Bio-Rad Laboratories, Inc. (NYSE:BIO) Q4 2022 Earnings Call Transcript

Ilan Daskal: So, generally speaking, Dan, first of all, in 2023, we plan to have a lower inventory level than 2022, just as the target we set ourselves. Some of the procurement raw material was done for instruments that in components that will last longer than the next 4 quarters. And on purpose, we wanted to have some elevated level of raw material. And I do not see any risk of any write-offs for those, since these are all for instrument buildup. So that was kind of part of our thinking in terms of kind of the long-term plan, that’s the reason that it will take probably 8 quarters to normalize. As you can imagine, despite the fact that component availability became kind of audited ease in terms of availability, but it’s not yet back to kind of a normalized level. And we still have some challenges there. And maybe, Andy, do you want to

Andrew Last: Yeah. Just this kind of a carry-forward effect from keeping the clinical plants open on 2 sides of the world as well for 2 to 3 quarters longer than anticipated just some double down on inventory that will then have to also burn through, so that’s another contributory factor.

Dan Leonard: Got it. Thank you.

Andrew Last: Thank you, Dan.

Operator: Thank you. The next question comes from the line of Brandon Couillard with Jefferies. Please proceed.

Brandon Couillard: Hi. Thanks. Good afternoon, guys. Just a question on the full year growth outlook, make sure I got the chart that we take out kind of the COVID headwinds, assume that goes to zero. You talked about core growth in the double-digits, I think, you said 10% to 11% for the year, which ahead of your sort of LRP that you laid out in the Analyst Day. Can you just talk about level of confidence in that level of growth, and where in the portfolio, you may have been a little more conservative in terms of your expectation?

Andrew Last: Brad, so it’s Andy here, you broke up a little bit at the end there, so sorry. But, I mean, we have a fairly diligent process for building our plans for the year, bottoms up by region by portfolio or carrier. But the macro trends for us seem pretty robust on a fully global basis. Portfolio areas of growth that we’ve highlighted before, very consistently performing, I think, 2022 didn’t quite €“ we didn’t quite reach our initial growth expectations, fully realized growth expectations. So you’ve got a little bit of a comp benefit there too, a little bit of benefit coming through from some elevated backorder that we’re taking into 2023. So when we look at growth aspirations, which portions of the portfolio we expect to continue to grow, we’ve got new product contribution, both from products launched within 2022 and some new ones in particular areas of the portfolio. This year, we feel we’ve got a good growth trajectory for the business going forward.

Brandon Couillard: Then on the digital PCR business, it changes in the competitive landscape that you’re seeing in the market, I know, Roche’s launched their system. And then any kind of updated stats on that segments and could you share with us in terms of the instrument versus consumable mix where that stands today and maybe the in-market mix, maybe between biopharma diagnostics and just research or what that looks like now?