This discussion should be read in conjunction with the information contained in
both our consolidated financial statements for the year ended December 31, 2020
and the condensed consolidated financial statements for the three and six months
ended June 30, 2021.

Overview.  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 sell more than 9,000 products and services to a diverse client base comprised of scientific research, healthcare, education and government customers worldwide. We do not disclose quantitative information about our different products and services as it is impractical to do so based primarily on the numerous products and services that we sell and the global markets that we serve.



We manufacture and supply our customers with a range of reagents, apparatus and
equipment to separate complex chemical and biological materials and to identify,
analyze and purify components. Because our customers require standardization for
their experiments and test results, much of our revenues are recurring.

We are impacted by the support of many governments for both research and
healthcare. The current global economic outlook is still uncertain as the need
to control government social spending by many governments limits opportunities
for growth. Adding to this uncertainty is the withdrawal of the United Kingdom
from the European Union. Approximately 38% of our year-to-date 2021 consolidated
net sales are derived from the United States and approximately 62% are derived
from international locations, with Europe being our largest international
region. The international sales are largely denominated in local currencies such
as the Euro, Swiss Franc, Japanese Yen, Chinese Yuan and British Sterling. As a
result, our consolidated net sales expressed in dollars benefit when the U.S.
dollar weakens and suffer when the dollar strengthens. When the U.S. dollar
strengthens, we benefit from lower cost of sales from our own international
manufacturing sites as well as non-U.S. suppliers, and from lower international
operating expenses. We regularly discuss our changes in revenue and expense
categories in terms of both changing foreign exchange rates and in terms of a
currency neutral basis, if notable, to explain the impact currency has on our
results.

COVID-19

The full impact of the COVID-19 pandemic continues to be inherently uncertain at
the time of this report. The COVID-19 pandemic has impacted and, we expect to
some extent, will continue to impact parts of our business, operations,
financial condition and results of operations in a variety of ways. We saw
continued but moderate demand for products associated with COVID-19 testing and
related research. For more discussions relating to the impacts on the COVID-19
pandemic, please see "Item 1A. Risk Factors" to this Form 10-Q.

Restructuring



In February 2021, we announced our strategy-driven restructuring plan in
furtherance of our ongoing program to improve operating performance. The
restructuring plan primarily impacts our operations in Europe and includes the
elimination of certain positions, the consolidation of certain functions, and
the relocation of certain manufacturing operations from Europe to Asia. The
restructuring plan is being implemented in phases and is expected to be
substantially complete by the end of 2022. The amounts reflected in Cost of
goods sold, Selling, general and administrative expense and Research and
development expense were $1.1 million, $(6.9) million and $(1.9) million and
$25.0 million, $27.8 million and $15.1 million in the condensed consolidated
statements of income for the three and six months ended June 30, 2021,
respectively. As of June 30, 2021, we have a restructuring accrual of $61.6
million. The amounts are estimates based on the information currently available
to management.
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Results of Operations

The following table shows cost of goods sold, gross profit, components of operating expense, change in fair market value of equity securities, and net income as a percentage of net sales:


                                                              Three Months Ended                             Six Months Ended
                                                                   June 30,                                      June 30,
                                                          2021                   2020                   2021                   2020
Net sales                                                    100.0  %              100.0  %               100.0  %               100.0  %
Cost of goods sold                                            43.9                  45.4                   44.4                   44.9
Gross profit                                                  56.1                  54.6                   55.6                   55.1
Selling, general and administrative expense                   29.8                  35.3                   30.4                   34.5
Research and development expense                               8.9                   9.7                    9.5                    9.1
Change in fair market value of equity securities             144.0                 220.4                  153.2                  181.4
Net income                                                   127.7                 180.0                  131.1                  149.1



Critical Accounting Policies and Estimates



An accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, if different estimates reasonably could have
been used, or if changes in the estimate that are reasonably likely to occur
could materially impact the financial statements.  Management believes that
there have been no significant changes during the three and six months ended
June 30, 2021 to the items that we disclosed as our critical accounting policies
and estimates in Management's Discussion and Analysis of Financial Condition and
Results of Operations in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2020.

Other than the recent accounting pronouncement adoptions as discussed in Note 1
to the condensed consolidated financial statements, there have been no
substantial changes in our significant accounting policies during the three and
six months ended June 30, 2021, compared with the significant accounting
policies described in our Annual Report on Form 10-K for the year ended
December 31, 2020.


                  Three Months Ended June 30, 2021 Compared to
                        Three Months Ended June 30, 2020

Results of Operations -- Sales, Margins and Expenses



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.

Net sales (sales) for the second quarter of 2021 were $715.9 million compared to
$536.9 million in the second quarter of 2020, an increase of 33.4%.  Excluding
the impact of foreign currency, second quarter 2021 sales increased by
approximately 27.5% compared to the same period in 2020. Currency neutral sales
increased in all regions.

The Life Science segment sales for the second quarter of 2021 were $334.2
million, an increase of 32.6% compared to the same period last year.  On a
currency neutral basis, sales increased 27.1% compared to the second quarter in
2020. Currency neutral sales were up in nearly all product lines but were
primarily driven by growth in our qPCR, Western Blotting, Droplet Digital PCR,
and Process Media products. All regions experienced strong currency neutral
sales growth compared to the second quarter of 2020.
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The Clinical Diagnostics segment sales for the second quarter of 2021 were $380.2 million, an increase of 34.3% compared to the same period last year.

On


a currency neutral basis, sales increased 28.0% compared to the second quarter
in 2020.  The currency neutral sales were up in nearly all product lines across
all regions, primarily driven by higher utilization in lab operations as
businesses recover from the COVID-19 pandemic.

Consolidated gross margins were 56.1% for the second quarter of 2021 compared to
54.6% for the second quarter of 2020.  Life Science segment gross margins for
the second quarter of 2021 increased by approximately 1.5 percentage points from
the same period last year. The increase in the Life Science segment gross margin
was primarily related to favorable product mix and lower customs duty expense as
a result of a one-time customs duty adjustment in 2020 that related to products
shipped in prior years. Clinical Diagnostics segment gross margins for the
second quarter of 2021 increased by approximately 1.6 percentage points from the
same period last year. The increase in Clinical Diagnostics segment gross
margins was mainly related to favorable product costs.

Selling, general and administrative expenses (SG&A) increased to $213.4 million
or 29.8% of sales for the second quarter of 2021 compared to $189.3 million or
35.3% of sales for the second quarter of 2020.  The increase to SG&A was
primarily related to higher employee related expenses, travel, and legal
expenses.

Research and development (R&D) expense increased to $63.4 million or 8.9% of
sales in the second quarter of 2021 compared to $52.0 million or 9.7% of sales
in the second quarter of 2020.  Life Science segment R&D expense increased in
the second quarter of 2021 compared to the prior year period, primarily from
increases in headcount from the Celsee acquisition, employee related expense,
and investment in strategic research initiatives. Clinical Diagnostics segment
R&D expense increased in the second quarter of 2021 from the prior year period,
primarily due to higher employee related expense.

Results of Operations - Non-operating



Interest expense for the second quarter of 2021 and 2020 was $0.4 million and
$5.7 million, respectively. The reduction in interest expense was primarily due
to the repayment of the $425.0 million principal amount of Senior Notes in
December 2020.

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 net gains
were $1.8 million for the second quarter of 2021 compared to net losses of
$0.8 million for the second quarter of 2020. 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.

Change in fair market value of equity securities was a gain of $1.03 billion and
$1.18 billion for the second quarter of 2021 and 2020, respectively, primarily
resulting from the recognition of lower holding gains in the second quarter of
2021 compared to the second quarter of 2020 on our position in Sartorius AG.

Other income, net for the second quarter of 2021 was $0.1 million of losses, net
compared to $17.2 million of income, net for the second quarter of 2020. The
decrease of $17.3 million was primarily due to a gain of $11.7 million on the
sale of our Informatics division during the second quarter of 2020 and the
timing of the Sartorius dividend. The dividend for fiscal year 2020 amounting to
$8.9 million was declared in the second quarter of 2020, while the dividend for
fiscal year 2021 was declared in the first quarter of 2021.

Our effective income tax rate was 21.0% and 22.4% for the second quarter of 2021
and 2020, respectively. The decrease in our effective income tax rate primarily
related to the release of reserves due to the lapse of certain statutes of
limitations.

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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. 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 do not believe the
resolution of our uncertain tax positions will have a material adverse effect on
our condensed consolidated financial statements, although an adverse resolution
of one or more of these uncertain tax positions in any period may have a
material impact on the results of operations for that period.

As of June 30, 2021, 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
$18.8 million.

                   Six Months Ended June 30, 2021 Compared to
                         Six Months Ended June 30, 2020

Results of Operations -- Sales, Margins and Expenses



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.

Net sales (sales) for the first half of 2021 were $1.44 billion compared to
$1.11 billion in the first half of 2020, an increase of 30.1%.  Excluding the
impact of foreign currency, the first half of 2021 sales increased by
approximately 25.4% compared to the same period in 2020. Currency neutral sales
increased in all regions, led by Asia Pacific and Europe.

The Life Science segment sales for the first half of 2021 were $700.7 million,
an increase of 46.2% compared to the same period last year.  On a currency
neutral basis, sales increased 41.1% compared to the first half of 2020.
Currency neutral sales were up in nearly all product lines but were primarily
driven by growth in our qPCR, Western Blotting, Droplet Digital PCR, and Process
Media products. A significant portion of the Life Science segment growth came
from products used to support COVID-19 research and testing. All regions
experienced double digit currency neutral sales growth compared to the first
half of 2020.

The Clinical Diagnostics segment sales for the first half of 2021 were $738.8 million, an increase of 18.5% compared to the same period last year.

On


a currency neutral basis, sales increased 14.1% compared to the first half of
2020. The currency neutral sales increase was primarily driven by the quality
controls business, especially in Asia Pacific, as the overall diagnostics market
continues to recover from the COVID-19 pandemic. Currency neutral sales also
benefited from the higher utilization in lab operations as businesses recover
from the COVID-19 pandemic.

Consolidated gross margins were 55.6% for the first half of 2021 compared to
55.1% for the first half of 2020.  Life Science segment gross margins for the
first half of 2021 increased from the prior year period by approximately 3.8
percentage points. The increase in the Life Science segment gross margin was
primarily related to favorable product mix related to higher sales of Gene
Expression and Process Media products and lower production costs. Clinical
Diagnostics segment gross margins for the first half of 2021 decreased from the
prior year period by approximately 3.0 percentage points. The decrease in the
Clinical Diagnostics segment gross margins was primarily related to the costs
associated with the restructuring plan announced in February 2021.

                                       34
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Selling, general and administrative expenses (SG&A) increased to $439.3 million
or 30.4% of sales for the first half of 2021 compared to $383.0 million or 34.5%
of sales for the first half of 2020.  The increase to SG&A was primarily related
to the restructuring plan announced in February 2021, as well as increased
employee related expenses and legal expenses.

Research and development (R&D) expense increased to $137.3 million or 9.5% of
sales in the first half of 2021 compared to $101.3 million or 9.1% of sales in
the first half of 2020.  Life Science segment R&D expense increased in the first
half of 2021 compared to the prior year period, primarily from increases in
headcount from the Celsee acquisition, employee related expense, and investment
in strategic research initiatives. Clinical Diagnostics segment R&D expense
increased in the first half of 2021 from the prior year period, primarily
related to the restructuring plan announced in February 2021 and higher employee
related expenses.

Results of Operations - Non-operating



Interest expense for the first half of 2021 and 2020 was $0.8 million and
$11.4 million, respectively, a decrease of $10.6 million primarily due to the
repayment of the $425.0 million principal amount of Senior Notes in December
2020.

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 net gains
were $1.7 million for the first half of 2021 compared to net losses of
$1.7 million for the first half of 2020. 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.

Change in fair market value of equity securities were gains of $2.21 billion and
$2.01 billion for the first half of 2021 and 2020, respectively, primarily
resulting from the recognition of higher holding gains in the first half of 2021
compared to the first half of 2020 on our position in Sartorius AG.

Other income, net for the first half of 2021 was $17.3 million compared to $20.5 million for the first half of 2020. The decrease of $3.2 million of income was primarily due to a gain of $11.7 million on the sale of our Informatics division during the first half of 2020, partially offset by a $10 million increase in the Sartorius AG dividends declared in 2021.

Our effective income tax rate was 22.9% and 23.0% for the first half of 2021 and 2020, respectively. The decrease in our effective income tax rate primarily related to the release of reserves due to the lapse of certain statutes of limitations.


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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.  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.  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) that we
entered into in April 2019, and to a lesser extent international lines of
credit.  Borrowings under the Credit Agreement are available on a revolving
basis and can be used to make permitted acquisitions, for working capital and
for other general corporate purposes. We had no outstanding borrowings under the
2019 Credit Agreement as of June 30, 2021, however, $0.2 million was utilized
for domestic standby letters of credit that reduced our borrowing availability.
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.

Because the Company might be deemed an investment company under the Investment Company Act based on the market value of our position in Sartorius AG, the Company may not be able to access the capital markets or otherwise obtain additional financing until it is determined that the Company is not an investment company. The inability to obtain additional financing may have a negative impact on the Company's ability to make acquisitions or other non-routine investments.



At June 30, 2021, we had available $1.17 billion in cash, cash equivalents and
short-term investments, of which approximately 31% was held in our foreign
subsidiaries. We believe that our holdings of cash, cash equivalents and
short-term investments in the U.S. and in our foreign subsidiaries are
sufficient to meet both the current and long-term needs of our global
operations. The amount of funds held in the United States can fluctuate due to
the timing of receipts and payments in the ordinary course of business and due
to other reasons, such as acquisitions. As part of our ongoing liquidity
assessments, we regularly monitor the mix of domestic and foreign cash flows
(both inflows and outflows).

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.



Demand for our products and services could change more dramatically in the
short-term than in previous years due to the impacts of the COVID-19 pandemic,
as well as due to funding, reimbursement constraints and support levels from
government, universities, hospitals and private industry, including diagnostic
laboratories. The need for certain sovereign nations with large annual deficits
to curtail spending, international trade disputes and increased regulation,
could lead to slower growth of, or even a decline in, our business. Sovereign
nations either delaying payment for goods and services or renegotiating their
debts could impact our liquidity.

Cash Flows from Operations



Net cash provided by operations was $268.2 million compared to $154.9 million
for the six months ended June 30, 2021 and 2020, respectively.  The increase in
operating cash flows was primarily due to higher cash received from customers as
a result of the growth in sales, higher Sartorius AG dividends in 2021 compared
to no cash dividends in 2020 as it was received in the third quarter of 2020,
higher investment income received and lower interest paid as a result of the
repayment of the $425.0 million principal amount of Senior Notes in December
2020. These increases were partially offset by higher cash paid to suppliers
primarily for materials to support the increase in sales, cash paid for employee
related expenses such as salaries, bonuses and benefits, and to a lesser extent
for employee restructuring programs. The increases were also partially offset by
higher income taxes paid.

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Cash Flows from Investing Activities

Our investing activities have consisted primarily of capital expenditures and activity related to the purchases, sales and maturities of marketable securities.



Net cash used in investing activities was $148.6 million and $101.0 million for
the six months ended June 30, 2021 and 2020, respectively. The increase was
primarily attributable to an increase of $129.1 million in net cash outflows
from maturities, sales and purchases of marketable securities and investments,
and to a lesser extent proceeds of $12.2 million from a divestiture of a
division that was received in 2020 compared to none in 2021. The increased cash
outflows were partially offset by cash outflows in 2020 for the acquisition of
all equity interests of Celsee, Inc. for total consideration of $99.5 million in
2020 compared to no acquisitions in 2021.
Cash Flows from Financing Activities

Our financing activities have consisted primarily of cash used for purchases of
treasury stock, payments for contingent consideration, and cash proceeds from
the issuance of common stock for share-based compensation.

Net cash used in financing activities was $44.5 million and $101.6 million for
the six months ended June 30, 2021, and 2020, respectively. This decrease was
primarily attributable to a $50.0 million decrease in cash used to purchase
treasury stock.

Treasury Shares



During the first quarter of 2021, we repurchased 89,506 shares of Class A common
stock for $50.0 million under our Share Repurchase Program compared to the
repurchase of 291,941 shares of our Class A common stock for $100.0 million in
2020. No shares were purchased for the remainder of 2020. We designated these
repurchased shares as treasury stock. As of June 30, 2021, $223.1 million
remained under the Share Repurchase Program.

During the second quarter of 2021, 1,164 shares of Class A treasury stock with
an aggregate total cost of $0.4 million were reissued to fulfill grants to
employees under our restricted stock program. Upon reissuing the Class A
treasury stock, a loss of $65 thousand was incurred as they were reissued at a
lower price than their average cost, which reduced Retained earnings, while $0.4
million reduced Additional paid-in capital.


Recent Accounting Pronouncements Adopted

See Note 1 to the condensed consolidated financial statements for recent accounting pronouncements adopted and to be adopted.

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