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What changed in BIO-RAD LABORATORIES, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BIO-RAD LABORATORIES, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+186 added−201 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-16)

Top changes in BIO-RAD LABORATORIES, INC.'s 2024 10-K

186 paragraphs added · 201 removed · 167 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

33 edited+2 added−6 removed31 unchanged
Biggest changeMajor competitors in this market include Becton Dickinson, Danaher, Merck Millipore and Thermo Fisher Scientific. We compete primarily based on meeting performance specifications and offering comprehensive solutions. Major competitors for our products in the Clinical Diagnostics segment include Roche, Abbott Laboratories, Siemens, Danaher, Thermo Fisher Scientific, Becton Dickinson, bioMérieux, Ortho Clinical Diagnostics, Tosoh, Immucor and DiaSorin.
Biggest changeOur Life Science segment does not face the same competitors for all of its products due to the breadth of its portfolio and specialization of its product lines. Major competitors in this market include Becton Dickinson, Danaher, Merck KGaA, Qiagen N.V. and Thermo Fisher Scientific. We compete primarily based on meeting performance specifications, technical support, and offering comprehensive solutions.
We also support employees’ professional development by providing a reimbursement program for qualified educational expenses. Investment in Sartorius AG Sartorius AG ("Sartorius") is an international laboratory and process technology provider for the biotech, pharmaceutical, and food industries. It operates in two divisions – Bioprocess Solutions Division and Lab Products & Services Division.
We also support employees’ professional development by providing a reimbursement program for qualified educational expenses. Investment in Sartorius AG 7 Sartorius AG ("Sartorius") is an international laboratory and process technology provider for the biotech, pharmaceutical, and food industries. It operates in two divisions – Bioprocess Solutions Division and Lab Products & Services Division.
Starting in 2023, we introduced an upgraded and streamlined mental health/Employee Assistance Program solution tailored to the need and preference of employees and families. In addition, we added a fertility benefit giving employees access to a suite of services including pregnancy resources, in vitro fertilization (“IVF”), adoption, donor and surrogate services resources.
In 2023, we introduced an upgraded and streamlined mental health/Employee Assistance Program solution tailored to the need and preference of employees and families. In addition, we added a fertility benefit giving employees access to a suite of services including pregnancy resources, in vitro fertilization (“IVF”), adoption, donor and surrogate services resources.
The following graph reflects the changes in the Sartorius share price over the most recent five annual periods: Available Information Bio-Rad files annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934, as amended.
The following graph reflects the changes in the Sartorius share price over the most recent five annual periods: 8 Available Information Bio-Rad files annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as amended.
We provide work site hazard evaluations, workplace safety surveys, safety equipment selection, safety program reviews, chemical exposure monitoring, safety training, and disposal of hazardous chemical and infectious waste. 7 Training and Talent Development We provide training programs for managers and employees to support their growth and development.
We provide work site hazard evaluations, workplace safety surveys, safety equipment selection, safety program reviews, chemical exposure monitoring, safety training, and disposal of hazardous chemical and infectious waste. Training and Talent Development We provide training programs for managers and employees to support their growth and development.
We have direct distribution channels in over 35 countries outside the United States through subsidiaries whose focus is sales, customer service and product distribution. In some locations outside and inside these 35 countries, sales efforts are supplemented by distributors and agents. Description of Business Business Segments Bio-Rad operates in two industry segments designated as Life Science and Clinical Diagnostics.
We have direct distribution channels in over 36 countries outside the United States through subsidiaries whose focus is sales, customer service and product distribution. In some locations outside and inside these 36 countries, sales efforts are supplemented by distributors and agents. Description of Business Business Segments Bio-Rad operates in two industry segments designated as Life Science and Clinical Diagnostics.
FDA regulations require that some new products have pre-marketing notification (“510(k)”) or approval (“PMA” or Biologics License Application – “BLA”) by the FDA and require certain products to be manufactured in accordance with FDA’s “good manufacturing practice” regulations, to be extensively tested and to 5 be properly labeled to disclose test results and performance claims and limitations.
FDA regulations require that certain new products have pre-marketing notification (“510(k)”) or approval (“PMA” or Biologics License Application – “BLA”) by the FDA and require certain products to be manufactured in accordance with FDA’s “good manufacturing practice” regulations, to be extensively tested and to be properly labeled to disclose test results and performance claims and limitations.
We make available, free of charge through our website, our Form 10-Ks, 10-Qs and 8-Ks, and any amendments to these forms, as soon as reasonably practicable after filing with the SEC. The information on our website is not part of this Annual Report on Form 10-K. 9
We make available, free of charge through our website, our Form 10-Ks, 10-Qs and 8-Ks, and any amendments to these reports, as soon as reasonably practicable after filing with the SEC. The information on our website is not part of this Annual Report on Form 10-K. 9
We account for our investment in Sartorius at fair market value and do not include any of the financial information summarized below in our consolidated financial statements. The following summarizes certain financial data of Sartorius as of and for the year ended December 31, 2022, (in millions).
We account for our investment in Sartorius at fair market value and do not include any of the financial information summarized below in our consolidated financial statements. The following summarizes certain financial data of Sartorius as of and for the year ended December 31, 2023 (in millions).
Bio-Rad does not assume, and by way of referencing the financial data of Sartorius above shall not be deemed to assume, any responsibility or liability for any errors or omissions in the information publicly disclosed by Sartorius. 8 Refer to Sartorius’ 2022 Annual Report for further details, which can be found at https://www.sartorius.com/en/company/investor-relations/sartorius-ag-investor-relatio ns.
Bio-Rad does not assume, and by way of referencing the financial data of Sartorius above shall not be deemed to assume, any responsibility or liability for any errors or omissions in the information publicly disclosed by Sartorius. Refer to Sartorius’ 2023 Annual Report for further details, which can be found at https://www.sartorius.com/en/company/investor-relations/sartorius-ag-investor-relatio ns.
Bio-Rad manufactures and supplies the life science research, healthcare, analytical chemistry and other markets with a broad range of products and systems used to separate complex chemical and biological materials and to identify, analyze and purify their components.
Bio-Rad develops, manufactures, and supplies life science research, healthcare, analytical chemistry and other markets with a broad range of products and systems used to separate complex chemical and biological materials and to identify, analyze and purify their components.
Our customer base is broad and diversified. Our worldwide customer base includes (1) prominent university and research institutions; (2) hospital, public health and commercial laboratories; (3) other leading diagnostic manufacturers; and (4) leading companies in the biotechnology, pharmaceutical, chemical and food industries. Our sales are affected by a number of external factors.
Our customer base is broad and diversified. Our worldwide customer base includes (1) university and research institutions; (2) hospital, public health and commercial laboratories; (3) diagnostic manufacturers; and (4) companies in the biotechnology, pharmaceutical, chemical and food industries. Our sales are affected by a number of external factors.
ITEM 1. BUSINESS General Bio-Rad Laboratories, Inc. (referred to in this report as “Bio-Rad,” “we,” “us,” and “our”) is a multinational manufacturer and worldwide distributor of our own life science research and clinical diagnostics products.
ITEM 1. BUSINESS General Bio-Rad Laboratories, Inc. (referred to in this report as “Bio-Rad,” “we,” “us,” “the Company” and “our”) is a multinational developer, manufacturer, and worldwide distributor of our own life science research and clinical diagnostics products.
We generated approximately 42% of our consolidated net sales for the year ended December 31, 2023 from the U.S. and approximately 58% from our international locations, with Europe being our largest international region . Life Science Segment Our Life Science segment is at the forefront of discovery, creating advanced tools to answer complex biological questions.
We generated approximately 41% of our consolidated net sales for the year ended December 31, 2024 from the U.S. and approximately 59% from our international locations, with Europe being our largest international region . Life Science Segment Our Life Science segment is at the forefront of discovery, creating advanced tools to answer complex biological questions.
Bio-Rad's IVD products currently meet the applicable requirements of the EU IVDR. Our manufacturing facilities, as well as those of certain suppliers, are subject to periodic inspections by the FDA and other regulatory bodies to verify compliance with regulatory requirements. Similar inspections are performed by Notified Bodies to verify compliance to applicable ISO standards (e.g.
Bio-Rad's IVD products currently meet the applicable requirements of the EU IVDR. Our manufacturing facilities, as well as those of certain suppliers, are subject to periodic inspections by the FDA and other regulatory bodies to verify compliance with regulatory requirements. Similar inspections are performed by Notified Bodies to verify compliance to applicable International Organization for Standardization (“ISO”) standards (e.g.
Our sales force typically consists of experienced industry professionals with scientific training, and we maintain a separate specialized sales force for each of our segments. We believe that this direct sales approach allows us to sell a broader range of our products that creates more brand awareness and long-term relationships with our customers.
Our sales personnel typically consist of experienced industry professionals with scientific training, and we maintain a separate specialized sales 4 force for each of our segments. We believe that this direct sales approach allows us to sell a broader range of our products, create more brand awareness, and develop long-term relationships with our customers.
However, the European custom of concentrating vacation during the summer months usually tempers third quarter sales volume and operating income. Sales and Marketing 4 We conduct our worldwide operations through an extensive direct sales force, employing approximately 810 direct sales and sales management personnel around the world.
However, the European custom of concentrating vacation during the summer months usually tempers third quarter sales volume and operating income. Sales and Marketing We conduct our worldwide operations through an extensive direct sales force, employing approximately 800 direct sales and sales management personnel around the world as of December 31, 2024.
As of December 31, 2023, we own 12,987,900 ordinary voting shares and 9,588,908 preference shares of Sartorius, representing approximately 38% of the outstanding ordinary shares (excluding treasury shares) and 28% of the preference shares of Sartorius. As of December 31, 2023, the fair value of the investment in Sartorius was $7,331.9 million .
As of December 31, 2024, we own 12,987,900 ordinary voting shares and 9,588,908 preference shares of Sartorius, representing approximately 38% of the outstanding ordinary shares (excluding treasury shares) and 28% of the preference shares of Sartorius. As of December 31, 2024, the fair value of the investment in Sartorius was $4,469.2 million .
These instruments, systems, reagents, and consumables are typically used to separate, purify, characterize, or quantitate biological materials such as cells, proteins, and nucleic acids in the research laboratory or the biopharmaceutical manufacturing and quality control process, for food safety and science education and literacy.
These instruments, systems, reagents, and consumables are typically used to separate, purify, characterize, or quantify biological materials such as cells, proteins, and nucleic acids in the research laboratory or 3 biopharmaceutical laboratory. They are also used in biopharmaceutical manufacturing, quality control process, food safety, and science education applications.
Both segments operate worldwide. Our Life Science segment and our Clinical Diagnostics segment generated 44% and 56%, respectively, of our consolidated net sales for the year ended December 31, 2023.
Both segments operate worldwide. Our Life Science segment and our Clinical Diagnostics segment generated 40% and 60%, respectively, of our consolidated net sales for the year ended December 31, 2024.
December 31, 2022 (1) Current assets € 2,023.2 Non-current assets 4,954.6 Current liabilities 1,803.4 Non-current liabilities 2,515.5 Equity 2,658.9 Year Ended December 31, 2022 (1) Sales revenue € 4,174.7 Gross profit on sales 2,196.5 Earnings before interest and taxes (EBIT) 1,064.8 Net profit 913.1 Cash flow from operating activities 734.2 Cash flow from investing activities (1,129.9) Cash flow from financing activities 209.9 (1) As disclosed in Sartorius AG's consolidated financial statements for the year ended December 31, 2022, prepared in accordance with the International Financial Reporting Standards (IFRS), the International Financial Reporting Interpretations Committee (IFRIC) Standards, and the International Accounting Standards Board (IASB) as required to be applied by the European Union, and based upon information publicly disclosed by Sartorius.
December 31, 2023 (1) Current assets € 1,956.9 Non-current assets 7,798.5 Current liabilities 1,330.0 Non-current liabilities 5,667.9 Equity 2,757.4 Year Ended December 31, 2023 (1) Sales revenue € 3,395.7 Gross profit on sales 1,561.7 Earnings before interest and taxes (EBIT) 503.9 Net profit 290.0 Cash flow from operating activities 853.6 Cash flow from investing activities (2,823.3) Cash flow from financing activities 2,165.7 (1) As disclosed in Sartorius AG's consolidated financial statements for the year ended December 31, 2023, prepared in accordance with the International Financial Reporting Standards (IFRS), the International Financial Reporting Interpretations Committee (IFRIC) Standards, and the International Accounting Standards Board (IASB) as required to be applied by the European Union, and based upon information publicly disclosed by Sartorius.
At December 31, 2023, we had approximately 8,030 employees, the overwhelming majority of which are full-time employees. Our employees are located throughout the world with roughly 47% in the Americas, 36% in Europe, the Middle-East and Africa, and 17% in Asia Pacific. Our employees work in over 140 locations in 36 different countries around the world.
At December 31, 2024, we had approximately 7,700 employees, the overwhelming majority of which are full-time employees. Our employees are located throughout the world with roughly 48% in the Americas, 35% in Europe, the Middle-East and Africa, and 17% in Asia Pacific. Our employees work in 37 different countries around the world. We are a diverse organization.
A clinical trial is generally required to support a PMA or BLA application and is sometimes required for a 510(k) clearance or a de novo authorization. Conducting clinical trials is a complex and costly activity and frequently requires the use of outsourced resources that specialize in planning and conducting the clinical trial for the medical device manufacturer.
Conducting clinical trials is a complex and costly activity and frequently requires the use of outsourced resources that specialize in planning and conducting the clinical trial for the medical device manufacturer.
For example, a number of our customers, particularly in the Life Science segment, are substantially dependent on government grants and research contracts for their funding. Competition The markets served by our product groups are highly competitive. Our competitors range in size from start-ups to large multinational corporations with significant resources and reach.
For example, a number of our customers, particularly in the Life Science segment, are substantially dependent on government grants and research contracts for their funding. In our Clinical Diagnostic segment, we are constrained by government reimbursement for many of our products. Competition The markets served by our product groups are highly competitive.
Our research teams are continuously developing new products and new applications for existing products. In our development of new products and applications, we interact with scientific and medical professionals at pharma and bio-pharma companies, universities, hospitals and medical schools, and within our industry.
In our development of new products and applications, we interact with scientific and medical professionals at pharma and biopharma companies, universities, hospitals, medical schools, and elsewhere within our industry. In addition, we regularly invest in companies that are engaged in the development of new technologies that either complement or expand our existing portfolio of products.
Many of our products are used in established research techniques, biopharmaceutical production processes and food 3 testing regimes. We are focused on the translational research market segment where our products help accelerate the timelines from discovery in the lab to use in the clinic and with patients.
We are focused on the translational research market segment where our products help accelerate the timelines from discovery in the lab to use in the clinic and with patients. We are a leader in the life sciences market and develop, manufacture and market a broad portfolio of many thousands of products that serve a global customer base.
Raw Materials and Components We utilize a wide variety of chemicals, biological materials, electronic components, machined metal parts, optical parts, computing and peripheral devices.
Raw Materials and Components We utilize a wide variety of chemicals, biological materials, electronic components, machined metal parts, optical parts, computing and peripheral devices. Most of these materials and components are available from numerous sources, and in 2024, we generally have not experienced difficulty in securing adequate supplies. In certain instances, we acquire components and materials from a sole supplier.
We seek to compete primarily in market segments where the technology and efficacy of our products offer customers specific advantages over the competition. Our Life Science segment does not face the same competitors for all of its products due to the breadth of its product lines.
Our competitors range in size from start-ups to large multinational corporations with significant resources and reach. We seek to compete primarily in market segments where the technology and efficacy of our products offer customers specific advantages over the competition.
Compensation and Benefits We provide a competitive total rewards program consisting of broad-based salary and bonus plans as well as annual stock grants to senior management level employees. These programs combine to recognize and reward employees based on individual, group, and overall company performance.
Our differences offer new and unique ideas and perspectives. We foster a work culture that embraces the diverse experience and knowledge of every employee. Compensation and Benefits We provide a competitive total rewards program consisting of broad-based salary and bonus plans as well as annual stock grants to senior level employees.
We compete across a variety of attributes including quality, service and product portfolio. Research and Development We conduct extensive research and development activities in all areas of our business. Research and development has played a major role in Bio-Rad’s growth and is expected to continue to do so in the future.
Research and development has played a major role in Bio-Rad’s growth and is expected to continue to do so in the future. Our research teams are continuously developing new products and new applications for existing products.
For more discussion relating to the impacts of the COVID-19 pandemic and the difficulty of securing adequate supplies, please see “Item 1A, Risk Factors” of this Annual Report. In certain instances, we acquire components and materials from a sole supplier.
For more discussion relating to the risks to our supply of raw materials, including the difficulty of securing adequate supplies, please see “Item 1A, Risk Factors” of this Annual Report. Patents, Trademarks and Licenses We own over 2,150 U.S. and international patents and numerous trademarks.
In addition, we regularly invest in companies that are engaged in the development of new technologies that either complement or expand our existing portfolio of products. We have approximately 1,110 employees worldwide focused on research and development, including degreed scientists, engineers, software developers and other technical support staff.
As of December 31, 2024, we had approximately 950 employees worldwide focused on research and development, including degreed scientists, engineers, software developers and other technical support staff.
The FDA’s 510(k) clearance process requires regulatory competence to execute and usually takes four to nine months, but it can take longer. The FDA’s PMA and BLA processes require extensive regulatory competence to execute and may take one to two years.
The 5 FDA’s 510(k) clearance process requires regulatory competence to execute. The FDA’s PMA and BLA processes also require extensive regulatory competence to execute. A clinical trial is generally required to support a PMA or BLA application and is sometimes required for a 510(k) clearance or a de novo authorization.
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We are a leader in the life sciences market and develop, manufacture and market a broad portfolio of many thousands of products that serve a global customer base. We focus on specific segments of the life sciences market in proteomics (the study of proteins), genomics (the study of genes), biopharmaceutical production, cellular biology and food safety.
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Major competitors for our products in the Clinical Diagnostics segment include Abbott Laboratories, Becton Dickinson, bioMérieux, Danaher, DiaSorin, Werfen, QuidelOrtho, Roche, Siemens Healthineers, Thermo Fisher Scientific and Tosoh. We compete across a variety of attributes including quality, service and product portfolio. Research and Development We conduct extensive research and development activities in all areas of our business.
Removed
Most of these materials and components are available from numerous sources, and while we experienced challenges as a result of the impact of COVID-19 on our suppliers' operations, we are now experiencing more normal supply levels of raw materials and components used in the production of our products.
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These programs combine to recognize and reward employees based on individual, group, and overall company performance.
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Due to the regulatory environment in which we operate, we may be unable to quickly establish additional or replacement sources for some components or materials. Patents, Trademarks and Licenses We own over 2,300 U.S. and international patents and numerous trademarks.
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Diversity, Equity and Inclusion At Bio-Rad, we recognize that diversity is a strength. Our differences offer new and unique ideas and perspectives to our organization. We foster a work culture that embraces the diverse experience and knowledge of every employee, creating an inclusive culture regardless of race, gender, age, sexual orientation, disability, or nationality.
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We have been purposeful in our efforts to hire, develop and retain diverse talent as well as in our efforts to create an inclusive culture. We actively encourage employee engagement and regularly solicit feedback regarding job satisfaction, career growth and development, collaboration, empowerment, ethics, and manager effectiveness.
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We use employee input to help our managers make focused and strategic commitments to improve and sustain engagement in their teams. Bio-Rad requires that all management and employees participate in ongoing training intended to increase awareness of the importance of a diverse and inclusive culture.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

67 edited+13 added−10 removed112 unchanged
Biggest changeOur raw material costs have increased, and we are not always able to recover these increased costs from our customers. Russia’s invasion of Ukraine and sanctions against Russia also are causing disruptions to global economic conditions and are negatively impacting our business in Russia.
Biggest changeRussia’s invasion of Ukraine and sanctions against Russia have caused disruptions to global economic conditions and are negatively impacting our business in Russia. Conflicts in the Middle East have also caused some disruptions to the global business environment (including impacting international logistics), the stability of the Middle East region and our business in that region.
These healthcare laws and regulations include, for example: • the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from soliciting, receiving, offering or providing remuneration, directly or indirectly, in return for or to induce either the referral of an individual for, or the purchase order or recommendation of, any item or services for which payment may be made under a federal healthcare program such as the Medicare and Medicaid programs; 19 • U.S. federal false claims laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent.
These healthcare laws and regulations include, for example: • the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from soliciting, receiving, offering or providing remuneration, directly or indirectly, in return for or to induce either the referral of an individual for, or the purchase order or recommendation of, any item or services for which payment may be made under a federal healthcare program such as the Medicare and Medicaid programs; • U.S. federal false claims laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent.
Although we have discussed this issue with the staff of the SEC and we are comfortable with our position, if it is determined later that the Company may not rely on Section 3(b)(1) or any other exemption under the Investment Company Act and the Company were deemed to be an unregistered investment company, such determination would have a material adverse effect on our business as we would need to register as an investment company and be subject to the regulations of the Investment Company Act which are designed to restrict and regulate mutual funds rather than operating companies.
Although we have discussed this issue with the staff of the SEC and we are comfortable with our position, if it is determined later that the Company may not rely on Section 3(b)(1) or any other exemption under the Investment Company Act and the Company were deemed to be an unregistered investment company, such determination would have a material adverse effect on our business as we would need to register as an investment company and be subject to the regulations of the Investment 13 Company Act which are designed to restrict and regulate mutual funds rather than operating companies.
We cannot assure you, however, that such matters or any future obligations to comply with environmental or health and safety laws and regulations will not adversely affect our business, results of operations or financial condition. 18 In addition, there is an increasing focus by U.S. and international regulators, investors, customers, and other stakeholders on environmental, social and governance (ESG) matters.
We cannot assure you, however, that such matters or any future obligations to comply with environmental or health and safety laws and regulations will not adversely affect our business, results of operations or financial condition. In addition, there is an increasing focus by U.S. and international regulators, investors, customers, and other stakeholders on environmental, social and governance (ESG) matters.
Computer hackers have attempted to penetrate and will likely continue to attempt to penetrate our and our vendors’ information systems and, if successful, could misappropriate confidential customer, supplier, employee or other business information, such as our intellectual property. Third parties could also gain control of our systems and use them for criminal purposes while appearing to be us.
Computer hackers have attempted to penetrate and will likely continue to attempt to penetrate our and our vendors’ information systems and, if successful, could misappropriate confidential customer, supplier, employee or other proprietary business information, such as our intellectual property. Third parties could also gain control of our systems and use them for criminal purposes while appearing to be us.
If these changes in the healthcare markets in the United States and Europe continue, we could be forced to alter our approach in selling, marketing, distributing and servicing our products. 15 We are subject to substantial government regulation, and any changes in regulation or violations of regulations by us could adversely affect our business, prospects, results of operations or financial condition.
If these changes in the healthcare markets in the United States and Europe continue, we could be forced to alter our approach in selling, marketing, distributing and servicing our products. We are subject to substantial government regulation, and any changes in regulation or violations of regulations by us could adversely affect our business, prospects, results of operations or financial condition.
Fair Value Measurements, under the heading “ Level 3 Fair Value Investments ”, we made a loan of 400 million Euros to Sartorius-Herbst Beteiligungen II GmbH in November 2021 that is secured by the pledge of certain trust interests which upon termination of the trust represent the right to receive Sartorius ordinary shares (the "Loan").
Fair Value Measurements and Investments, under the heading “ Level 3 Fair Value Investments ”, we made a loan of 400 million Euros to Sartorius-Herbst Beteiligungen II GmbH in November 2021 that is secured by the pledge of certain trust interests which upon termination of the trust represent the right to receive Sartorius ordinary shares (the "Loan").
Additionally, non-operating income for a period may be significantly impacted by any distribution of dividends by Sartorius AG, particularly when the dividends amount varies in comparison to prior year periods. 13 The value of our position in Sartorius AG might cause us to be deemed an investment company under the Investment Company Act of 1940.
Additionally, non-operating income for a period may be significantly impacted by any distribution of dividends by Sartorius AG, particularly when the dividends amount varies in comparison to prior year periods. The value of our position in Sartorius AG might cause us to be deemed an investment company under the Investment Company Act of 1940.
From time to time, we also must enforce our patents or other intellectual property rights or defend ourselves against claimed infringement of the rights of others through litigation. As a result, we could incur substantial costs, be forced to redesign our products, or be required to pay damages or royalties to an infringed party.
From time to time, we also must enforce our patents or other intellectual property rights or defend ourselves against claimed infringement of the rights of others through litigation. As a result, we could incur substantial costs, be forced to redesign our products, or be required to pay damages or royalties to an infringed 14 party.
Alternatively, if a court were to find the choice of forum provision contained in the Company’s bylaws to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions. Application of the choice of forum provision may be limited in some instances by applicable law.
Alternatively, if a court were to find the choice 21 of forum provision contained in the Company’s bylaws to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions. Application of the choice of forum provision may be limited in some instances by applicable law.
These changes may have unintended consequences, such as distraction of our management and employees, labor unrest, business disruption, disruption of supply, attrition of our workforce, inability to attract or retain key employees, and reduced employee morale or productivity. 14 Risks relating to intellectual property rights may negatively impact our business.
These changes may have unintended consequences, such as distraction of our management and employees, labor unrest, business disruption, disruption of supply, attrition of our workforce, inability to attract or retain key employees, and reduced employee morale or productivity. Risks relating to intellectual property rights may negatively impact our business.
We depend on our IT systems to process orders, manage inventory, pay our vendors and collect accounts receivable. Our IT systems also allow us to efficiently purchase products from our suppliers and ship products to our customers on a timely basis, maintain cost-effective operations and provide customer service.
We depend on our IT systems to 12 process orders, manage inventory, pay our vendors and collect accounts receivable. Our IT systems also allow us to efficiently purchase products from our suppliers and ship products to our customers on a timely basis, maintain cost-effective operations and provide customer service.
Any adverse outcome of such review or examination could have a negative impact on our operating results and financial condition. 17 Economic and political pressures to increase tax revenues in various jurisdictions may make resolving tax disputes more difficult.
Any adverse outcome of such review or examination could have a negative impact on our operating results and financial condition. Economic and political pressures to increase tax revenues in various jurisdictions may make resolving tax disputes more difficult.
Any failure to maintain or implement new or improved internal controls, or any difficulties that we may encounter in their maintenance or implementation, could result in additional material weaknesses, result in material misstatements in our consolidated financial statements and cause us to fail to meet our reporting obligations.
Any failure to maintain or implement new or improved internal controls, or any difficulties that we may encounter in their maintenance or implementation, could result in additional material weaknesses, result in material misstatements in our consolidated financial statements 20 and cause us to fail to meet our reporting obligations.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which includes an Alternative Minimum Tax based on the Adjusted Financial Statement Income of Applicable Corporations. We do not believe the Inflation Reduction Act will have a material impact on our income tax provision and cash taxes, but we continue to monitor U.S.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which included an Alternative Minimum Tax based on the Adjusted Financial Statement Income of Applicable Corporations. We do not believe the Inflation Reduction Act will have a material impact on our income tax provision and cash taxes, but we continue to monitor U.S.
These occurrences could damage or destroy 20 our facilities which may result in interruptions to our business and losses that exceed our insurance coverage.
These occurrences could damage or destroy our facilities which may result in interruptions to our business and losses that exceed our insurance coverage.
Maintaining effective disclosure controls and procedures and internal controls over financial reporting are necessary for us to produce reliable financial statements.
Maintaining effective disclosure controls and procedures and internal control over financial reporting are necessary for us to produce reliable financial statements.
Depending on the extent of the decline or of the increase in the market value of our position in Sartorius AG, these negative or positive impacts on us could be material. Our share price may change significantly based upon changes in the market value of our position in Sartorius AG, independent of the actual performance of our business.
Depending on the extent of the decline or of the increase in the market value of our position in Sartorius AG, these negative or positive impacts on us could continue to be material. Our share price may change significantly based upon changes in the market value of our position in Sartorius AG, independent of the actual performance of our business.
On October 8, 2021, the OECD announced that 136 countries have agreed on a two-pillar framework that would dramatically alter the taxation of multinational enterprises and require that all profits to be subject to a global minimum tax rate of 15%.
On October 8, 2021, the OECD announced that 136 countries have agreed on a two-pillar framework that would dramatically alter the taxation of multinational enterprises and require that all profit be subject to a global minimum tax rate of 15%.
In addition, lack of fuel resources due to geo-political instability (such as Russia’s reduction in energy resources supplied to Western Europe), electricity outages, the inability to operate our production and distribution facilities due to power grid failures or lack of fuel, and strikes or other labor unrest at any of our sites or surrounding areas could cause disruption to our business.
In addition, lack of fuel resources due to geopolitical instability (such as Russia’s reduction in energy resources supplied to Western Europe), electricity outages, the inability to operate our production and distribution facilities due to power grid failures or lack of fuel, and strikes or other labor unrest at any of our sites or surrounding areas could cause disruption to our business.
An event of default under our debt agreements would permit some of our lenders to declare all amounts borrowed from them to be due and payable, together with accrued and unpaid interest. We are subject to healthcare laws and regulations and could face substantial penalties if we are unable to fully comply with such laws.
An event of default under our debt agreements would permit certain of our lenders to declare all amounts borrowed from them to be due and payable, together with accrued and unpaid interest. 19 We are subject to healthcare laws and regulations and could face substantial penalties if we are unable to fully comply with such laws.
General Business Risks Natural disasters, climate related events, terrorist attacks, acts of war or other events beyond our control may cause damage or disruption to us and our employees, facilities, information systems, security systems, vendors and customers, which could significantly impact our business, results of operations and financial condition.
General Business Risks Natural disasters, climate related events, terrorist attacks, acts of war, pandemics, disease outbreaks or other events beyond our control may cause damage or disruption to us and our employees, facilities, information systems, security systems, vendors and customers, which could significantly impact our business, results of operations and financial condition.
See also our risk factors regarding the COVID-19 pandemic, government regulations, and global economic conditions below. The industries and market segments in which we operate are highly competitive, and we may not be able to compete effectively. The life science and clinical diagnostics markets are each highly competitive.
See also our risk factors regarding government regulations and global economic conditions below. The industries and market segments in which we operate are highly competitive, and we may not be able to compete effectively. The life science and clinical diagnostics markets are each highly competitive.
If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from the Medicare and Medicaid programs, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business, results of operations and financial condition.
If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from the Medicare and Medicaid programs or similar government programs in foreign jurisdictions, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business, results of operations and financial condition.
Please carefully consider the following discussion of significant factors, events and uncertainties that make an investment in our securities risky and provide important information for the understanding of the “forward-looking” statements discussed this report. Additional or unforeseen effects from the COVID-19 pandemic and the global economic climate may give rise to or amplify many of these risks discussed below.
Please carefully consider the following discussion of significant factors, events and uncertainties that make an investment in our securities risky and provide important information for the understanding of the “forward-looking” statements discussed in this report. Additional or unforeseen effects from the global economic and geopolitical climate may give rise to or amplify many of these risks discussed below.
We may incur losses in future periods due to write-downs in the value of financial instruments. We have positions in a variety of financial instruments including asset backed securities and other similar investments. Financial markets are volatile and the markets for these securities can be illiquid.
We have incurred and may continue to incur losses in future periods due to write-downs in the value of our financial instruments. We have positions in a variety of financial instruments including asset backed securities and other similar investments. Financial markets are volatile and the markets for these securities can be illiquid.
Financial markets are volatile and the markets for these equity securities can be illiquid as well. A decline in the market value of our investments in equity securities could result in significant losses due to write-downs in the value of the equity securities.
Financial markets are volatile and the markets for these equity securities can be illiquid as well. A decline in the market value of our investments in equity securities has resulted and could continue to result in significant losses due to write-downs in the value of the equity securities.
A weakening of macroeconomic conditions is also adversely affecting our suppliers, which could continue to result in interruptions in the supply of components and raw materials necessary for our products and raw material cost increases. Additionally, the United States and other countries, such as China and India, have imposed tariffs on certain goods.
A weakening of macroeconomic conditions is also adversely affecting our suppliers, which could continue to result in interruptions in the supply of components and raw materials necessary for our products and raw material cost increases. Additionally, the United States and other countries have imposed tariffs on certain goods.
The bank failures in March 2023 and the resulting volatility in the banking sector did cause and could continue to cause disruptions to global economic conditions and may impact access to cash and other financial resources by our customers and suppliers.
The bank failures in March 2023 and the resulting volatility in the banking sector caused and could continue to cause disruptions to global economic conditions and may impact access to cash and other financial resources by us, our customers and our suppliers.
Some of our products (primarily our Clinical Diagnostic products), production processes and marketing are subject to U.S. federal, state and local, and foreign regulation, including by the FDA in the United States and its foreign counterparts.
Some of our products (primarily our Clinical Diagnostic products), production processes and marketing are subject to U.S. federal, state and local, and foreign regulation, including by the Food and Drug Administration ("FDA") in the United States and its foreign counterparts.
In addition, the adoption of some or all of the recommendations set forth in the Organization for Economic Co-operation and Development’s project on “Base Erosion and Profit Shifting” (BEPS) by tax authorities in the countries in which we operate, could negatively impact our effective tax rate.
In addition, the adoption of some or all of the recommendations set forth in the Organization for Economic Co-operation and Development ("OECD")’s project on “Base Erosion and Profit Shifting” ("BEPS") by tax authorities in the countries in which we operate, could negatively impact our effective tax rate.
We made significant changes to our organizational structure over the past few years, including the reorganization of aspects of our European operations that was announced in February 2021 and restructurings that management approved in 2023.
We made significant changes to our organizational structure over the past few years, including the reorganization of aspects of our European operations that was announced in February 2021 and additional restructurings approved in 2023, 2024, and 2025.
In addition, we have a revolving credit facility that provides for up to $200.0 million in borrowing capacity, $0.2 million of which was utilized for domestic standby letters of credit as of December 31, 2023. Our incurrence of substantial amounts of debt may have important consequences.
In addition, we have a revolving credit facility that provides for up to $200.0 million in borrowing capacity, $5.7 million of which was utilized for domestic standby letters of credit as of December 31, 2024. Our incurrence of substantial amounts of debt may have important consequences.
We have direct distribution channels in over 35 countries outside the United States, and during the twelve months ended December 31, 2023 our foreign entities genera ted 58% of our net sales. Compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business.
We have direct distribution channels in over 36 countries outside the United States, and during the twelve months ended December 31, 2024 our foreign entities genera ted 59% of our net sales. Compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business.
Given the high level of complexity of the foreign and U.S. laws and regulations that apply to our international operations, we may inadvertently breach some provisions, for example, through fraudulent or negligent behavior of individual employees, our failure to comply with certain formal documentation requirements, or otherwise.
Given the high level of complexity of the foreign and U.S. laws and regulations that apply to our international operations, we cannot guarantee that we have not or will not inadvertently breach some provisions, for example, through fraudulent or negligent behavior of individual employees, our failure to comply with certain formal documentation requirements, or otherwise.
Our operations and ability to process sales orders, particularly through our eCommerce channels, 12 could also be disrupted, as they were in the December 2019 Cyberattack. Any significant breakdown, intrusion, interruption, corruption, or destruction of our systems, as well as any data breaches, could have a material adverse effect on our business and results of operations.
Our operations and ability to process sales orders, particularly through our eCommerce channels, could also be disrupted, as they have been in the past. Any significant breakdown, intrusion, interruption, corruption, or destruction of our systems, as well as any data breaches, could have a material adverse effect on our business and results of operations.
If the FDA determines that we have failed to comply with applicable regulatory requirements, it can impose a variety of enforcement actions ranging from public warning letters, fines, injunctions, consent decrees and civil penalties to suspension or delayed issuance of approvals, seizure or recall of our products, total or partial shutdown of production, withdrawal of approvals or clearances already granted, and criminal prosecution.
If the FDA determines that we have failed to comply with applicable regulatory requirements, it can impose a variety of enforcement actions ranging from public warning letters, fines, injunctions, consent decrees and civil penalties to suspension or delayed issuance of approvals, seizure or recall of our products, total or partial shutdown of production, withdrawal of approvals or clearances already granted, and criminal prosecution. 15 The FDA can also require us to repair, replace or refund the cost of devices that we manufactured or distributed.
Acts of terrorism, bioterrorism, violence or war (such as Russia's invasion of Ukraine and the conflict between Israel and Hamas), weather-related events, or public health issues such as the outbreak of a contagious disease like COVID-19 could also affect the markets in which we operate, our business operations and strategic plans.
Acts of terrorism, bioterrorism, violence or war (such as Russia's invasion of Ukraine and the recent escalation of conflicts in the Middle East), weather-related events, or public health issues such as pandemics and the outbreak of a contagious disease like COVID-19 could also affect the markets in which we operate, our business operations and strategic plans.
If we are unable to integrate technological advances into our product offerings or to design, develop, manufacture and market new products successfully and in a timely manner, our business, results of operations and financial condition will be adversely affected.
If we are unable to integrate technological advances into our product offerings or to design, develop, manufacture and market new products successfully and in a timely manner, our business, results of operations and financial condition will be adversely affected. Supply chain disruptions have caused some delays to our ability to develop and introduce new products.
Our stockholders will not be deemed, by operation of the Company’s choice of forum provision, to have waived claims arising under the federal securities laws and the rules and regulations thereunder. 21
Our stockholders will not be deemed, by operation of the Company’s choice of forum provision, to have waived claims arising under the federal securities laws and the rules and regulations thereunder. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
When our supply is reduced or interrupted or of poor quality, and we are unable to develop alternative sources for such supply, our ability to manufacture our products in a timely or cost-effective manner is adversely affected, which affects our ability to sell our products. See also our risk factor regarding the COVID-19 pandemic below.
When our supply is reduced or interrupted or of poor quality, and we are unable to develop alternative sources for such supply, our ability to manufacture our products in a timely or cost-effective manner is adversely affected, which affects our ability to sell our products.
In addition, due to the regulatory environment in which we operate, we may need to cease use of certain essential components and materials and be unable to establish acceptable replacement sources for such components or materials.
We have experienced raw material cost increases, some of which will likely continue. In addition, due to the regulatory environment in which we operate, we may need to cease use of certain essential components and materials and be unable to establish acceptable replacement sources for such components or materials.
We have substantial debt and have the ability to incur additional debt. As of December 31, 2023, we had approximately $1.2 billion of outstanding long-term indebtedness, primarily consisting of the 3.300% Senior Notes due in March 2027 and the 3.700% Senior Notes due in March 2032 as further discussed in Note 6 of the consolidated financial statements.
As of December 31, 2024, we had approximately $1.2 billion of outstanding long-term indebtedness, primarily consisting of the 3.3% Senior Notes due in March 2027 and the 3.7% Senior Notes due in March 2032 as further discussed in Note 6 of the consolidated financial statements.
Failure to adequately meet our stakeholder’s expectations or comply with any such laws or regulations may result in loss of business, reputational damage, an inability to attract customers, an inability to attract and retain top talent, and a negative impact on our business, results of operations and financial condition.
Failure to adequately meet our stakeholder’s expectations or comply with any such laws or regulations may result in loss of business, reputational damage, an inability to attract customers, an inability to attract and retain top talent, and a negative impact on our business, results of operations and financial condition. 18 We also have announced certain sustainability goals, which require ongoing investment and operational changes.
As part of our overall business strategy, we pursue acquisitions of and investments in complementary companies, products and technologies. The benefits of any acquisition or investment may prove to be less than anticipated and may not outweigh the costs reported in our financial statements. Completing any potential future acquisitions could cause significant diversion of our management’s time and resources.
The benefits of any acquisition or investment may prove to be less than anticipated, which we have experienced in some of our acquisitions and investments, and may not outweigh the costs reported in our financial statements. Completing any potential future acquisitions could cause significant diversion of our management’s time and resources.
On December 22, 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) which made a number of substantial changes to how the United States imposes income tax on multinational corporations.
Changes in tax laws or rates, changes in the interpretation of tax laws or changes in the jurisdictional mix of our earnings could adversely affect our financial position and results of operations. 17 On December 22, 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) which made a number of substantial changes to how the United States imposes income tax on multinational corporations.
The EU in-vitro Diagnostics Regulation (the “EU IVDR”) includes broad changes regarding in vitro diagnostic devices and medical devices. The EU IVDR required us to modify or re-register some products, and we expect will continue to result in additional costs for ongoing compliance.
The EU IVDR required us to modify or re-register some products, and we expect will continue to result in additional costs for ongoing compliance.
On December 15, 2022, the European Union formally adopted the Pillar Two Directive and EU member states were expected to enact the Pillar Two Directive by December 31, 2023. Other countries are taking similar actions. We do not believe Pillar 2 legislation will have a material impact on our income tax provision and cash taxes.
On December 15, 2022, the European Union formally adopted the Pillar Two Directive and EU member states enacted the Pillar Two Directive as of January 1, 2024. Other countries have taken similar actions. We currently believe Pillar 2 legislation will not have a material impact on our income tax provision and cash taxes.
As a result of the market value of our position in Sartorius AG, we might be deemed to be an “investment company” under Section 3(a)(1)(C) of the Investment Company Act of 1940, as amended (the “Investment Company Act”) The Company does not believe it is an investment company primarily in reliance on Section 3(b)(1) of the Investment Company Act because we are “primarily engaged” in a business other than that of investing, reinvesting, owning, holding or trading in securities.
The Company does not believe it is an investment company primarily in reliance on Section 3(b)(1) of the Investment Company Act because we are “primarily engaged” in a business other than that of investing, reinvesting, owning, holding or trading in securities.
In addition, a significant decline in the value of the Sartorius ordinary shares would reduce the value of the collateral for the Loan discussed in the previous paragraph, and in such circumstances the value of the collateral may be insufficient to cover the repayment of the Loan, and Sartorius-Herbst Beteiligungen II GmbH will likely have no other assets from which to repay the Loan.
The value of the collateral may be insufficient to cover the repayment of the Loan if the decline in value continues, and Sartorius-Herbst Beteiligungen II GmbH will likely have no other assets from which to repay the Loan.
The COVID-19 pandemic created delays and shortages in the supply of components and raw materials. These shortages, along with challenges in ramping up new production facilities, caused a backlog of sales orders, some of which we consider to be significant, and delays in certain new product development activities.
These shortages, along with challenges in ramping up new production facilities, caused a backlog of sales orders, some of which we consider to be significant, and delays in certain new product development activities. Some of the backlog of sales orders continued into 2023 but moderated in 2024 to a more typical level.
If the results forecast in our impairment tests are not achieved, or business trends vary from the assumptions used in forecasts, or external factors change detrimentally, future impairment losses may occur, as they have occurred in the past. Increased antitrust enforcement and greater government scrutiny of mergers in the healthcare sector may impact our ability to consummate acquisitions.
If the results forecast in our impairment tests are not achieved, or business trends vary from the assumptions used in forecasts, or external factors change detrimentally, future impairment losses may occur, as they have occurred in the past, which may result in some volatility to our consolidated statements of income (loss).
Failure to comply with present or future laws and regulations could result in substantial liability to us, suspension or cessation of our operations, restrictions on our ability to expand at our present locations or require us to make significant capital expenditures or incur other significant expenses. 16 We cannot assure you that we will be able to integrate acquired companies, products or technologies into our company successfully, or that we will be able to realize the anticipated benefits from the acquisitions.
Failure to comply with present or future laws and regulations could result in substantial liability to us, suspension or cessation of our operations, restrictions on our ability to expand at our present locations or require us to make significant capital expenditures or incur other significant expenses.
In addition, we expect moderating economic growth and changing government policies in China will continue to affect our commercial opportunities in the country.
It is unknown how long any of these disruptions will continue and whether such disruptions will become more severe. In addition, we expect moderating economic growth and changing government policies in China will continue to affect our commercial opportunities in the country.
The capital spending programs of these institutions and companies have a significant effect on the demand for our products.
Our customers include universities, clinical diagnostics laboratories, government agencies, hospitals and pharmaceutical, biotechnology and chemical companies. The capital spending programs of these institutions and companies have a significant effect on the demand for our products.
Regulatory enforcement or inquiries, or other increased scrutiny on us, could affect the perceived safety and efficacy of our products and dissuade our customers from using our products.
Regulatory enforcement or inquiries, or other increased scrutiny on us, could affect the perceived safety and efficacy of our products and dissuade our customers from using our products. The FDA has issued a final rule applicable to certain clinical diagnostic products referred to as laboratory developed tests.
We believe that any of the following risks could have a material effect on our business, results of operations or financial condition, our industry or the trading price of our common stock. We operate in a continually changing business environment, and new risks and uncertainties emerge from time to time.
We believe that any of the following risks (some of which have occurred and any of which may occur in the future) could have a material adverse effect on our business, results of operations or financial condition, our industry, the value of our equity holdings, or the trading price of our common stock.
Further escalation of tariffs or other trade barriers could adversely impact our profitability and/or our competitiveness. See also our risk factors regarding our international operations above and regarding the COVID-19 pandemic and government regulations below.
Further escalation of tariffs or other trade barriers could adversely impact our profitability and/or our competitiveness. See also our risk factors regarding our international operations above and regarding government regulations below. Reductions in government funding and the capital spending programs of our customers could have a material adverse effect on our business, results of operations or financial condition.
The manufacture of our products requires the timely delivery of sufficient amounts of quality components and materials. We manufacture our products in numerous manufacturing facilities around the world. We acquire our components and materials from many suppliers in various countries.
The manufacture of our products requires the timely delivery of sufficient amounts of quality components and materials. We manufacture our products around the world. We acquire our components and materials from many suppliers in various countries. We work closely with our suppliers to ensure the continuity of supply, but we cannot guarantee these efforts will always be successful.
Many foreign governments have similar rules and regulations regarding the importation, registration, labeling, sale and use of our products. Such agencies may also impose new requirements that may require us to modify or re-register products already on the market or otherwise impact our ability to market our products in those countries.
Such agencies may also impose new requirements that may require us to modify or re-register products already on the market or otherwise impact our ability to market our products in those countries. The EU in-vitro Diagnostics Regulation (the “EU IVDR”) includes broad changes regarding in vitro diagnostic devices and medical devices.
Also, if we need to convert these positions to cash, we may not be able to sell these equity securities without significant losses.
Also, if we need to convert these positions to cash, we may not be able to sell these equity securities without significant losses. In addition, significant declines in the value of the Sartorius ordinary shares have reduced the value of the collateral for the Loan discussed in the previous paragraph.
We work closely with our suppliers to ensure the continuity of supply, but we cannot guarantee these efforts will always be successful. Further, while we seek to diversify our sources of components and materials, in certain instances we acquire components and materials from a sole supplier.
Further, while we seek to diversify our sources of components and materials, in certain instances we acquire components and materials from a sole supplier. The COVID-19 pandemic created delays and shortages in the supply of components and raw materials.
If we do not offer competitive compensation and benefits, we may fail to retain or attract a sufficient number of qualified personnel, which could impair our ability to properly run our business. We may have higher than anticipated tax liabilities. We are subject to income taxes in the United States and many foreign jurisdictions.
If we do not offer competitive compensation and benefits, we may fail to retain or attract a sufficient number of qualified personnel, which could impair our ability to properly run our business. Further, our ability to successfully execute organizational changes, including management transitions within our senior leadership team, are critical to our business success.
We cannot assure you that our product and process development efforts will be successful or that new products we introduce will achieve market acceptance. Failure to launch successful new products or improvements to existing products may cause our products to become obsolete, which could harm our business, results of operations and financial condition.
We have experienced product launch delays in the past and may do so in the future. We cannot assure you that our product and process development efforts will be successful or that new products we introduce will achieve market acceptance.
Global economic and geopolitical conditions could adversely affect our operations. In recent years, we have been faced with challenging global economic conditions. U.S. and international markets have experienced inflationary pressures, and inflation rates in the U.S. and in other countries in which we operate have been at elevated levels.
U.S. and international markets have experienced inflationary pressures, and inflation rates in the U.S. and in other countries in which we operate have been at elevated levels. Our raw material costs have increased, and we are not always able to recover these increased costs from our customers.
We have experienced and expect to continue to experience attempts by individuals and organizations to attack and penetrate our layered security controls, like the December 2019 Cyberattack that was previously discussed in Item 7 of our Annual Report for the period ended December 31, 2019.
Breaches of our information systems could have a material adverse effect on our business and results of operations. We have experienced and expect to continue to experience attempts by individuals and organizations to attack and penetrate our layered security controls.
We also have announced certain sustainability goals, which require ongoing investment and operational changes. Our efforts may not achieve their intended outcomes, and we may not achieve such goals, which could negatively impact our reputation and business. Our current and future debt and related covenants may restrict our future operations.
Our efforts may not achieve their intended outcomes, and we may not achieve such goals, which could negatively impact our reputation and business. Use of generative AI and other AI technologies presents risks and challenges due to the evolving nature of AI.
Removed
Supply chain disruptions, including those caused by the COVID-19 pandemic, have caused some delays to our ability to develop and introduce new products. We have experienced product launch delays in the past and may do so in the future.
Added
We operate in a continually changing business environment, and new risks and uncertainties emerge from time to time.
Removed
The escalation, in October 2023, of the conflict between Israel and Hamas also has caused some disruptions to the global business environment (including impacting international logistics), the stability of the Middle East region and our business in that region. It is unknown how long any of these disruptions will continue and whether such disruptions will become more severe.
Added
Failure to launch successful new products or improvements to existing products may cause our products to become obsolete, which could harm our business, results of operations and financial condition. Global economic and geopolitical conditions could adversely affect our operations. In recent years, we have been faced with challenging global economic conditions.
Removed
Reductions in government funding and the capital spending programs of our customers could have a material adverse effect on our business, results of operations or financial condition. Our customers include universities, clinical diagnostics laboratories, government agencies, hospitals and pharmaceutical, biotechnology and chemical companies.
Added
As a result of the market value of our position in Sartorius AG, we might be deemed to be an “investment company” under Section 3(a)(1)(C) of the Investment Company Act of 1940, as amended (the “Investment Company Act”).
Removed
Some of the backlog of sales orders continued into 2023, but has now moderated to a more typical level. We have experienced raw material cost increases, some of which will likely continue.
Added
This change in the FDA approach could negatively impact our customers who use our Life Science products for laboratory developed tests. Many foreign governments have similar rules and regulations regarding the importation, registration, labeling, sale and use of our products.
Removed
Pandemics or disease outbreaks, such as the COVID-19 pandemic, have affected and could materially adversely affect our business, operations, financial condition and results of operations.
Added
We cannot assure you that we will be able to integrate acquired companies, products or technologies into our company successfully, or that we will be able to realize the anticipated benefits from the acquisitions. As part of our overall business strategy, we pursue acquisitions of and investments in complementary companies, products and technologies.
Removed
The COVID-19 pandemic has had, and similar outbreaks could again have, an adverse effect on the United States and global economies, as well as on aspects of our business, operations and financial condition and those of third parties on whom we rely.
Added
Increased antitrust enforcement and greater government scrutiny of 16 mergers in the healthcare sector may impact our ability to consummate acquisitions.
Removed
If a new pandemic were to occur, we expect that parts of our business could again suffer negative impacts, and that our customers, suppliers, logistics providers, and the global economy could also be negatively impacted. Breaches of our information systems could have a material adverse effect on our business and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents in the past three fiscal years, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Biggest changeWe have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents in the past fiscal year, that have materially affected or are reasonably likely to materially affect us, 22 including our operations, business strategy, results of operations, or financial condition.
Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for critical service providers, suppliers, and vendors.
Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process to oversee critical service providers, suppliers, and vendors.
The Committee oversees management’s implementation of our cybersecurity risk management program. 22 The Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
For more information about our cybersecurity related risks, see Part 1, Item 1A, Risk Factors under the risks titled "Breaches of our information systems could have a material adverse effect on our business and results of operations" and "If our information technology systems are disrupted, or if we fail to successfully implement, manage and integrate our information technology and reporting systems, our business, results of operations and financial condition could be harmed." Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Legal and Regulatory Compliance Committee (Committee) oversight of cybersecurity and other information technology risks.
For more information about our cybersecurity related risks, see Part I, Item 1A, Risk Factors under the risks titled "Breaches of our information systems could have a material adverse effect on our business and results of operations" and "If our information technology systems are disrupted, or if we fail to successfully implement, manage and integrate our information technology and reporting systems, our business, results of operations and financial condition could be harmed." Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Legal and Regulatory Compliance Committee ("Committee") oversight of cybersecurity and other information technology risks.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeThe principal manufacturing and research locations for each segment are as follows: 23 Segment Location Owned/Leased Life Science Boulder, Colorado Leased Oxford, England Leased Neuried, Germany Leased Shanghai, China Leased Suzhou, China Leased Clinical Diagnostics Irvine, California Leased Greater Seattle Area, Washington Leased Warsaw, Poland Leased Cressier, Switzerland Owned/Leased Dreieich, Germany Owned/Leased Shared Greater San Francisco Bay Area, California Owned/Leased Ann Arbor, Michigan Leased Greater Paris Area, France Leased Lille, France Owned Leipzig, Germany Leased Singapore, Singapore Leased Most manufacturing and research facilities also house administration, sales and distribution activities.
Biggest changeThe principal manufacturing and research locations for each segment are as follows: 23 Segment Location Owned/Leased Life Science Boulder, Colorado Leased Oxford, England Leased Neuried, Germany Leased Shanghai, China Leased Suzhou, China Leased Clinical Diagnostics Irvine, California Leased Greater Seattle Area, Washington Leased Warsaw, Poland Leased Cressier, Switzerland Owned Dreieich, Germany Owned/Leased Shared Greater San Francisco Bay Area, California Owned/Leased Ann Arbor, Michigan Leased Greater Paris Area, France Leased Lille, France Owned Leipzig, Germany Leased Singapore Leased Most manufacturing and research facilities also house administration, sales and distribution activities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−3 removed0 unchanged
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May yet be Purchased Under the Plans or Programs (in millions) October 1 to October 31, 2023 — — — $ 487.7 November 1 to November 30, 2023 659,416 $ 303.30 — $ 278.7 December 1 to December 31, 2023 — — — $ 278.7 See Item 12 of Part III of this report for the security ownership of certain beneficial owners and management and for securities authorized for issuance under equity compensation plans.
Biggest changeAs of December 31, 2024, $577.1 million remained available for repurchases under the 2023 Share Repurchase Program. See Item 12 of Part III of this report for the security ownership of certain beneficial owners and management and for securities authorized for issuance under equity compensation plans.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Information Concerning Common Stock Bio-Rad’s Class A and Class B Common Stock are listed on the New York Stock Exchange with the ticker symbols BIO and BIO.B, respectively. 24 On February 13, 2024, we had 147 holders of record of Class A Common Stock and 85 holders of record of Class B Common Stock.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Information Concerning Common Stock Bio-Rad’s Class A and Class B Common Stock are listed on the New York Stock Exchange with the ticker symbols BIO and BIO.B, respectively. 24 On February 11, 2025, we had 144 holders of record of Class A Common Stock and 82 holders of record of Class B Common Stock.
Bio-Rad has never paid a cash dividend and has no present plans to pay cash dividends. In November 2017, the Board of Directors authorized a share repurchase program ("2017 Share Repurchase Program"), granting the Company authority to repurchase, on a discretionary basis, up to $250.0 million of outstanding shares of our common stock.
Bio-Rad has never paid a cash dividend and has no present plans to pay cash dividends. In July 2023, the board of directors authorized a new share repurchase program ("2023 Share Repurchase Program") granting the Company authority to repurchase, on a discretionary basis, up to $500 million of the outstanding shares of the Company's common stock.
In July 2023, the board of directors authorized a new share repurchase program ("2023 Share Repurchase Program") granting the Company authority to repurchase, on a discretionary basis, up to $500 million of the outstanding shares of the Company’s common stock. As of December 31, 2023, $278.7 million remained available under the 2023 Share Repurchase Program.
In July 2024, the board of directors granted the Company authority to repurchase, on a discretionary basis, up to an additional $500 million of the outstanding shares of the Company’s common stock under the 2023 Share Repurchase Program. During the three months ended December 31, 2024, we did not purchase or otherwise acquire any shares of common stock.
Stock Performance Graph The following graph compares the cumulative stockholder returns over the past five years for our Class A Common Stock, the S&P 500 Index and S&P 500 Life Sciences Tools & Services Index, assuming $100 invested on December 31, 2018, and reinvestment of dividends if paid: 25 This stock performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference into any filing under the Securities Act or the Exchange Act, and shall not otherwise be deemed filed under these Acts.
Stock Performance Graph The following graph compares the cumulative stockholder returns over the past five years for our Class A Common Stock, the S&P 500 Index, the S&P MidCap 400 Index, and the S&P 500 Life Sciences Tools & Services Index, assuming $100 invested on December 31, 2019, and reinvestment of dividends if paid: (1) As a result of an S&P 500 Index rebalance, we have been moved from the S&P 500 Index to the S&P MidCap 400 Index and, thus, are presenting both the S&P MidCap 400 Index and the S&P 500 Index for this year of transition.
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In both July 2020 and July 2022, the Board of Directors authorized increasing the 2017 Share Repurchase Program to allow the Company to purchase up to an additional $200.0 million of stock, for a total authorization of $650.0 million of stock.
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This stock performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference into any filing under the Securities Act or the Exchange Act and shall not otherwise be deemed filed under these Acts. ITEM 6. RESERVED
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As of December 31, 2023, the Company had repurchased $650.0 million under the 2017 Share Repurchase Program, which completed the level of authorized purchases under that share repurchase program.
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The following table contains information on the shares of our common stock that we purchased or otherwise acquired during the three months ended December 31, 2023.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Reserved 26 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33 Item 8. Financial Statements and Supplementary Data 35 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 83
Biggest changeItem 6. Reserved 25 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 32 Item 8. Financial Statements and Supplementary Data 34 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 80

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNet cash used in financing activities was $425.6 million compared to net cash provided by financing activities of $973.6 million for the years ended December 31, 2023 and 2022, respectively, primarily attributable to the sale in March 2022 of the Senior Notes which yielded net cash proceeds of $1,186.2 million.
Biggest changeCash Flows from Financing Activities Our financing activities have consisted primarily of cash used for stock related activity, including the issuance of common stock and repurchases of treasury stock. Net cash used in financing activities was $218.8 million and $425.6 million for the years ended December 31, 2024 and 2023, respectively.
These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheet. We assess the likelihood that our deferred tax assets will be recovered from future taxable income, considering all available evidence such as historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax strategies.
These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheet. 26 We assess the likelihood that our deferred tax assets will be recovered from future taxable income, considering all available evidence such as historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax strategies.
We are a multinational manufacturer and worldwide distributor of our own life science research and clinical diagnostics products. Our business is organized into two reportable segments, Life Science and Clinical Diagnostics, with the mission to provide scientists with specialized tools needed for biological research and health care specialists with products needed for clinical diagnostics.
We are a multinational developer, manufacturer and worldwide distributor of our own life science research and clinical diagnostics products. Our business is organized into two reportable segments: Life Science and Clinical Diagnostics, with the mission to provide scientists with specialized tools needed for biological research and health care specialists with products needed for clinical diagnostics.
All subsequent changes in fair value of the Loan and value appreciation right, including accrued interest are recognized in (Gains) losses from change in fair market value of equity securities and loan receivable in our consolidated statements of income (loss).
All subsequent changes in fair value of the Loan and value appreciation right, including accrued interest are recognized in Losses from change in fair market value of equity securities and loan receivable in our consolidated statements of income (loss).
The significant assumptions used to estimate fair value of the Loan include an estimate of the discount rate and cash flows of the Loan and the significant assumptions used to estimate the fair value of the value appreciation right include volatility, the risk-free interest rate, expected life (in years) and expected dividend.
The significant assumptions used to estimate fair value of the Loan include an estimate of the discount rate and cash flows of the Loan and the 27 significant assumptions used to estimate the fair value of the value appreciation right include volatility, the risk-free interest rate, expected life (in years) and expected dividend.
Foreign currency exchange gains and losses 29 Foreign currency exchange (gains) and losses consist primarily of foreign currency transaction gains and losses on intercompany net receivables and payables and the change in fair value of our forward foreign exchange contracts used to manage our foreign currency exchange risk.
Foreign currency exchange (gains) losses Foreign currency exchange (gains) losses, net consist primarily of foreign currency transaction gains and losses on intercompany net receivables and payables and the change in fair value of our forward foreign exchange contracts used to manage our foreign currency exchange risk.
See Note 6 of the consolidated financial statements for additional information about our debt. (2) Operating lease obligations are described in Note 17 of the consolidated financial statements. (3) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding to Bio-Rad and that specify all significant terms.
See Note 6 of the consolidated financial statements for additional information about our debt. (2) Operating lease obligations are described in Note 16 of the consolidated financial statements. (3) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding to Bio-Rad and that specify all significant terms.
There were no impairments for the years ended December 31, 2023, 2022 and 2021. Revenue Recognition We recognize revenue from operations through the sale of products, services, license of intellectual property and rental of instruments. 27 We enter into contracts that can include various combinations of products and services, which are generally accounted for as distinct performance obligations.
There were no impairments for the years ended December 31, 2024, 2023 and 2022. Revenue Recognition We recognize revenue from operations through the sale of products, services, license of intellectual property and rental of instruments. We enter into contracts that can include various combinations of products and services, which are generally accounted for as distinct performance obligations.
Excluded from this table are tax liabilities for uncertain tax positions and contingencies in the amount of $76.5 million. We are not able to reasonably estimate the timing of future cash flows of these tax liabilities, therefore, our income tax obligations are excluded from the table above.
Excluded from this table are tax liabilities for uncertain tax positions and contingencies in the amount of $81.1 million. We are not able to reasonably estimate the timing of future cash flows of these tax liabilities, therefore, our income tax obligations are excluded from the table above.
Foreign currency exchange net gains were $7.3 million and $0.2 million for the years ended December 31, 2023 and December 31, 2022, respectively. Gains and losses are primarily due to the estimating process inherent in the timing of product shipments and intercompany debt payments, market volatility, and the change in the fair value of our foreign exchange contracts.
Foreign currency exchange net gains were $3.9 million and $7.3 million for the years ended December 31, 2024 and December 31, 2023, respectively. Gains and losses are primarily due to the estimating process inherent in the timing of product shipments and intercompany debt payments, market volatility, and the change in the fair value of our foreign exchange contracts.
Management believes that this availability, together with cash flow from operations, will be adequate to meet our current objectives for operations, research and development, capital additions for manufacturing and distribution, plant and equipment, information technology systems and acquisitions of reasonable proportion to our existing total available capital.
Management believes that this availability, together with cash flow from operations, will be adequate to meet our current objectives for operations, research and development, capital additions for manufacturing and distribution, plant and equipment, information technology systems and acquisitions of reasonable proportion to our existing total available capital for the next twelve months and beyond.
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed on February 17, 2023, for the discussion of the comparison of the fiscal year ended December 31, 2022 to the fiscal year ended December 31, 2021. Overview .
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on February 16, 2024, for the discussion of the comparison of the fiscal year ended December 31, 2023 to the fiscal year ended December 31, 2022. 25 Overview .
Upon reissuing the Class A treasury stock, Additional paid-in capital was reduced by $51.8 million from share reissuance activity during the year. The re-issuance of the treasury stock for the years ended December 31, 2023 and 2022 did not require cash payments or receipts and therefore did not affect liquidity.
Upon reissuing the Class A treasury stock, Additional paid-in capital was reduced by $49.7 million from share reissuance activity during the year. The re-issuance of the treasury stock for the years ended December 31, 2024 and 2023 did not require cash payments or receipts and therefore did not affect liquidity.
As of December 31, 2023, based on the expected outcome of certain examinations or as a result of the expiration of statutes of limitation for certain jurisdictions, we believe that within the next twelve months it is reasonably possible that our previously unrecognized tax benefits could decrease by approximately $17.2 million.
As of December 31, 2024, based on the expected outcome of certain examinations or as a result of the expiration of statutes of limitation for certain jurisdictions, we believe that within the next twelve months it is reasonably possible that our previously unrecognized tax benefits could decrease by approximately $18.1 million.
In addition to the annual positive cash flow from operating activities, additional liquidity is readily available via the sale of short-term investments and access to our $200.0 million unsecured revolving credit facility (Credit Agreement, as amended) that we entered into in April 2019, and to a lesser extent international lines of credit.
In addition to the annual positive cash flow from operating activities, additional liquidity is readily available via the sale of short-term investments and access to our $200.0 million unsecured Revolving Credit Agreement that we entered into in February 2024, and to a lesser extent international lines of credit.
See Note 7 of the consolidated financial statements for additional information about our income taxes. Recent Accounting Pronouncements Adopted See Note 1 to the consolidated financial statements for recent accounting pronouncements adopted and to be adopted.
See Note 7 of the consolidated financial statements for additional information about our income taxes. See Note 13 of the consolidated financial statements for additional information about these purchase obligations. Recent Accounting Pronouncements Adopted See Note 1 to the consolidated financial statements for recent accounting pronouncements adopted and to be adopted.
The current global economic outlook is still uncertain as the need to control government social spending by many governments limits opportunities for growth. Approximately 42% of our 2023 consolidated net sales are derived from the United States and approximately 58% are derived from international locations, with Europe being our largest international region.
The current global economic outlook is still uncertain as the need to control social spending by many governments limits opportunities for growth. Approximately 41% of our 2024 consolidated net sales are derived from the United States and approximately 59% are derived from international locations, with Europe being our largest international region.
Upon reissuing the Class A treasury stock, Additional paid-in capital was reduced by $49.7 million from share reissuance activity during the year.
Upon reissuing the Class A treasury stock, Additional paid-in capital was reduced by $48.2 million from share reissuance activity during the year.
As of December 31, 2023, $278.7 million of stock remained available for repurchases under the Company's 2023 Share Repurchase Program. We designated these repurchased shares as treasury stock.
As of December 31, 2024, $577.1 million of stock remained available for repurchases under the Company's 2023 Share Repurchase Program. We designated these repurchased shares as treasury stock.
Results of Operations - Sales, Gross Margins and Expenses Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 The following shows cost of goods sold, gross profit, expense items and net income as a percentage of net sales: 2023 2022 Net sales 100.0 % 100.0 % Cost of goods sold 46.6 44.1 Gross profit 53.4 55.9 Selling, general and administrative expense 31.5 29.5 Research and development expense 9.3 9.2 Net loss (23.9) (129.5) Net sales Percentage sales growth in currency neutral amounts are calculated by translating prior period sales in each local currency using the current period monthly average foreign exchange rates for that currency and comparing that to current period sales.
Results of Operations - Sales, Gross Margins and Expenses Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 The following table shows Cost of goods sold, Gross profit, components of operating expense, and Net loss as a percentage of Net sales: 2024 2023 Net sales 100.0 % 100.0 % Cost of goods sold 46.3 46.6 Gross profit 53.7 53.4 Selling, general and administrative expense 31.7 31.5 Research and development expense 11.5 9.3 Net loss (71.9) (23.9) Net sales Percentage sales growth in currency neutral amounts are calculated by translating prior period sales in each local currency using the current period monthly average foreign exchange rates for that currency and comparing that to current period sales.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which includes an Alternative Minimum Tax based on the Adjusted Financial Statement Income of Applicable Corporations. Based on our initial evaluation, we do not believe the Inflation Reduction Act will have a material impact on our income tax provision and cash taxes.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which included an Alternative Minimum Tax based on the Adjusted Financial Statement Income of Applicable Corporations. We do not believe the Inflation Reduction Act will have a material impact on our income tax provision and cash taxes, but we continue to monitor U.S.
At December 31, 2023, we had available $1.6 billion in cash, cash equivalents and short-term investments, of which approximately 16% was held in our foreign subsidiaries.
At December 31, 2024, we had available $1.7 billion in cash, cash equivalents and short-term investments, of which approximately 14% was held in our foreign subsidiaries.
We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. 26 However, future events may cause us to change our assumptions and estimates, which may require adjustment.
We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
The change also resulted from higher payments for share repurchases in 2023. Treasury Shares During the year ended December 31, 2023, 160,811 shares of Class A treasury stock with an aggregate total cost of $64.1 million were reissued to fulfill grants to employees under our restricted stock program and our Employee Stock Purchase Program.
During the year ended December 31, 2023, 160,811 shares of Class A treasury stock with an aggregate total cost of $64.1 million were reissued to fulfill grants to employees under our restricted stock program and our Employee Stock Purchase Program.
In addition, lower losses from the change in fair market value of our loan receivable of $6.8 million in the year ended December 31, 2023, compared to holding losses of $100.6 million in the year ended December 31, 2022 contributed to the change.
In addition, holding gains from the change in fair market value of our loan receivable of $12.5 million in the year ended December 31, 2024, compared to holding losses of $6.8 million in the year ended December 31, 2023 contributed to the change.
The change in the fair market value primarily resulted from the recognition of lower holding losses of $1.26 billion compared to holding losses of $5.07 billion in the year ended December 31, 2022 on our position in Sartorius AG.
The change in the fair market value primarily resulted from the recognition of higher holding losses of $2.68 billion compared to $1.26 billion in the year ended December 31, 2023 on our position in Sartorius AG.
Gross margin Consolidated gross margin was 53.4% for the year ended December 31, 2023 compared to 55.9% for the year ended December 31, 2022. Gross margin for the Life Science segment and Clinical Diagnostics segment for the year ended December 31, 2023 decreased by approximately 4.1 percentage points and 0.7 percentage points, respectively, from the year ended December 31, 2022.
Gross margin Consolidated gross margin was 53.7% for the year ended December 31, 2024 compared to 53.4% for the year ended December 31, 2023. Gross margin for the Life Science segment and Clinical Diagnostics segment for the year ended December 31, 2024 increased by approximately 0.3 percentage points and 0.5 percentage points, respectively, from the year ended December 31, 2023.
During the year ended December 31, 2023, we repurchased 1,267,757 shares of Class A common stock for $428.7 million under our share repurchase programs, compared to the repurchase of 496,692 shares of our common stock for $215.7 million during the year ended December 31, 2022.
During the year ended December 31, 2024, we repurchased 690,857 shares of Class A common stock for $201.6 million under our share repurchase programs, compared to the repurchase of 1,267,757 shares of our common stock for $428.7 million during the year ended December 31, 2023.
We are impacted by global economic conditions and our business was negatively impacted by the recent economic constraints in China and the ongoing challenges impacting the biopharma market and small biotech companies. We expect that these conditions will continue to negatively impact our business in 2024.
We are impacted by ongoing global economic and geopolitical conditions and our business continued to be negatively impacted by the ongoing challenges impacting the biopharma market and small biotech companies. We expect that these conditions will continue to impact our business in 2025.
During the year ended December 31, 2022, 135,744 shares of Class A treasury stock with an aggregate total cost of $58.4 million were reissued to fulfill grants to employees under our restricted stock program and our Employee Stock Purchase Program.
Treasury Shares During the year ended December 31, 2024, 183,567 shares of Class A treasury stock with an aggregate total cost of $64.0 million were reissued to fulfill grants to employees under our restricted stock program and our Employee Stock Purchase Program.
Actual results could differ from these estimates. We have determined that for the periods reported in this Annual Report on Form 10-K the following accounting policies and estimates are critical in understanding our financial condition and results of operations.
However, future events may cause us to change our assumptions and estimates, which may require adjustment. Actual results could differ from these estimates. We have determined that for the periods reported in this Annual Report on Form 10-K the following accounting policies and estimates are critical in understanding our financial condition and results of operations.
Other income, net Other income, net includes investment and dividend income, interest income on our cash and cash equivalents, short-term investments and long-term marketable securities. Other income, net for the year ended December 31, 2023 increased to $106.4 million compared to $44.6 million for the year ended December 31, 2022.
Other income, net Other income, net includes investment and dividend income, interest income on our cash and cash equivalents, short-term investments and long-term marketable securities. Other income, net for the year ended December 31, 2024 decreased to $90.3 million compared to $106.5 million for the year ended December 31, 2023.
Change in fair market value of equity securities and loan receivable (Gains) losses from change in fair market value of equity securities and loan receivable was a loss of $1.25 billion and $5.19 billion for the years ended December 31, 2023 and 2022, respectively.
Change in fair market value of equity securities and loan receivable Losses from change in fair market value of equity securities and loan receivable was $2.66 billion and $1.25 billion for the years ended December 31, 2024 and 2023, respectively.
Contractual Obligations The following summarizes certain of our contractual obligations as of December 31, 2023 and the effect such obligations are expected to have on our cash flows in future periods (in millions): 32 Payments Due by Period Less Than 1-3 3-5 More than Contractual Obligations Total One Year Years Years 5 Years Long-term debt, including current portion (1) $ 1,210.1 $ 0.5 $ 1.0 $ 401.0 $ 807.6 Interest payments (1) $ 301.7 $ 44.0 $ 87.9 $ 64.1 $ 105.7 Operating lease obligations (2) $ 236.3 $ 46.6 $ 78.4 $ 45.8 $ 65.5 Purchase obligations (3) $ 122.6 $ 96.4 $ 26.1 $ 0.1 $ — Long-term liabilities (4) $ 121.7 $ 4.3 $ 36.5 $ 10.5 $ 70.4 (1) These amounts represent expected cash payments, primarily from Senior Notes, which are included in our December 31, 2023 consolidated balance sheet.
Contractual Obligations The following summarizes certain of our contractual obligations as of December 31, 2024 and the effect such obligations are expected to have on our cash flows in future periods (in millions): 31 Payments Due by Period Less Than 1-3 3-5 More than Contractual Obligations Total One Year Years Years 5 Years Long-term debt, including current portion (1) $ 1,210.4 $ 1.2 $ 401.0 $ 1.1 $ 807.1 Interest payments (1) $ 257.7 $ 43.9 $ 77.4 $ 61.4 $ 75.0 Operating lease obligations (2) $ 195.5 $ 46.8 $ 66.0 $ 39.4 $ 43.3 Purchase obligations (3) $ 77.8 $ 60.1 $ 17.7 $ — $ — Long-term liabilities (4) $ 90.8 $ 4.4 $ 17.5 $ 10.0 $ 58.9 (1) These amounts represent expected cash payments, primarily from Senior Notes, which are included in our December 31, 2024 consolidated balance sheet.
There are differing interpretations of tax laws and regulations, and as a result, significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions. We record liabilities for unrecognized tax benefits related to uncertain tax positions.
We are currently under examination by many of these tax authorities. There are differing interpretations of tax laws and regulations, and as a result, significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions.
Gross margins are generally sufficient to exceed normal operating costs, and funding for research and development of new products, as well as routine outflows for capital expenditures, interest and taxes.
Our product mix is diversified, and certain products compete largely on product efficacy, while others compete on price. Gross margins are generally sufficient to exceed normal operating costs, and funding for research and development of new products, as well as routine outflows for capital expenditures, interest and taxes.
Effective tax rate Our effective tax rates were 25.0% and 22.9% for the years ended December 31, 2023 and 2022, respectively. The effective tax rates for the years ended December 31, 2023 and 2022 were primarily driven by the unrealized gain/loss in equity securities that was taxed at 22.3% and 22.5%, respectively, as well as the geographical mix of earnings.
The effective tax rates for the years ended December 31, 2024 and 2023 were primarily driven by the unrealized gain/loss in equity securities that was taxed at 22.6% and 22.3%, respectively, as well as the geographical mix of earnings. 29 Our income tax returns are routinely audited by U.S. federal, state and foreign tax authorities.
The increase in operating cash flows was primarily due to lower cash paid to suppliers and employees, higher dividend proceeds, and lower income tax paid, partially offset by higher interest paid, lower cash received from customers, and lower proceeds from foreign exchange contracts.
The increase in operating cash flows was primarily due to lower cash paid to suppliers and employees, lower income tax paid, and higher proceeds from foreign exchange contracts, partially offset by lower cash received from customers and lower dividend proceeds from Sartorius AG. 30 Cash Flows from Investing Activities Our investing activities have consisted primarily of cash used for purchases of marketable securities and investments, and acquisitions.
Net cash provided by investing activities was $20.2 million compared to net cash used for investing activities of $1,207.6 million for the years ended December 31, 2023 and 2022, respectively, primarily due to the timing of our purchases, maturities and sales of marketable securities and investments as a result of the cash proceeds from the sale of Senior Notes issued in March 2022. 31 Cash Flows from Financing Activities Our financing activities have consisted primarily of cash from the issuance of senior notes.
Net cash used in investing activities was $160.2 million compared to net cash provided by investing activities of $20.2 million for the years ended December 31, 2024 and 2023, respectively, primarily due to the timing of our purchases, maturities and sales of marketable securities and investments.
The decrease in gross margin was primarily driven by product mix, increased material costs and inventory reserves. Selling, general and administrative expense Consolidated selling, general and administrative expense (SG&A) increased to $841.7 million or 31.5% of sales for the year ended December 31, 2023 compared to $827.8 million or 29.5% of sales for the year ended December 31, 2022.
The increase in gross margin was primarily driven by favorable product mix and cost control measures, partially offset by higher restructuring and material costs. 28 Selling, general and administrative expense Consolidated selling, general and administrative expense (SG&A) decreased to $814.0 million or 31.7% of sales for the year ended December 31, 2024 compared to $841.7 million or 31.5% of sales for the year ended December 31, 2023.
The Life Science segment sales for the year ended December 31, 2023 were $1.18 billion, a decrease of 12.5% compared to the year ended December 31, 2022. On a currency neutral basis, sales decreased 12.0% compared to the year ended December 31, 2022. The currency neutral sales decrease was mainly in Asia Pacific and EMEA.
The decrease in sales was driven by lower sales in our Life Science segment. The Life Science segment sales for the year ended December 31, 2024 were $1.03 billion, a decrease of 12.8% compared to the year ended December 31, 2023. On a currency neutral basis, sales decreased 12.6% compared to the year ended December 31, 2023.
Results of Operations – Non-operating Interest expense Interest expense for the years ended December 31, 2023 and 2022 was $49.4 million and $38.1 million, respectively, an increase of $11.3 million compared to the prior year period. The increase was primarily due to the sale in March 2022 of the $1.2 billion Senior Notes.
Results of Operations – Non-operating Interest expense Interest expense for the years ended December 31, 2024 and 2023 was $48.9 million and $49.4 million, respectively, which primarily consisted of interest expense related to the $1.2 billion Senior Notes.
Research and development expense Consolidated research and development (R&D) expense decreased to $247.4 million or 9.3% of sales for the year ended December 31, 2023 compared to $256.9 million or 9.2% of sales for the year ended December 31, 2022.
The decrease to SG&A expense was primarily due to lower restructuring costs and a reduction in discretionary spending. Research and development expense Consolidated research and development (R&D) expense increased to $295.9 million or 11.5% of sales for the year ended December 31, 2024 compared to $247.4 million or 9.3% of sales for the year ended December 31, 2023.
Borrowings under the Credit Agreement, as amended, are available on a revolving basis and can be used to make permitted acquisitions, for working capital and for other general corporate purposes.
Borrowings under the Revolving Credit Agreement are available on a revolving basis and can be used to make acquisitions, for working capital and for other general corporate purposes. We had no outstanding borrowings under the Revolving Credit Agreement as of December 31, 2024, however, $5.7 million was utilized for domestic standby letters of credit that reduced our borrowing availability.
Net sales (sales) for the year ended December 31, 2023 were $2.67 billion, compared to $2.80 billion for the year ended December 31, 2022, a decrease of 4.7%. COVID-related sales were approximately $3.6 million for the year ended December 31, 2023 compared to approximately $109.2 million for the year ended December 31, 2022.
Net sales (sales) for the year ended December 31, 2024 were $2.57 billion, compared to $2.67 billion for the year ended December 31, 2023, a decrease of 3.9%. On a currency neutral basis, for the year ended December 31, 2024 sales decreased by approximately 3.6% compared to the same period in 2023.
The decrease in R&D expense in the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to a change in the fair value of contingent consideration, partially offset by higher restructuring costs and continued investment in research and development.
The increase in R&D expense in the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a one-time acquired in-process research and development expense of $29.5 million in 2024 and an increase in the fair value of contingent consideration of $12.5 million impacting R&D expense in 2024 compared to a decrease in the fair value of contingent consideration of $14.0 million impacting R&D expense in 2023.
The Clinical Diagnostics segment sales for the year ended December 31, 2023 were $1.49 billion, an increase of 2.6% compared to the year ended December 31, 2022. On a currency neutral basis, sales increased 3.2% compared to the year ended December 31, 2022.
The decrease was driven by ongoing weakness in the biotech and biopharma end-markets. Currency neutral sales decreased across all regions. The Clinical Diagnostics segment sales for the year ended December 31, 2024 were $1.54 billion, an increase of 3.3% compared to the year ended December 31, 2023.
We continue to monitor the changes in tax laws and regulations to evaluate their potential impact on our business. 30 Liquidity and Capital Resources Bio-Rad operates and conducts business globally, primarily through subsidiary companies established in the markets in which we trade.
Department of the Treasury guidance and regulations. Liquidity and Capital Resources Bio-Rad operates and conducts business globally, primarily through subsidiary companies established in the markets in which we trade. Goods are manufactured in a small number of locations, and are then shipped to local distribution facilities around the world.
It is generally our intention to repatriate certain foreign earnings to the extent that such repatriations are not restricted by local laws or accounting rules, and there are no substantial incremental costs. On February 13, 2024, we entered into a new $200.0 million unsecured revolving credit facility with a group of financial institutions.
It is generally our intention to repatriate certain foreign earnings to the extent that such repatriations are not restricted by local laws, and there are no substantial incremental costs. Cash Flows from Operations Net cash provided by operations was $455.2 million and $374.9 million for the years ended December 31, 2024 and 2023, respectively.
The currency neutral sales increase was primarily driven by an increased demand for our diagnostic testing systems, primarily diabetes, blood typing, and quality control products, especially in Asia Pacific and EMEA, partially offset by a decline in our infectious disease products and lower sales due to Russia sanctions.
On a currency neutral basis, sales increased 3.7% compared to the year ended December 31, 2023. The currency neutral sales increase was primarily driven by an increased demand for our quality control and blood typing products. Currency neutral sales increased across all regions.
Interest on the Notes is payable semiannually in arrears on March 15 and September 15 of each year until the principal is paid or made available for payment.
As of December 31, 2024, our short-term investments include the net cash proceeds from the sale of Senior Notes of $1.186 billion. Interest is payable semiannually in arrears on March 15 and September 15 of each year.
Removed
On a currency neutral basis, for the year ended December 31, 2023 sales decreased by approximately 4.1% compared to 28 the same period in 2022. Currency neutral sales decreased mainly in APAC and EMEA. Excluding COVID-related sales, sales decreased 0.4% on a currency neutral basis from the year ended December 31, 2022.
Added
The decrease was primarily attributable to lower dividend income from Sartorius AG in 2024 compared to 2023. Effective tax rate Our effective tax rates were 21.3% and 25.0% for the years ended December 31, 2024 and 2023, respectively.
Removed
Sales of our Life Sciences segment in 2023 were negatively impacted by demand constraints from biopharma and small biotech customers in the biopharma market and the economic environment in China. In addition, the Russia sanctions impacted both our Life Science and Clinical Diagnostics segments.
Added
We record liabilities for unrecognized tax benefits related to uncertain tax positions.
Removed
COVID-related sales were $2.9 million in the year ended December 31, 2023 compared to approximately $105.2 million in the year ended December 31, 2022.
Added
The change was primarily attributable to lower payments for share repurchases, partially offset by a one-time payment of contingent consideration.
Removed
Excluding COVID-related sales, sales decreased 4.9% on a currency neutral basis driven primarily by lower process chromatography, qPCR and Western blotting products, as a result of demand constraints from biopharma and small biotech customers, the economic environment in China, and Russia sanctions.
Removed
COVID-related sales were $0.7 million in the year ended December 31, 2023 compared to approximately $4.0 million in the year ended December 31, 2022. Excluding COVID-related sales, sales increased 3.4% on a currency neutral basis.
Removed
The increase to SG&A expense was primarily driven by restructuring costs as well as higher facility-related expenses, partially offset by lower employee-related expenses.
Removed
The increase was primarily due to higher interest rates favorably impacting our investments resulting from cash invested from the $1.2 billion Senior Notes issued in March 2022.
Removed
The increase to Other income, net also resulted from a $3 million higher dividend from Sartorius AG in 2023 compared to 2022, and from no credit loss or other than temporary impairment in 2023 compared to a credit loss of $8 million and other than temporary impairment losses of $12 million in 2022.
Removed
Our income tax returns are routinely audited by U.S. federal, state and foreign tax authorities. We are currently under examination by many of these tax authorities.
Removed
Goods are manufactured in a small number of locations, and are then shipped to local distribution facilities around the world. Our product mix is diversified, and certain products compete largely on product efficacy, while others compete on price.
Removed
We had no outstanding borrowings under the 2019 Credit Agreement, as amended, as of December 31, 2023, however, $0.2 million was utilized for domestic standby letters of credit that reduced our borrowing availability.
Removed
In March 2022, we issued $400 million aggregate principal amount of 3.3% Senior Notes due 2027, and $800 million aggregate principal amount of 3.7% Senior Notes due 2032. Net cash proceeds from the bond issuance after deducting the underwriting discount and estimated offering expenses was $1.186 billion.
Removed
Borrowings under the credit agreement are on a revolving basis and can be used to make acquisitions, for working capital and for other general corporate purposes. The credit agreement requires Bio-Rad to comply with certain financial ratios and covenants, among other things. The new credit facility replaces the credit facility which expires April 2024.
Removed
Cash Flows from Operations Net cash provided by operations was $374.9 million and $194.4 million for the years ended December 31, 2023 and 2022, respectively.
Removed
Cash Flows from Investing Activities Our investing activities have consisted primarily of cash used for purchases of marketable securities and investments, and acquisitions.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed10 unchanged
Biggest changeA 10% depreciation / appreciation on the quoted stock prices for ordinary and preference shares of Sartorius at December 31, 2023, would result in an approximate loss / gain of $0.73 billion reported in the financial statement line (Gains) losses from change in fair market value of equity securities and loan receivable in our consolidated statements of income (loss) for the year ended December 31, 2023. 34
Biggest changeA 10% depreciation / appreciation on the quoted stock prices for ordinary and preference shares of Sartorius at December 31, 2024, would result in an approximate loss / gain of $0.45 billion reported in the financial statement line Losses from change in fair market value of equity securities and loan receivable in our consolidated statements of income (loss) for the year ended December 31, 2024. 33
As of December 31, 2023, we had $1.20 billion in principal amount of fixed-rate long-term debt outstanding. Interest rate changes affect the fair value of our notes but do not impact our financial position, cash flows or results of operations due to the fixed nature of the debt obligations. Share price movement risk associated with our investment in Sartorius.
As of December 31, 2024, we had $1.20 billion in principal amount of fixed-rate long-term debt outstanding. Interest rate changes affect the fair value of our notes but do not impact our financial position, cash flows or results of operations due to the fixed nature of the debt obligations. Share price movement risk associated with our investment in Sartorius.
We enter into foreign currency forward contracts to hedge the gains and losses arising from remeasurement of non-US dollar denominated monetary assets and liabilities, primarily cash, 33 accounts receivables and accounts payables. The majority of forward contracts expire within 90 days or less.
We enter into foreign currency forward contracts to hedge the gains and losses arising from remeasurement of non-US dollar denominated monetary assets and liabilities, primarily cash, 32 accounts receivables and accounts payables. The majority of forward contracts expire within 90 days or less.
A hypothetical 10% depreciation / appreciation of foreign currencies relative to the U.S. dollar would result in an unrealized gain / loss of $41.4 million on our derivative position as of December 31, 2023.
A hypothetical 10% depreciation / appreciation of foreign currencies relative to the U.S. dollar would result in an unrealized gain / loss of $32.1 million on our derivative position as of December 31, 2024.
A hypothetical increase or decrease in interest rates by 50 and 100 basis points would have resulted in a decrease or increase in the fair value of our net investment position of approximately $4.5 million and $8.9 million, respectively, as of December 31, 2023.
A hypothetical increase or decrease in interest rates by 50 and 100 basis points would have resulted in a decrease or increase in the fair value of our net investment position of approximately $10.9 million and $21.7 million, respectively, as of December 31, 2024.

Other BIO 10-K year-over-year comparisons