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. These risks and uncertainties include the duration, severity and impact of the COVID-19 pandemic, global economic conditions, our ability to develop and market new or improved products, our ability to compete effectively, foreign currency exchange fluctuations, reductions in government funding or capital spending of our customers, international legal and regulatory risks, supply chain issues, product quality and liability issues, our ability to integrate acquired companies, products or technologies into our company successfully, changes in the healthcare industry, and natural disasters and other catastrophic events beyond our control. For further information regarding the Company’s risks and uncertainties, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s public reports filed with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2021 to be filed with the SEC. The Company cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. Bio-Rad Laboratories, Inc. disclaims any obligation to update these forward-looking statements.

Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Income
 
(In thousands, except per share data)
(Unaudited)
 
Three Months Ended Six Months Ended
June 30, June 30,

2021

2020

2021

2020

Net sales

$

715,931

 

$

536,880

 

$

1,442,727

 

$

1,108,524

 

Cost of goods sold

 

314,333

 

 

243,892

 

 

640,502

 

 

498,168

 

Gross profit

 

401,598

 

 

292,988

 

 

802,225

 

 

610,356

 

 
Selling, general and administrative expense

 

213,425

 

 

189,262

 

 

439,278

 

 

382,954

 

Research and development expense

 

63,391

 

 

51,984

 

 

137,303

 

 

101,287

 

Income from operations

 

124,782

 

 

51,742

 

 

225,644

 

 

126,115

 

 
Interest expense

 

363

 

 

5,740

 

 

761

 

 

11,430

 

Foreign currency exchange (gains) losses, net

 

(1,761

)

 

774

 

 

(1,690

)

 

1,702

 

Change in fair market value of equity securities

 

(1,030,691

)

 

(1,183,488

)

 

(2,210,094

)

 

(2,011,159

)

Other expense (income), net

 

96

 

 

(17,229

)

 

(17,311

)

 

(20,502

)

Income before income taxes

 

1,156,775

 

 

1,245,945

 

 

2,453,978

 

 

2,144,644

 

 
Provision for income taxes

 

(242,661

)

 

(279,516

)

 

(562,450

)

 

(492,303

)

Net income

$

914,114

 

$

966,429

 

$

1,891,528

 

$

1,652,341

 

 
Basic earnings per share:
Net income per basic share

$

30.71

 

$

32.59

 

$

63.49

 

$

55.52

 

 
Weighted average common shares – basic

 

29,764

 

 

29,652

 

 

29,793

 

 

29,759

 

 
Diluted earnings per share:
Net income per diluted share

$

30.32

 

$

32.15

 

$

62.70

 

$

54.84

 

 
Weighted average common shares – diluted

 

30,148

 

 

30,058

 

 

30,167

 

 

30,131

 

 
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
  June 30, December 31,
 

2021

2020

  (Unaudited)
Current assets:  
Cash and cash equivalents  

$

732,836

$

662,205

Short-term investments  

 

434,122

 

334,473

Accounts receivable, net  

 

399,307

 

419,424

Inventories, net  

 

598,989

 

622,253

Other current assets  

 

123,839

 

101,480

Total current assets

 

2,289,093

 

2,139,835

   
Property, plant and equipment, net  

 

482,001

 

491,371

Operating lease right-of-use assets  

 

190,233

 

202,136

Goodwill, net  

 

291,916

 

291,916

Purchased intangibles, net  

 

184,852

 

199,497

Other investments  

 

11,580,390

 

9,561,140

Other assets  

 

99,071

 

86,723

Total assets  

$

15,117,556

$

12,972,618

   
Current liabilities:  
Accounts payable, accrued payroll and employee benefits  

$

342,345

$

362,326

Current maturities of long-term debt  

 

1,736

 

1,798

Income and other taxes payable  

 

52,421

 

57,335

Other current liabilities  

 

190,550

 

210,077

Total current liabilities

 

587,052

 

631,536

   
Long-term debt, net of current maturities  

 

10,779

 

12,258

Other long-term liabilities  

 

2,924,845

 

2,448,884

Total liabilities  

 

3,522,676

 

3,092,678

   
Total stockholders’ equity  

 

11,594,880

 

9,879,940

Total liabilities and stockholders’ equity

$

15,117,556

$

12,972,618

   
Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
   
  Six Months Ended
  June 30,
 

2021

2020

Cash flows from operating activities:  
Cash received from customers  

$

1,456,601

 

$

1,127,141

 

Cash paid to suppliers and employees  

 

(1,131,533

)

 

(959,300

)

Interest paid, net  

 

(1,536

)

 

(10,847

)

Income tax payments, net  

 

(77,573

)

 

(10,005

)

Other operating activities  

 

22,275

 

 

7,941

 

Net cash provided by operating activities  

 

268,234

 

 

154,930

 

   
Cash flows from investing activities:  
Payments for acquisitions  

 

 

 

(96,889

)

Other investing activities  

 

(148,604

)

 

(4,106

)

Net cash used in investing activities  

 

(148,604

)

 

(100,995

)

   
Cash flows from financing activities:  
Payments on long-term borrowings  

 

(1,523

)

 

(1,597

)

Other financing activities  

 

(42,959

)

 

(99,999

)

Net cash used in financing activities  

 

(44,482

)

 

(101,596

)

   
Effect of foreign exchange rate changes on cash  

 

(5,102

)

 

(2,858

)

   
Net increase (decrease) in cash, cash equivalents, and restricted cash  

 

70,046

 

 

(50,519

)

Cash, cash equivalents, and restricted cash at beginning of period  

 

667,115

 

 

662,651

 

Cash, cash equivalents, and restricted cash at end of period  

$

737,161

 

$

612,132

 

   
   
Reconciliation of net income to net cash  
provided by operating activities:  
Net income  

$

1,891,528

 

$

1,652,341

 

Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization  

 

66,388

 

 

68,256

 

Reduction in the carrying amount of right-of-use assets  

 

19,556

 

 

18,674

 

Changes in working capital  

 

(61,418

)

 

(34,539

)

Other  

 

(1,647,820

)

 

(1,549,802

)

Net cash provided by operating activities  

$

268,234

 

$

154,930

 

   
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 securities; 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

Ended

 

 

 

Three Months

Ended

 

 

 

Six Months

Ended

 

 

 

Six Months

Ended

 

 

June 30,

 

% of

 

June 30,

 

% of

 

June 30,

 

% of

 

June 30,

 

% of

2021

 

revenue

 

2020

 

revenue

 

2021

 

revenue

 

2020

 

revenue

GAAP cost of goods sold

$

314,333

 

$

243,892

 

$

640,502

 

$

498,168

 

Amortization of purchased intangibles

 

(4,640

)

 

(4,962

)

 

(9,225

)

 

(8,859

)

Legal matters

 

 

 

 

 

536

 

 

 

Restructuring benefits (costs)

 

(1,209

)

 

12

 

 

(25,189

)

 

1,468

 

Non-GAAP cost of goods sold

$

308,484

 

$

238,942

 

$

606,624

 

$

490,777

 

 
GAAP gross profit

$

401,598

 

56.1

%

$

292,988

 

54.6

%

$

802,225

 

55.6

%

$

610,356

 

55.1

%

Amortization of purchased intangibles

 

4,640

 

 

4,962

 

 

9,225

 

 

8,859

 

Legal matters

 

 

 

 

 

(536

)

 

 

Restructuring (benefits) costs

 

1,209

 

 

(12

)

 

25,189

 

 

(1,468

)

Non-GAAP gross profit

$

407,447

 

56.9

%

$

297,938

 

55.5

%

$

836,103

 

58.0

%

$

617,747

 

55.7

%

 
GAAP selling, general and administrative expense

$

213,425

 

$

189,262

 

$

439,278

 

$

382,954

 

Amortization of purchased intangibles

 

(2,355

)

 

(2,277

)

 

(4,710

)

 

(4,235

)

Legal matters

 

(8,761

)

 

(2,585

)

 

(13,176

)

 

(4,418

)

Acquisition related benefits (costs) (1)

 

40

 

 

955

 

 

40

 

 

1,002

 

Restructuring benefits (costs)

 

6,929

 

 

(3,320

)

 

(27,806

)

 

(2,807

)

Non-GAAP selling, general and administrative expense

$

209,278

 

$

182,035

 

$

393,626

 

$

372,496

 

 
GAAP research and development expense

$

63,391

 

$

51,984

 

$

137,303

 

$

101,287

 

Restructuring benefits (costs)

 

2,061

 

 

656

 

 

(14,789

)

 

1,055

 

Non-GAAP research and development expense

$

65,452

 

$

52,640

 

$

122,514

 

$

102,342

 

 
GAAP income from operations

$

124,782

 

17.4

%

$

51,742

 

9.6

%

$

225,644

 

15.6

%

$

126,115

 

11.4

%

Amortization of purchased intangibles

 

6,995

 

 

7,239

 

 

13,935

 

 

13,094

 

Legal matters

 

8,761

 

 

2,585

 

 

12,640

 

 

4,418

 

Acquisition related (benefits) costs (1)

 

(40

)

 

(955

)

 

(40

)

 

(1,002

)

Restructuring (benefits) costs

 

(7,781

)

 

2,652

 

 

67,784

 

 

284

 

Non-GAAP income from operations

$

132,717

 

18.5

%

$

63,263

 

11.8

%

$

319,963

 

22.2

%

$

142,909

 

12.9

%

 
GAAP change in fair market value of equity securities

$

(1,030,691

)

$

(1,183,488

)

$

(2,210,094

)

$

(2,011,159

)

Valuation (loss) gain on equity-owned securities

 

1,030,691

 

 

1,183,488

 

 

2,210,094

 

 

2,011,159

 

Non-GAAP change in fair market value of equity securities

$

 

$

 

$

 

$

 

 
GAAP other (income) expense, net

$

96

 

$

(17,229

)

$

(17,311

)

$

(20,502

)

(Loss) gain on equity-method investments

 

(1,840

)

 

(1,138

)

 

(3,680

)

 

(2,451

)

Other non-recurring items (3)

 

 

 

11,680

 

 

 

 

11,680

 

Non-GAAP other (income) expense, net

$

(1,744

)

$

(6,687

)

$

(20,991

)

$

(11,273

)

 
GAAP income before income taxes

$

1,156,775

 

$

1,245,945

 

$

2,453,978

 

$

2,144,644

 

Amortization of purchased intangibles

 

6,995

 

 

7,239

 

 

13,935

 

 

13,094

 

Legal matters

 

8,761

 

 

2,585

 

 

12,640

 

 

4,418

 

Acquisition related (benefits) costs (1)

 

(40

)

 

(955

)

 

(40

)

 

(1,002

)

Restructuring (benefits) costs

 

(7,781

)

 

2,652

 

 

67,784

 

 

284

 

Valuation loss (gain) on equity-owned securities

 

(1,030,691

)

 

(1,183,488

)

 

(2,210,094

)

 

(2,011,159

)

Loss (gain) on equity-method investments

 

1,840

 

 

1,138

 

 

3,680

 

 

2,451

 

Other non-recurring items (3)

 

 

 

(11,680

)

 

 

 

(11,680

)

Non-GAAP income before income taxes

$

135,859

 

$

63,436

 

$

341,883

 

$

141,050

 

 
GAAP provision for income taxes

$

(242,661

)

$

(279,516

)

$

(562,450

)

$

(492,303

)

Income tax effect of non-GAAP adjustments (2)

 

213,387

 

 

264,428

 

 

484,523

 

 

457,230

 

Non-GAAP provision for income taxes

$

(29,274

)

$

(15,088

)

$

(77,927

)

$

(35,073

)

 
GAAP net income

$

914,114

 

127.7

%

$

966,429

 

180.0

%

$

1,891,528

 

131.1

%

$

1,652,341

 

149.1

%

Amortization of purchased intangibles

 

6,995

 

 

7,239

 

 

13,935

 

 

13,094

 

Legal matters

 

8,761

 

 

2,585

 

 

12,640

 

 

4,418

 

Acquisition related (benefits) costs (1)

 

(40

)

 

(955

)

 

(40

)

 

(1,002

)

Restructuring (benefits) costs

 

(7,781

)

 

2,652

 

 

67,784

 

 

284

 

Valuation loss (gain) on equity-owned securities

 

(1,030,691

)

 

(1,183,488

)

 

(2,210,094

)

 

(2,011,159

)

Loss (gain) on equity-method investments

 

1,840

 

 

1,138

 

 

3,680

 

 

2,451

 

Other non-recurring items (3)

 

 

 

(11,680

)

 

 

 

(11,680

)

Income tax effect of non-GAAP adjustments (2)

 

213,387

 

 

264,428

 

 

484,523

 

 

457,230

 

Non-GAAP net income

$

106,585

 

14.9

%

$

48,348

 

9.0

%

$

263,956

 

18.3

%

$

105,977

 

9.6

%

 
GAAP diluted income per share

$

30.32

 

$

32.15

 

$

62.70

 

$

54.84

 

Amortization of purchased intangibles

 

0.23

 

 

0.24

 

 

0.46

 

 

0.43

 

Legal matters

 

0.29

 

 

0.09

 

 

0.42

 

 

0.15

 

Acquisition related (benefits) costs (1)

 

 

 

(0.03

)

 

 

 

(0.03

)

Restructuring (benefits) costs

 

(0.26

)

 

0.09

 

 

2.25

 

 

0.01

 

Valuation loss (gain) on equity-owned securities

 

(34.19

)

 

(39.37

)

 

(73.26

)

 

(66.75

)

Loss (gain) on equity-method investments

 

0.06

 

 

0.04

 

 

0.12

 

 

0.08

 

Other non-recurring items (3)

 

 

 

(0.39

)

 

 

 

(0.39

)

Income tax effect of non-GAAP adjustments (2)

 

7.09

 

 

8.79

 

 

16.06

 

 

15.18

 

Non-GAAP diluted income per share

$

3.54

 

$

1.61

 

$

8.75

 

$

3.52

 

 
GAAP diluted weighted average shares used in per share calculation

 

30,148

 

 

30,058

 

 

30,167

 

 

30,131

 

Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive

 

 

 

 

 

 

 

 

Non-GAAP diluted weighted average shares used in per share calculation

 

30,148

 

 

30,058

 

 

30,167

 

 

30,131

 

(1)

  Release of contingent consideration and other acquisition-related (benefits) expenses.
     

(2)

  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.
     

(3)

  Gain on the sale of a division (2020).

2021 Financial Outlook

Forecasted non-GAAP operating margin excludes 102 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.

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