Net sales for the fourth quarter of 2020 were $789.8 million, which is a 26.5% increase on a reported basis, versus $624.4 million in Q4 of 2019.
On a currency neutral basis, sales increased 24.4%.
The fourth quarter sales included $32 million of damages award related to intellectual property litigation with 10x Genomics, covering the period between 2015 and 2018.
Excluding the $32 million, the fourth quarter year-over-year currency neutral revenue growth was 19.4%.
The fourth quarter year-over-year revenue growth also benefited from an easy compare of about $10 million revenue carryover to Q1 of 2020, related to the December 2019 cyberattack.
Generally, we are seeing most academic and diagnostic labs now running between 70% and 90% capacity, which is similar to what we saw in Q3.
We estimate that COVID-19 related sales were about $132 million in the quarter.
Sales of Life Science group in the fourth quarter of 2020 were $428.5 million, compared to $242 million in Q4 of 2019, which is a 77.1% increase on a reported basis and a 73.9% increase on a currency neutral basis, and it was driven by our PCR product lines, as well as strong performance in the biopharma segment.
The fourth quarter revenue also included a $32 million damages award related to intellectual property litigation.
Excluding that $32 million damages award, the currency neutral revenue growth was 60.9%.
Excluding process media sales and the $32 million damages award, the underlying Life Science business grew 64.6% on a currency neutral basis versus Q4 of 2019.
Sales of Clinical Diagnostics products in the fourth quarter were $359.6 million compared to $379 million in Q4 of 2019, which is a 5.1% decline on a reported basis and a 6.6% decline on a currency neutral basis.
The reported gross margin for the fourth quarter of 2020 was 58.3% on a GAAP basis and compares to 52.9% in Q4 of 2019.
The current quarter gross margin benefited mainly from better product mix, lower service costs, higher manufacturing utilization, as well as $23 million [Phonetic] gross margin benefit, associated with the 10X Genomics damages award.
Amortization related to prior acquisitions, recorded in cost of goods sold was $4.6 million compared to $4.5 million in Q4 of 2019.
SG&A expenses for Q4 of 2020 were $219.1 million or 27.7% of sales compared to $214.2 million, or 34.3% in Q4 of 2019.
Total amortization expense related to acquisitions recorded in SG&A for the quarter was $2.4 million versus $2.1 million in Q4 of 2019.
Research and Development expense in Q4 was $65.8 million or 8.3% of sales compared to $57.1 million, or 9.1% of sales in Q4 of 2019.
Q4 operating income was $175.2 million or 22.2% of sales, compared to $59.2 million or 9.5% of sales in Q4 of 2019.
Looking below the operating line, the change in fair market value of equity securities holdings added $904 million of income to the reported results and this is substantially related to holdings of the shares of Sartorius AG.
During the quarter, interest in other income resulted in a net expense of $1 million compared to $5.8 million of expense last year.
Our GAAP effective tax rate for the fourth quarter of 2020 was 22.2% compared to 20.9% for the same period in 2019.
Reported net income for the fourth quarter was $839.1 million, and diluted earnings per share were $27.81.
In sales, we have excluded the $32 million damages award.
In cost of goods sold, we have excluded $8.7 million IP-license costs associated with the damages award.
$4.6 million of amortization of purchased intangibles, and a small restructuring benefit.
These exclusions moved the gross margin for the fourth quarter of 2020 to a non-GAAP gross margin of 58.2% versus 54.1% in Q4 of 2019.
Non-GAAP SG&A in the fourth quarter of 2020 was 28.2% versus 31.7% in Q4 of 2019.
In SG&A on a non-GAAP basis, we have excluded amortization of purchase intangibles of $2.4 million, legal related expenses of $6.3 million and restructuring and acquisition-related benefits of $3.1 million.
Non-GAAP R&D expense in the fourth quarter of 2020 was 8.7% versus 8.2% in Q4 of 2019.
The cumulative sum of these non-GAAP adjustments result in moving the quarterly operating margin from 22.2% on a GAAP basis to 21.4% on a non-GAAP basis.
These non-GAAP operating margin compares to a non-GAAP operating margin in Q4 of 2019 of 14.3%.
We have also excluded certain items below the operating line, which are the increase in value of the Sartorius equity holdings of $904.3 million, $2.1 million associated with venture investments and $3 million of interest income, associated with the 10X damages award.
Our non-GAAP effective tax rate for the fourth quarter of 2020 was 24.3% compared to 17.7% in 2019.
And finally, non-GAAP net income for the fourth quarter of 2020 was $121 million or $4.01 diluted earnings per share, compared to $70 million and $2.32 per share in Q4 of 2019.
Moving on to the full year results, net sales for the full year of 2020 were $2.546 billion on a reported basis, excluding the 10X damages award of $32 million, sales were $2.514 billion which is 8.9% growth on a currency neutral basis.
We estimate that COVID-19 related sales were about $313 million.
Sales of Life Science group for 2020 were $1.23108 billion.
Excluding the 10X damages award of $32 million, the year-over-year growth was 35% on a currency neutral basis.
Sales of Clinical Diagnostics products for 2020 were $1.305 billion which is down 7.1% on a currency neutral basis.
The full year non-GAAP gross margin was 56.9% compared to 55% in 2019.
Full year non-GAAP SG&A was 30.9% compared to 34.4% in 2019.
Full year non-GAAP R&D was 9.1% versus 8.5% in 2019 and full year non-GAAP operating income was 17% compared to 12% in 2019.
Lastly, the non-GAAP effective tax rate for the full year of 2020 was 24%, compared to 24.1% in 2019.
The non-GAAP effective tax rate for 2020 was consistent with our guidance of 24%.
Moving on to the balance sheet; total cash and short-term investments at the end of 2020 was $997 million, compared to $1.120 billion at the end of 2019 and $1.160 billion at the end of the third quarter of 2020.
In December, we repaid the $425 million of outstanding senior notes.
Year-end inventory decreased by about $18 million from the third quarter of 2020.
We have a total of $273 million available for potential share buybacks.
Full year share buybacks was about 292,000 shares for $100 million.
In 2019, we purchased about 88,000 shares of our stock for $28 million.
For the fourth quarter of 2020, net cash generated from operating activities was $284.7 million, which compares to $159.8 million in Q4 of 2019.
For the full year of 2020, net cash generated from operations was $575.3 million versus $457.9 million in 2019.
The adjusted EBITDA for the fourth quarter of 2020 was 25.2% of sales.
The adjusted EBITDA in Q4 of 2019 was 18.7%.
Full year adjusted EBITDA, included the Sartorius dividend, was $546.4 million or about 21.7% compared to 17.5% in 2019.
Net capital expenditures for the fourth quarter of 2020 were $39.2 million and full year capex spend was $98.9 million.
Depreciation and amortization for the fourth quarter was $36.2 million and $138.1 million for the full year.
We project revenues to grow to an overall range of $2.75 billion and $2.85 billion by the end of 2023.
We expect non-GAAP gross margin in 2023 to land in a range of 57% to 57.5%.
Adjusted EBITDA margin should be in the range of 23% and 24%, based on top-line growth, productivity improvements, and SG&A leverage.
The restructuring plan is expected to eliminate a total of approximately 530 positions, approximately 200 positions in manufacturing, and 330 positions across our SG&A and R&D functions.
And subsequently creation of a total of about 325 new positions, approximately 100 new positions in manufacturing and 225 new positions across SG&A and R&D functions.
As a result of this restructuring plan, we expect to incur between approximately $125 million and $130 million in total costs, which we anticipate will consist of approximately $86 million cash expenditures, in the form of one-time termination benefits to the affected employees.
Approximately $19 million in capital expenses associated with the restructuring plan, and about $20 million to $25 million in one-time transaction cost.
We anticipate about $80 million to $90 million of restructuring charges related to this restructuring plan will be recorded in the first quarter of 2021, with the balance recorded by the end of 2022.
We are guiding a currency neutral revenue growth in 2021 to be between 4.5% and 5%.
We estimate about 10% to 11% revenue growth for the Diagnostics group.
Full year non-GAAP gross margin is projected between 56.2% and 56.5%, and full year non-GAAP operating margin to be between 16% and 16.5%.
We estimate the non-GAAP full year tax rate to be between 24% and 25%.
Capex is projected between $120 million and $130 million and full year adjusted EBITDA margin of about 21%.

Summary:
Net sales for the fourth quarter of 2020 were $789.8 million, which is a 26.5% increase on a reported basis, versus $624.4 million in Q4 of 2019.
Reported net income for the fourth quarter was $839.1 million, and diluted earnings per share were $27.81.
And finally, non-GAAP net income for the fourth quarter of 2020 was $121 million or $4.01 diluted earnings per share, compared to $70 million and $2.32 per share in Q4 of 2019.
We are guiding a currency neutral revenue growth in 2021 to be between 4.5% and 5%.
Full year non-GAAP gross margin is projected between 56.2% and 56.5%, and full year non-GAAP operating margin to be between 16% and 16.5%.