Ilan Daskal
Executive Vice President, Chief Financial Officer at Bio-Rad Laboratories
Thank you Andy. Now, I would like to review the results of the fourth quarter and full year. Net sales for the fourth quarter of 2021 were $732.8 million, which is a 7.2% decrease on a reported basis versus $789.8 million in Q4 of 2020. On a currency neutral basis, sales decreased 6.9%. The decline in revenue was a result of $32 million related to the intellectual property litigation awarded included in Q4 of 2020 as well as lower COVID related sales this year. Excluding the $32 million damages award in 2020, the fourth quarter year-over-year, currency neutral revenue decline was 2.9%, again mainly related to lower COVID sales.
We estimate that COVID related sales were about $46 million in the quarter, which was roughly double our forecast and reflected continued spikes in demand from geographies where new outbreaks have occurred. Despite the supply chain challenges, the fourth quarter currency-neutral or year-over-year revenue, which excludes COVID related sales increased 10.2%. In addition, supply chain constraints did impact the fourth quarter revenue by approximately $30 million of which we expect to recover about $20 million in 2022.
On a geographic basis, we experienced, currency neutral year-over-year core revenue growth across all three regions while COVID related year-over-year sales decline globally. As a reminder, our core revenue we define as currency neutral non-GAAP and excludes COVID results. Sales of the Life Science Group in the 4th quarter of 2021 were $326.6 million compared to $428.5 million in Q4 of 2020 which is a 23% decline on a reported basis and a 23.4% decline on a currency neutral basis. Excluding COVID related sales and at $32 million settlement for back royalties, the underlying Life Science business year over year currency neutral core revenue growth was 7.9%. The year-over-year growth was driven by Droplet Digital PCR as well as our qPCR business which is experiencing nice uptake from our new generation CFX Opus platform. On a geographic basis, Life Science experienced currency neutral year-over-year core revenue growth across all three regions while COVID related year-over-year sales declined globally.
Sales of the Clinical Diagnostics Group in the fourth quarter were $404.9 million compared to $359.6 million in Q4 of 2020 which is a 12.6% increase on a reported basis and a 12.8% increase on a currency neutral basis. Excluding COVID related sales, the clinical diagnostic business year over year currency neutral core revenue growth was 12.1%. During the fourth quarter, the Diagnostics Group posted growth across all of its product lines. The year-over-year growth was driven by a recovery of routine testing, which is now generally approaching pre-COVID levels.
On a geographic basis, the Diagnostics Group currency neutral year-over-year sales grew mid-single digits in the Americas and saw double-digit growth in the Europe and Asia regions. The reported gross margin for the fourth quarter of 2021 was 54.7% on a GAAP basis and compares to 58.3% in Q4 of 2020. The fourth quarter gross margin year-over-year decline was mainly due to the $32 million settlement payment in 2020 and to a lesser extent product mix, increased freight costs and normal factors and [Phonetic] utilization related to our overall supply chain challenges.
Amortization related to prior acquisitions recorded in cost of goods sold was $4.7 million as compared to $4.6 million in Q4 of 2020. SG&A expenses for Q4 2021 were $224.1 million or 30.6% of sales compared to $219.1 million or 27.7% in Q4 of 2020. Increases in SG&A spend was mainly the result of employee-related expenses and increased marketing activities. Total amortization expense related to acquisitions recorded in SG&A for the quarter was $1.8 million versus $2.4 million in Q4 of 2020.
Research and development expense in Q4 was $69.9 million or 9.5% of sales compared to $65.8 million or 8.3% of sales in Q4 of 2020. Q4 operating income was $107 million or 14.6% of sales compared to $175.2 million or 22.2% of sales in Q4 of 2020. The lower year-over-year operating income was driven by the significantly lower contribution from COVID related sales. The reduced COVID sales negatively impacted mix and along with supply chain constrain contributed to lower manufacturing utilization. In addition, Q4 of 2020 benefited from the $32 million intellectual property settlement.
Looking below the operating line. The change in fair market value of equity securities holdings, which are substantially related to buy rates ownership of Sartorius AG shares negatively impact the reported results by $2.153 billion. Also during the quarter interest and other income, resulted in a net benefit of $7.5 million primarily driven by the investment income and compared to $1 million of expense last year. The effective tax rate for the fourth quarter of 2021 was 22.8% compared to 22.2% for the same period in 2020.
The effective tax rates were primarily affected by the change in value of the security holdings. Reported net loss for the fourth quarter was $1.574 billion and diluted loss per share were $52.59. This is a decrease from last year and is largely related to changes in valuation of the Sartorius Holdings. Moving on to the non-GAAP results. Looking at the results on a non-GAAP basis, we have excluded certain atypical and unique items that impacted both the gross and operating margins, as well as other income. These items are detailed in the reconciliation table in the press release.
Looking at the non-GAAP results for the fourth quarter, in cost of goods sold we have excluded $4.7 million of amortization of purchased intangibles, a small restructuring and non-recurring items. These exclusions moved the gross margin for the fourth quarter of 2021 to a non-GAAP gross margin of 55.4% versus 58.2% in Q4 of 2020. Non-GAAP SG&A in the fourth quarter of 2021 was 30.2% versus 28.2% in Q4 of 2020. In SG&A, on a non-GAAP basis, we have excluded amortization of purchased intangibles of $1.8 million, and in-vitro diagnostic registration fee in Europe for previously approved products of $1.6 million.
Legal related expenses of $900,000 and the restructuring related benefit of $1.4 million. Non-GAAP R&D expense in the fourth quarter of 2021 was 9.8% versus 8.7% in Q4 of 2020. In R&D, on a non-GAAP basis, we have excluded a $2 million restructuring benefit. The cumulative sum of these non-GAAP adjustments result in moving the quarterly operating margin from 14.6% on a GAAP basis to 15.4% on a non-GAAP basis. These non-GAAP operating margin compares to a non-GAAP operating margin of 21.4% in Q4 of 2020.
We have also excluded certain items below the operating line which are the decrease in value of the Sartorius Equity Holdings of $2.153 billion and about $1.6 million loss associated with venture investments. The non-GAAP effective tax rate for the fourth quarter of 2021 was 20.3% compared to 24.3% for the same period in 2020. The lower rate in 2021 was driven by the geographic mix of earnings and finally, non-GAAP net income for the fourth quarter of 2021 was $97 million or $3.21 diluted earnings per share, compared to $121 million and $4.01 per share in Q4 of 2020.
Moving on to the full-year results. Net sales for the full year of 2021 were $2.923 billion on a reported basis excluding the settlement for back royalties of $32 million, 2021 sales reached $2.891 billion which is 12.8% non-GAAP revenue growth on a currency neutral basis. COVID related sales for the full year were about $266 million compared to $318 million in the year ago period on a currency neutral basis. Core year-over-year revenue growth, which we define as currency neutral non-GAAP and excludes COVID related sales was 17%.
Sales of the Life Science Group for 2021 were $1.401 billion excluding the settlement for back royalties of $32 million, the year-over-year growth was 12.3% on a currency neutral basis. When excluding COVID related sales, Life Science year-over-year currency-neutral growth was 23.6%. The majority of the year-over-year growth was driven by our core PCR products, Droplet Digital PCR, process media and Western Blot. On a geographic basis, Life Science currency-neutral full year-over-year sales grew across all three regions. Sales of Clinical Diagnostics products for 2021 were $1.516 billion which is growth of 13.6% on a currency neutral basis.
When excluding COVID related sales, Clinical Diagnostics year over year currency-neutral growth was 12.8%. The strong year-over-year growth was driven by the overall recovery of routine testing. On a geographic basis, clinical diagnostics full year-over-year sales grew across all regions. The full year non-GAAP gross margin was 57.3% compared to 56.9% in 2020. The year-over-year margin increase was driven mainly by improved manufacturing efficiencies as a result of our various initiatives.
Full year non-GAAP SG&A as a percentage of sales was 28.6% compared to 13.9% [Phonetic] in 2020 and benefited from higher revenue despite increased employee-related costs and discretionary expenses. Full year non-GAAP R&D was $258.6 million or 8.9% of sales versus $227.9 million or 9.1% in 2020 and full year non-GAAP operating income was 19.8% compared to 17% in 2020, representing significant year-over-year improvement in performance. Lastly, the non-GAAP effective tax rate for the full year of 2021 was 21.2%, which was consistent with our guidance range.
The 21.2% non-GAAP effective tax rate for 2021 was lower than the 24% non-GAAP rate for 2020 is the result of an increase in compensation related to tax deductions. Moving on to the balance sheet. Total cash and short-term investments at the end of 2021 was $875 million compared to $997 million at the end of 2020 and $1.343 billion at the end of the third quarter of 2021.
The change in cash and short-term investments from the third quarter was primarily due to the loan to the Sartorius-Herbst special purpose entity and the payments for the Dropworks acquisition, which was partially offset by cash flow generated from operations. During the fourth quarter, we did not purchase any shares of our stock and we had a total of $223 million available for potential share buybacks. Full year share buybacks was about 90,000 shares for $50 million. In 2020, we purchased about 292,000 shares of our stock for $100 million.
For the fourth quarter of 2021, net cash generated from operating activities was $157.9 million, which compares to $284.7 million in Q4 of 2020. This decrease mainly reflects change in working capital and lower operating profits. For the full year of 2021, net cash generated from operations was $656.5 million versus $575.3 million in 2020. This increase mainly reflects higher full-year operating profits. Adjusted EBITDA for the fourth quarter of 2021 was 19.1% of sales. The adjusted EBITDA in Q4 of 2020 was 25.2%. Full-year adjusted EBITDA including the Sartorius dividend was $696.4 million or about 24.1% compared to 21.7% in 2020.
Net capital expenditures for the fourth quarter of 2021 were $43.2 million and full year capex spend was $120.8 million. Depreciation and amortization for the fourth quarter was $33.7 million and $133.8 million for the full year. Moving on to the non-GAAP guidance for 2022, overall, we are pleased with the performance in 2021, as the global economy is adopting to operating with COVID. Going into 2022, we expect to continue the positive momentum that we established in 2021, however, we expect to see the ongoing supply chain constraints that we experienced in Q4 persist through the first half of 2022.
As a result, we anticipate a lower year-over-year growth in the first half of 2022 with higher growth in the back half of the year. As mentioned earlier, we expect to recover in 2022 about $20 million of revenue carry over from 2021 related to supply chain constraints. We are guiding the currency-neutral revenue growth in 2022 to be between 1% and 2%, which includes about $70 million of COVID related sales that are significantly subsiding from the prior two years. Excluding COVID related savings we estimate, currency neutral revenue growth in 2022 to be between 8.5% and 9.5%.
We estimate about 2% to 3% currency-neutral revenue growth for the Diagnostics Group. The Diagnostics Group year-over-year revenue growth, excluding COVID is expected to be between 3% and 4%. The Life Science group year-over-year currency-neutral revenue growth is expected to be between flat and 1.5% as we project the COVID related sales in 2022 to significantly decline. Excluding COVID related sales, the Life Science grew year-over-year currency-neutral revenue growth is expected to be between 16% and 18%.
We continue to assume that we will experience quarterly revenue fluctuations for process media, although we estimate an overall double-digit growth for the full year. Full year non-GAAP gross margin is projected to be about 57.5%. We plan to offset inflationary cost pressure with targeted price realization, particularly within the Life Science Group. Full year non-GAAP operating margin is projected to be approximately 19%. We estimate the non-GAAP full year tax rate to be between 22% and 23%. Capex is projected to be approximately $140 million and full-year adjusted EBITDA margin to be between 23.5% and 23.8%.
Lastly, I'd like to remind everyone that we will be holding an in-person Investor Day on February 25 at the New York Stock Exchange. This concludes our prepared remarks and we will now open the line to take your questions, operator?
