Bio-Rad Laboratories Inc (NYSE:BIO) Q3 2020 Earnings Conference Call - Final Transcript

Oct 29, 2020 • 06:00 pm ET

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Bio-Rad Laboratories Inc (NYSE:BIO) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Andrew Last

work and dedication across our organization.

As a reminder, we have three key areas of focus as we continue to manage through this challenging period, the ongoing safety of our employees, continuing manufacturing operations to ensure product supply and support of our customers, and making sure we make progress on our core strategies. We have now established routine practices around the world to improve employee safety. We have adapted our policies and approaches to local conditions and requirements and are very pleased with the productivity we have been able to achieve. Work from home continues where required and for those in our facilities, we are continuing to implement broad safety procedures and we continue to experience minimized case numbers.

In the US, we have now implemented a fast turnaround testing solution for suspected cases using a Droplet Digital PCR test and can rapidly deliver results back to an employee. This has enabled us to avoid significant work downtime, summing to over a full-year productivity equivalent so far. In manufacturing, our operations teams continue to be flexible and meeting the demand shifts driven by the pandemic. We have flexed well to meet the high demand for our PCR products which increased in Q3 and we have scaled back where needed, mainly for our Diagnostics products. We are now past the majority of the initial scale-up issues we encountered with supply chain disruption early in the pandemic and believe we are well-positioned to meet future needs. Lastly, we continue to work on our core initiatives and strategies, in particular in R&D, where we now have all our labs operational.

Thank you, and now I'll pass it back to Ilan.

Executive
Ilan Daskal

Thank you, Andy. Now I would like to review the results of the third quarter. Net sales for the third quarter of 2020 were $647.3 million, which is a 15.5% increase on a reported basis versus $560.6 million in Q3 of 2019. On a currency neutral basis, sales increased 14.9%. On a geographic basis, we experienced currency neutral growth across all three regions. We saw a strong demand for products associated with COVID-19 testing and related research. However, we saw lower demand in the rest of our business.

Overall in Q3, we have seen a gradual improvement in demand for both our Life Science and Diagnostics products in all regions as compared to Q2. Generally, we are seeing most academic and Diagnostics Labs now running between 70% and 90% capacity and slowly continuing to improve. Biopharma labs are broadly running at a slightly higher capacity rate of 80% to 90% and we continue to monitor the situation closely. We estimate that COVID-19-related sales were about $98 million in the quarter.

Sales of the Life Science Group in the third quarter of 2020 were $324 million compared to $215.7 million in Q3 of 2019, which is a 50.2% increase on a reported basis and a 48.8% increase on a currency neutral basis. The majority of the year-over-year growth in the third quarter was driven