Market Overview

Bio-Rad Reports Second-Quarter 2018 Financial Results

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Bio-Rad Laboratories, Inc. (NYSE:BIO), a global leader of life
science research and clinical diagnostic products, today announced
financial results for the second quarter ended June 30, 2018.

Second-quarter 2018 net sales were $575.9 million, an increase of 14.1
percent compared to $504.7 million reported for the second quarter of
2017. On a currency-neutral basis, quarterly sales increased 11.0
percent compared to the same period in 2017, reflecting broad growth
across the business. Second-quarter gross margin was 52.4 percent
compared to 54.2 percent during the second quarter in 2017. The decline
in gross margin versus the same period last year is the result of
changes in the quarterly make up of product mix toward higher instrument
placements, and certain costs associated with the continued transition
of European operations.

Life Science segment net sales for the second quarter were $217.8
million, an increase of 21.4 percent compared to the same period in
2017. On a currency-neutral basis, Life Science segment sales increased
by 18.9 percent compared to the same quarter in 2017. Currency-neutral
sales reflect growth of multiple product lines in the segment, including
sales of cell biology, process media, digital PCR and food safety
products. On a geographic view, the sales increase was attributed to
growth across all major regions, including North America, Europe, and
Asia.

Clinical Diagnostics segment net sales for the second quarter were
$354.0 million, an increase of 9.9 percent compared to the same period
in 2017. On a currency-neutral basis, net sales were up 6.5 percent
compared to the same quarter last year. Currency-neutral sales from the
second quarter reflected growth in blood typing, quality control, and
immunology product lines. On a geographic view, the sales increase for
the quarter was attributed to growth across all regions.

Net income for the second quarter of 2018 was $268.0 million, or $8.87
per share on a diluted basis, compared to $5.0 million, or $0.17 per
share on a diluted basis, during the same period in 2017. Net income for
the second quarter of 2018 compared to the second quarter of 2017 was
significantly and favorably impacted by the recognition on the income
statement of changes in the fair market value of equity securities of
$286.4 million in this quarter primarily related to the holdings of our
investment in Sartorius AG. Inclusion of these equity investment changes
in valuation is the result of new accounting standards that became
effective in 2018.

The effective tax rate for the second quarter of 2018 was 21 percent
compared to a 350 percent benefit for the same period in 2017. The
effective tax rate for 2017 was due to the impact of second quarter
discrete items on a low pre-tax income.

"We are pleased with our sales performance for the second quarter which
reflects double digit growth in our three major geographies and strength
across many of our key life science and diagnostic product lines," said
Norman Schwartz, Bio-Rad President and Chief Executive Officer. "And
while the gross margin for the quarter was somewhat lower than expected,
we continue to make progress toward expanding our operating results and
reaching our long term goals."

 
GAAP Results
    Q2 2018   Q2 2017
Revenue (Millions)   $575.9   $504.7
Gross Margin   52.4%   54.2%
Operating Margin   7.6%   (0.3)%
Net Income (Millions)   $268.0   $5.0
Income per Diluted Share   $8.87   $0.17
 
Non-GAAP Results
    Q2 2018   Q2 2017
Gross Margin   53.4%   55.6%
Operating Margin   10.0%   3.5%
Net Income (Millions)   $49.5   $18.8
Income per Diluted Share   $1.64   $0.62
   

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 investments; 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 2018 was $49.5 million, or
$1.64 per share on a diluted basis, compared to $18.8 million, or $0.62
per share on a diluted basis, during the same period in 2017. The
non-GAAP effective tax rate for the second quarter of 2018 was 27.1
percent compared to 9.3 percent for the same period in 2017.

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 months ended June 30,
2018 and 2017 and six months ended June 30, 2018 and 2017:

 
Three Months Ended

June 30,

Six Months Ended

June 30,

2018   2017   2018   2017

GAAP net income

$268,043 $5,035 $924,817 $17,448
Amortization of purchased intangibles 6,771 8,813 13,650 15,601
Legal matters 5,110 (182) 8,789 3,356
Acquisition-related (benefits) costs 1,512 10,226 (106) 10,826
Restructuring costs 450 684 1,488 684
Valuation change in equity-owned securities (286,398) - (1,102,332) -
Loss on equity-method investments 405 24 403 163
Other non-recurring items - - (9,208) -
Income tax effect on non-GAAP adjustments 53,647 (5,849) 247,398 (9,045)
Non-GAAP net income $49,540 $18,751 $84,899 39,033
 

GAAP diluted income per share

$8.87 $0.17 $30.63 $0.58

Non-GAAP diluted income per share

$1.64 $0.62 $2.81 $1.30
 

On a reported basis, net sales for the first half of 2018 increased 12.2
percent to $1,127.4 billion compared to $1,004.7 billion for the same
period in 2017. On a currency-neutral basis, net sales grew 7.8 percent.

Year-to-date net income for 2018 was $924.8 million, or $30.63 per share
on a fully diluted basis, compared to $17.4 million, or $0.58 per share,
respectively, during the same period in 2017.

2018 Financial Outlook

For the full year 2018, the company is raising the currency-neutral
revenue growth outlook to be 4.0 to 4.5 percent, up from the previous
estimate of 3.5 to 4.0 percent. The company continues to target a full
year currency-neutral operating margin of 10 percent, or an estimated
11.0 to 11.5 percent on a non-GAAP basis. This maintaining of the prior
operating margin outlook assumes a substantial improvement in gross
margin for the second half of the year as compared to the first half
results. Management will discuss this outlook in greater detail on the
second quarter 2018 financial results conference call.

"We are very encouraged with our growth in the first half of the year,
especially because it represents a broad contribution from all our major
geographies, as well as across key product lines," Mr. Schwartz said.
"We will continue to stay focused on improving operating efficiency and
driving benefit from the numerous investments we have made over the past
several years," he added.

Non-GAAP Reporting

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
investments, 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. 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, valuation costs, integration costs, changes
in the fair value of contingent consideration liabilities, gain or
expense on settlement of pre-existing relationships, and other
professional or consulting fees. 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, valuation changes in equity owned
investments and gains and losses on equity-method investments:
 we
incur restructuring and impairment charges on individual or groups of
employed assets, charges and benefits arising from valuation changes in
equity owned investments 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
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.

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, 2018 results in a
conference call at 2 PM Pacific Time (5 PM Eastern Time) August 7, 2018.
Interested parties may access the call at 855-779-9068 within the U.S.
or 631-485-4862 outside the U.S., Conference ID: 6068817. You may also
listen to the conference call via a webcast that is available in the
"Investor Relations" section of our website under "Quarterly Results" at www.bio-rad.com.
The webcast will be available for up to a year.

About Bio-Rad

Bio-Rad Laboratories, Inc. (NYSE:BIO) 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 more than 8,000 employees
worldwide. Bio-Rad had revenues exceeding $2.1 billion in 2017. For more
information, please visit www.bio-rad.com.

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, the growth of our business, continuing to make
progress toward expanding our operating results and reaching our long
term goals, staying focused on improving our operating efficiency and
driving benefit from the numerous investments we have made over the past
several years. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as, "anticipate," "believe,"
"expect," "assume," "continue," "may," "will," "intend," "estimate," 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 our
ability to develop and market new or improved products, difficulties in
implementing our global enterprise resource planning system, recent and
planned changes to our global organizational structure and executive
management team, our ability to compete effectively, foreign currency
exchange fluctuations, product quality and liability issues,
international legal and regulatory risks, global economic conditions,
reductions in government funding or capital spending of our customers,
our ability to integrate acquired companies, products or technologies
into our company successfully, supply chain issues, 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, 2017, and its
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2018
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

June 30,

  Six Months Ended

June 30,

2018   2017 2018   2017
Net sales $ 575,911 $ 504,666 $ 1,127,430 $ 1,004,717
Cost of goods sold   274,244     231,291     523,560     461,279  
Gross profit 301,667 273,375 603,870 543,438
 

Selling, general and administrative expense

210,425 212,489 419,555 406,891
Research and development expense   47,450     62,587     96,877     112,039  
Income (loss) from operations 43,792 (1,701 ) 87,438 24,508
 
Interest expense 5,977 6,045 11,759 11,361

Foreign currency exchange (gains) losses, net

(15 ) 2,516 1,239 4,305
Change in fair market value of equity securities (286,398 ) - (1,102,332 ) -
Other (income) expense, net   (15,858 )   (11,382 )   (27,003 )   (12,425 )
Income before income taxes 340,086 1,120 1,203,775 21,267
 
(Provision) benefit for income taxes   (72,043 )   3,915     (278,958 )   (3,819 )
Net income $ 268,043   $ 5,035   $ 924,817   $ 17,448  
 
Basic earnings per share:
Net income per basic share $ 8.99   $ 0.17   $ 31.03   $ 0.59  
 
Weighted average common shares - basic   29,814     29,613     29,801     29,597  
 
Diluted earnings per share:
Net income per diluted share $ 8.87   $ 0.17   $ 30.63   $ 0.58  
 
Weighted average common shares - diluted   30,219     30,006     30,197     29,962  
 
Bio-Rad Laboratories, Inc.
Condensed Consolidated Balance Sheets
 
(In thousands)
 
 
 
 
  June 30,   December 31,
2018 2017
(UNAUDITED)
Current assets:
Cash and cash equivalents $ 403,006 $ 383,824
Short-term investments 420,801 376,714
Accounts receivable, net 404,091 464,847
Inventories, net 591,433 594,804
Other current assets   173,003   156,460
Total current assets 1,992,334 1,976,649
 
Property, plant and equipment, net 490,249 493,496
Goodwill, net 500,022 506,069
Purchased intangibles, net 158,035 174,113
Other investments 3,170,820 1,027,736
Other assets   74,763   94,949
Total assets $ 6,386,223 $ 4,273,012
 
Current liabilities:
Accounts payable, accrued payroll and employee benefits $ 261,721 $ 306,814
Current maturities of long-term debt 1,721 420
Income and other taxes payable 29,585 39,941
Other current liabilities   149,394   155,521
Total current liabilities 442,421 502,696
 
Long-term debt, net of current maturities 438,776 434,581
Other long-term liabilities   866,080   405,485
Total liabilities 1,747,277 1,342,762
 
Total stockholders' equity   4,638,946   2,930,250
Total liabilities and stockholders' equity $ 6,386,223 $ 4,273,012
 
Bio-Rad Laboratories, Inc.
Condensed Consolidated Statements of Cash Flows
 
(In thousands)
(UNAUDITED)
 
 
 
 
  Six Months

Ended June 30,

 
2018 2017
 
Cash flows from operating activities:
Cash received from customers $ 1,160,904 $ 999,779
Cash paid to suppliers and employees (1,007,565 ) (968,719 )
Interest paid, net (11,277 ) (10,865 )
Income tax payments, net (47,620 ) (19,066 )
Other operating activities   23,766     5,168  
Net cash provided by operating activities 118,208 6,297
 
Cash flows from investing activities:
Proceeds from (payments for) acquisitions and long-term investments 266 (73,573 )
Other investing activities   (102,924 )   (74,102 )
Net cash used in investing activities (102,658 ) (147,675 )
 
Cash flows from financing activities:
Payments on long-term borrowings (1,505 ) (149 )
Other financing activities   2,004     (246 )
Net cash provided by (used in) financing activities 499 (395 )
 
Effect of foreign exchange rate changes on cash   3,053     7,190  
 
Net increase (decrease) in cash, cash equivalents, and restricted
cash
19,102 (134,583 )

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

  384,983     457,171  
Cash, cash equivalents, and restricted cash at end of period $ 404,085   $ 322,588  
 
 

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

 

Net income $ 924,817 $ 17,448

Adjustments to reconcile net income to net cash provided by
operating activities:

 

Depreciation and amortization 68,669 70,688
Changes in working capital (29,857 ) (91,898 )
Other   (845,421 )   10,059  
Net cash provided by operating activities $ 118,208   $ 6,297  
 

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 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 revenue June 30, % of revenue June 30, % of revenue June 30, % of revenue
  2018   revenue     2017   revenue     2018   revenue     2017   revenue
 
GAAP cost of goods sold $ 274,244 $ 231,291 $ 523,560 $ 461,279
Amortization of purchased intangibles (4,717 ) (7,061 ) (9,526 ) (12,166 )
Acquisition related benefits (costs) (1) - - - (10,000 )
Restructuring costs   (1,286 )   -     (1,474 )   -  
Non-GAAP cost of goods sold $ 268,241   $ 224,230   $ 512,560   $ 439,113  
 
GAAP gross profit $ 301,667 52.4 % $ 273,375 54.2 % $ 603,870 53.6 % $ 543,438 54.1 %
Amortization of purchased intangibles 4,717 7,061 9,526 12,166
Acquisition related (benefits) costs (1) - - - 10,000
Restructuring costs   1,286     -     1,474     -  
Non-GAAP gross profit $ 307,670   53.4 % $ 280,436   55.6 % $ 614,870   54.5 % $ 565,604   56.3 %
 
GAAP selling, general and administrative expense $ 210,425 $ 212,489 $ 419,555 $ 406,891
Amortization of purchased intangibles (2,054 ) (1,752 ) (4,124 ) (3,435 )
Legal matters (5,110 ) 182 (8,789 ) (3,356 )
Acquisition related benefits (costs) (2) (1,512 ) 1,300 618 10,700
Restructuring costs   492     (684 )   (358 )   (684 )
Non-GAAP selling, general and administrative expense $ 202,241   $ 211,535   $ 406,902   $ 410,116  
 
GAAP research and development expense $ 47,450 $ 62,587 $ 96,877 $ 112,039
Acquisition related benefits (costs) (2) - (11,526 ) (512 ) (11,526 )
Restructuring costs   344     -     344     -  
Non-GAAP research and development expense $ 47,794   $ 51,061   $ 96,709   $ 100,513  
 
GAAP income from operations $ 43,792 7.6 % $ (1,701 ) -0.3 % $ 87,438 7.8 % $ 24,508 2.4 %
Amortization of purchased intangibles 6,771 8,813 13,650 15,601
Legal matters 5,110 (182 ) 8,789 3,356
Acquisition related (benefits) costs (1) (2) 1,512 10,226 (106 ) 10,826
Restructuring costs   450     684     1,488     684  
Non-GAAP income from operations $ 57,635   10.0 % $ 17,840   3.5 % $ 111,259   9.9 % $ 54,975   5.5 %
 
GAAP change in fair market value of equity securities $ (286,398 ) $ - $ (1,102,332 ) $ -
Valuation change in equity-owned securities (3)   286,398     -     1,102,332     -  
Non-GAAP change in fair market value of equity securities $ -   $ -   $ -   $ -  
 
GAAP other (income) expense, net $ (15,858 ) $ (11,382 ) $ (27,003 ) $ (12,425 )
Loss on equity-method investments (405 ) (24 ) (403 ) (163 )
Other non-recurring items (4)   -     -     9,208     -  
Non-GAAP other (income) expense, net $ (16,263 ) $ (11,406 ) $ (18,198 ) $ (12,588 )
 
GAAP income before income taxes $ 340,086 $ 1,120 $ 1,203,775 $ 21,267
Amortization of purchased intangibles 6,771 8,813 13,650 15,601
Legal matters 5,110 (182 ) 8,789 3,356
Acquisition related (benefits) costs (1) (2) 1,512 10,226 (106 ) 10,826
Restructuring costs 450 684 1,488 684
Valuation change in equity-owned securities (3) (286,398 ) - (1,102,332 ) -
Loss on equity-method investments 405 24 403 163
Other non-recurring items (4)   -     -     (9,208 )   -  
Non-GAAP income before income taxes $ 67,936   $ 20,685   $ 116,459   $ 51,897  
 
GAAP (provision) benefit for income taxes $ (72,043 ) $ 3,915 $ (278,958 ) $ (3,819 )
Income tax effect of non-GAAP adjustments (5)   53,647     (5,849 )   247,398     (9,045 )
Non-GAAP provision for income taxes $ (18,396 ) $ (1,934 ) $ (31,560 ) $ (12,864 )
 
GAAP net income $ 268,043 46.5 % $ 5,035 1.0 % $ 924,817 82.0 % $ 17,448 1.7 %
Amortization of purchased intangibles 6,771 8,813 13,650 15,601
Legal matters 5,110 (182 ) 8,789 3,356
Acquisition related (benefit) costs (1) (2) 1,512 10,226 (106 ) 10,826
Restructuring costs 450 684 1,488 684
Valuation change in equity-owned securities (3) (286,398 ) - (1,102,332 ) -
Loss on equity-method investments 405 24 403 163
Other non-recurring items (4) - - (9,208 ) -
Income tax effect of non-GAAP adjustments (5)   53,647     (5,849 )   247,398     (9,045 )
Non-GAAP net income $ 49,540   8.6 % $ 18,751   3.7 % $ 84,899   7.5 % $ 39,033   3.9 %
 
GAAP diluted income per share $ 8.87 $ 0.17 $ 30.63 $ 0.58
Amortization of purchased intangibles 0.22 0.29 0.45 0.52
Legal matters 0.17 (0.01 ) 0.29 0.11
Acquisition related (benefits) costs (1) (2) 0.05 0.34 - 0.36
Restructuring costs 0.01 0.02 0.05 0.02
Valuation change in equity-owned securities (3) (9.48 ) - (36.50 ) -
Loss on equity-method investments 0.01 - 0.01 0.01
Other non-recurring items (4) - - (0.30 ) -
Income tax effect of non-GAAP adjustments (5)   1.79     (0.19 )   8.18     (0.30 )
Non-GAAP diluted income per share $ 1.64   $ 0.62   $ 2.81   $ 1.30  
 
GAAP diluted weighted average shares used in per share calculation 30,219 30,006 30,197 29,962
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
  30,219     30,006     30,197     29,962  
 
 
 
(1) One-time expense associated with the February 2017 acquisition
of RainDance Technologies, Inc.
 
(2) Release of contingent consideration and other
acquisition-related expense
 
(3) Mark-to-market gain on equity-owned securities
 
(4) Gain on the sale of land and a product line
 

(5) 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.

 

2018 Financial Outlook

Forecasted non-GAAP operating margin excludes 1.5 basis points related
to amortization of purchased intangibles and certain legal matters.
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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