- Global year-over-year revenue growth of 5% as reported and 6%
in constant currency, excluding COVID-19 revenue - - Cost reduction
initiatives well underway, headcount reductions expected to deliver
approximately $100 million in annualized savings - - Company
suspends 2024 financial guidance while it assesses business under
new President and Chief Executive Officer -
First Quarter 2024 Results and Recent Highlights
- Revenue was $711 million, as reported:
- Non-respiratory revenue was flat at $574 million compared to
the prior year period, as reported and in constant currency
- Excluding the one-time third-party settlement of $21 million in
the prior year period, non-respiratory revenue grew 3% as reported
and 4% on a constant currency basis
- Respiratory revenue was $137 million, a 48% decrease as
reported and in constant currency, primarily due to lower COVID-19
revenue in the first quarter of 2024 compared to the prior year
period
- Excluding COVID-19-related government orders of $143 million in
Q1 2023 and $7 million in Q1 2024, which are not expected to recur,
respiratory revenue grew 6% as reported and in constant
currency
- Secured credit agreement amendment to provide additional
flexibility through 2027
- Appointed Brian J. Blaser as President and Chief Executive
Officer, effective May 6, 2024
QuidelOrtho Corporation (Nasdaq: QDEL) (the “Company” or
“QuidelOrtho”), a global provider of innovative in-vitro diagnostic
technologies designed for point-of-care settings, clinical labs,
and transfusion medicine, today announced financial results for the
first quarter ended March 31, 2024.
“During the first quarter, we achieved solid business
performance with 6% top-line constant currency revenue growth
across our global regions, excluding COVID-19 revenue,” said
Michael S. Iskra, EVP and Chief Commercial Officer, QuidelOrtho.
“Additionally, we have been steadfast in implementing company-wide
cost initiatives, including margin restoration, which includes
headcount reductions that are expected to deliver approximately
$100 million in annualized savings. While these actions are never
easy, they are a necessary step in positioning the Company for
durable long-term growth.”
First Quarter 2024
The Company reported total revenue for the first quarter of 2024
of $711 million, compared to $846 million in the prior year period.
The decrease in total revenue was primarily due to lower COVID-19
revenue in the first quarter of 2024 compared to the prior year
period. Foreign currency translation did not significantly impact
first quarter 2024 results. GAAP diluted loss per share for the
first quarter of 2024 was $25.50, compared to diluted earnings per
share (“EPS”) of $0.73 in the prior year period. GAAP operating
loss for the first quarter of 2024 was $1.76 billion, compared to
operating income of $100 million in the prior year period. The
first quarter of 2024 GAAP operating loss included a non-cash
goodwill impairment charge of approximately $1.74 billion for the
North America reporting unit due to the decrease in the estimated
fair value, which was consistent with the decline in the Company’s
market capitalization during the three months ended March 31, 2024.
As a result of the goodwill impairment charge, GAAP operating
margin was (247%) compared to 12% in the prior year period. First
quarter 2024 results included $23 million in integration-related
charges.
Adjusted diluted EPS for the first quarter of 2024 was $0.44,
compared to $1.80 in the prior year period. Adjusted EBITDA was
$132 million, compared to $245 million in the prior year period.
Adjusted EBITDA margin was 19%, compared to 29% in the prior year
period. The year-over-year change in adjusted diluted EPS and
adjusted EBITDA was primarily due to lower COVID-19 revenue.
Fiscal Year 2024 Financial Guidance
Following the appointment of Brian J. Blaser as President and
Chief Executive Officer, QuidelOrtho is suspending its 2024
financial guidance while it assesses the business under its new
President and Chief Executive Officer. The Company plans to provide
an update in today’s earnings conference call.
Conference Call Information
QuidelOrtho will hold a conference call today at 2:00 p.m. PDT /
5:00 p.m. EDT to discuss its financial results for the first
quarter ended March 31, 2024. Interested parties can access the
call on the “Events & Presentations” section of the “Investor
Relations” page of the Company’s website at
https://ir.quidelortho.com/. Presentation materials will also be
posted to the “Events & Presentations” section of the “Investor
Relations” page of the Company’s website at the time of the call.
Those unable to access the webcast may join the call via phone by
dialing 833-470-1428 (domestic) or +1 929-526-1599 (international)
and entering Conference ID number 295379.
A replay of the conference call will be available shortly after
the event on the “Investor Relations” page of the Company’s
website, under the “Events & Presentations” section.
About QuidelOrtho Corporation
QuidelOrtho Corporation (Nasdaq: QDEL) is a world leader in
in-vitro diagnostics, developing and manufacturing intelligent
solutions that transform data into understanding and action for
more people in more places every day.
Offering industry-leading expertise in immunoassay and molecular
testing, clinical chemistry, and transfusion medicine, bringing
fast, accurate and reliable diagnostics when and where they are
needed – from home to hospital, lab to clinic. So that patients,
clinicians and health officials can spot trends sooner, respond
quicker and chart the course ahead with accuracy and
confidence.
Building upon its many years of groundbreaking innovation,
QuidelOrtho continues to partner with customers across the
healthcare continuum and around the globe to forge a new diagnostic
frontier. One where insights and solutions know no bounds,
expertise seamlessly connects and a more informed path is
illuminated for each of us.
QuidelOrtho is advancing diagnostics to power a healthier
future.
For more information, please visit www.quidelortho.com. Source:
QuidelOrtho Corporation
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements are any statement contained herein that is
not strictly historical, including, but not limited to,
QuidelOrtho’s commercial, integration, transformation and other
strategic goals, future financial condition and operating results,
including results of cost initiatives and operating flexibility
achieved by the credit agreement amendment, and other future plans,
objectives, strategies, expectations and intentions. Without
limiting the foregoing, the words “may,” “will,” “would,” “should,”
“might,” “expect,” “anticipate,” “believe,” “estimate,” “plan,”
“intend,” “goal,” “project,” “strategy,” “future,” “continue” or
similar words, expressions or the negative of such terms or other
comparable terminology are intended to identify forward-looking
statements. Such statements are based on the beliefs and
expectations of QuidelOrtho’s management as of today and are
subject to significant known and unknown risks and uncertainties.
Actual results or outcomes may differ significantly from those set
forth or implied in the forward-looking statements. The following
factors, among others, could cause actual results to differ from
those set forth or implied in the forward-looking statements:
supply chain, production, logistics, distribution and labor
disruptions and challenges; the challenges and costs of
integrating, restructuring and achieving anticipated synergies as a
result of the business combination of Quidel Corporation and Ortho
Clinical Diagnostics Holdings plc; and other macroeconomic,
geopolitical, market, business, competitive and/or regulatory
factors affecting the business of QuidelOrtho generally, including
those discussed in QuidelOrtho’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2023 and subsequent reports filed
with the Securities and Exchange Commission (the “Commission”),
including under Part I, Item 1A, “Risk Factors” of the Form 10-K.
You should not rely on forward-looking statements as predictions of
future events because these statements are based on assumptions
that may not come true and are speculative by their nature. All
forward-looking statements are based on information currently
available to QuidelOrtho and speak only as of the date hereof.
QuidelOrtho undertakes no obligation to update any of the
forward-looking information or time-sensitive information included
in this press release, whether as a result of new information,
future events, changed expectations or otherwise, except as
required by law.
Non-GAAP Financial Measures
This press release contains financial measures, including but
not limited to “constant currency” revenue and revenue changes,
“constant currency, ex-COVID-19” revenue and revenue changes,
revenue ex-COVID-19, “adjusted net income,” “adjusted diluted EPS,”
“adjusted EBITDA” and “adjusted EBITDA margin,” which are
considered non-GAAP financial measures under applicable rules and
regulations of the Commission. These non-GAAP financial measures
should be considered supplemental to, and not a substitute for,
financial information prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”). “Constant currency”
revenue and revenue changes, “constant currency, ex-COVID-19”
revenue and revenue changes, revenue ex-COVID-19, “adjusted net
income,” “adjusted diluted EPS,” “adjusted EBITDA” and “adjusted
EBITDA margin” eliminate impacts of certain non-cash, unusual or
other items that the Company does not consider indicative of its
ongoing operating performance, and the Company generally uses these
non-GAAP financial measures to facilitate management’s financial
and operational decision-making, including evaluation of the
Company’s historical operating results and comparison to
competitors’ operating results. The Company’s definitions of these
non-GAAP measures may differ from similarly titled measures used by
others. These non-GAAP financial measures reflect an additional way
of viewing aspects of the Company’s operations that, when viewed
with GAAP results and the reconciliations to corresponding GAAP
financial measures, may provide a more complete understanding of
factors and trends affecting the Company’s business. Because
non-GAAP financial measures exclude the effect of items that will
increase or decrease the Company’s reported results of operations,
management strongly encourages investors to review the Company’s
consolidated financial statements and reports filed with the
Commission in their entirety. Reconciliations of the non-GAAP
financial measures to the most directly comparable GAAP financial
measures are included in the tables accompanying this press
release.
QuidelOrtho
Consolidated Statements of
Operations
(Unaudited)
(In millions except per share
data)
Three Months Ended
March 31, 2024
April 2, 2023
Total revenues
$
711.0
$
846.1
Cost of sales, excluding amortization of
intangibles
378.9
397.5
Selling, marketing and administrative
204.7
202.4
Research and development
59.2
62.3
Amortization of intangible assets
51.7
50.8
Acquisition and integration costs
22.6
29.7
Goodwill impairment charge
1,743.9
—
Other operating expenses
8.0
3.8
Operating (loss) income
(1,758.0
)
99.6
Interest expense, net
39.0
36.7
Other expense, net
1.9
2.9
(Loss) income before income taxes
(1,798.9
)
60.0
(Benefit from) provision for income
taxes
(92.9
)
11.2
Net (loss) income
$
(1,706.0
)
$
48.8
Basic (loss) earnings per share
$
(25.50
)
$
0.73
Diluted (loss) earnings per share
$
(25.50
)
$
0.73
Weighted-average shares outstanding -
basic
66.9
66.6
Weighted-average shares outstanding -
diluted
66.9
67.1
QuidelOrtho
Condensed Consolidated Balance
Sheets
(Unaudited)
(In millions)
March 31, 2024
December 31, 2023
Cash and cash equivalents
$
78.5
$
118.9
Marketable securities
—
48.4
Accounts receivable, net
271.7
303.3
Inventories
583.1
577.8
Prepaid expenses and other current
assets
279.1
262.1
Property, plant and equipment, net
1,441.3
1,443.8
Marketable securities
—
7.4
Right-of-use assets
180.5
169.6
Goodwill
734.8
2,492.0
Intangible assets, net
2,887.3
2,934.3
Deferred tax asset
24.9
25.9
Other assets
222.1
179.6
Total assets
$
6,703.3
$
8,563.1
Accounts payable
$
249.6
$
294.8
Accrued payroll and related expenses
108.9
84.8
Income tax payable
9.5
11.1
Current portion of borrowings
161.1
139.8
Other current liabilities
250.7
303.3
Operating lease liabilities
181.8
172.8
Long-term borrowings
2,241.0
2,274.8
Deferred tax liability
125.6
192.2
Other liabilities
67.4
83.6
Total liabilities
3,395.6
3,557.2
Total stockholders’ equity
3,307.7
5,005.9
Total liabilities and stockholders’
equity
$
6,703.3
$
8,563.1
QuidelOrtho
Condensed Consolidated Statements
of Cash Flows
(Unaudited)
(In millions)
Three Months Ended
March 31, 2024
April 2, 2023
Cash (used for) provided by operating
activities
$
(0.7
)
$
188.9
Cash used for investing activities
(20.2
)
(68.9
)
Cash used for financing activities
(18.5
)
(59.6
)
Effect of exchange rates on cash
(1.1
)
0.6
Net (decrease) increase in cash, cash
equivalents and restricted cash
(40.5
)
61.0
Cash, cash equivalents and restricted cash
at beginning of period
119.5
293.9
Cash, cash equivalents and restricted cash
at end of period
$
79.0
$
354.9
Reconciliation to amounts within the
consolidated balance sheets:
Cash and cash equivalents
$
78.5
$
353.9
Restricted cash in Other assets
0.5
1.0
Cash, cash equivalents and restricted
cash
$
79.0
$
354.9
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted Net Income
(In millions, except per share
data; unaudited)
Three Months Ended
March 31, 2024
Diluted EPS
April 2, 2023
Diluted EPS
Net (loss) income
$
(1,706.0
)
$
(25.50
)
$
48.8
$
0.73
Adjustments:
Goodwill impairment charge
1,743.9
—
Amortization of intangibles
51.7
50.8
Acquisition and integration costs
22.6
29.7
Incremental depreciation on PP&E fair
value adjustment
9.1
8.6
Employee compensation charges
5.6
—
Amortization of deferred cloud computing
implementation costs
2.9
1.6
EU medical device regulation transition
costs
0.6
0.8
Non-cash interest expense for deferred
consideration
—
0.6
Impairment of long-lived assets
—
0.5
Other adjustments
1.4
1.5
Income tax impact of adjustments
(101.4
)
(22.1
)
Discrete tax items
(0.6
)
0.2
Adjusted net income
$
29.8
$
0.44
$
121.0
$
1.80
Weighted-average shares outstanding -
diluted
67.3
67.1
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted EBITDA
(In millions, unaudited)
Three Months Ended
March 31, 2024
April 2, 2023
Net (loss) income
$
(1,706.0
)
$
48.8
Depreciation and amortization
114.9
114.2
Interest expense, net
39.0
36.7
(Benefit from) provision for income
taxes
(92.9
)
11.2
Goodwill impairment charge
1,743.9
—
Acquisition and integration costs
22.6
29.7
Employee compensation charges
5.6
—
Amortization of deferred cloud computing
implementation costs
2.9
1.6
EU medical device regulation transition
costs
0.6
0.8
Impairment of long-lived assets
—
0.5
Tax indemnification expense
—
0.3
Other adjustments
1.4
1.5
Adjusted EBITDA
$
132.0
$
245.3
QuidelOrtho
Revenues by Business Unit and
Region
(In millions, unaudited)
Three Months Ended
March 31, 2024
April 2, 2023
% Change
Currency Impact
Constant Currency (a)
Respiratory revenues
$
137.3
$
265.6
(48.3
)%
—
%
(48.3
)%
Non-Respiratory revenues
573.7
580.5
(1.2
)%
(1.0
)%
(0.2
)%
Total revenues
$
711.0
$
846.1
(16.0
)%
(0.5
)%
(15.5
)%
COVID-19 revenue impact
(50.2
)
(216.1
)
(76.8
)%
—
%
(76.8
)%
Total revenues ex COVID-19 revenue
$
660.8
$
630.0
4.9
%
(1.0
)%
5.9
%
Three Months Ended
March 31, 2024
April 2, 2023
% Change
Currency Impact
Constant Currency (a)
COVID-19 revenue
impact
Constant Currency (a)
ex COVID-19 Revenue
Labs
$
356.9
$
370.7
(3.7
)%
(0.8
)%
(2.9
)%
(0.6
)%
(2.3
)%
Transfusion Medicine
160.3
155.9
2.8
%
(1.3
)%
4.1
%
—
%
4.1
%
Point of Care
186.6
308.1
(39.4
)%
(0.1
)%
(39.3
)%
(76.8
)%
37.5
%
Molecular Diagnostics
7.2
11.4
(36.8
)%
(0.1
)%
(36.7
)%
(52.0
)%
15.3
%
Total revenues
$
711.0
$
846.1
(16.0
)%
(0.5
)%
(15.5
)%
(21.4
)%
5.9
%
Three Months Ended
March 31, 2024
April 2, 2023
% Change
Currency Impact
Constant Currency (a)
COVID-19 revenue
impact
Constant Currency (a)
ex COVID-19 Revenue
North America
$
433.9
$
582.8
(25.5
)%
(0.2
)%
(25.3
)%
(30.1
)%
4.8
%
EMEA
84.8
81.3
4.3
%
0.5
%
3.8
%
(2.0
)%
5.8
%
China
76.1
70.6
7.8
%
(4.3
)%
12.1
%
—
%
12.1
%
Other
116.2
111.4
4.3
%
(1.6
)%
5.9
%
0.4
%
5.5
%
Total revenues
$
711.0
$
846.1
(16.0
)%
(0.5
)%
(15.5
)%
(21.4
)%
5.9
%
(a)
The term “constant currency” means we have translated local
currency revenues for all reporting periods to U.S. dollars using
currency exchange rates held constant for each period. This
additional non-GAAP financial information is not meant to be
considered in isolation from or as a substitute for financial
information prepared in accordance with GAAP.
QuidelOrtho
Revenues reconciliation to
non-GAAP measures
(In millions, unaudited)
Three Months Ended
March 31, 2024
April 2, 2023
% Change
Currency Impact
Constant Currency (a)
Respiratory revenues
$
137.3
$
265.6
(48.3
)%
—
%
(48.3
)%
COVID-19-related government orders
(6.7
)
(142.6
)
(95.3
)%
—
%
(95.3
)%
Respiratory Revenue ex COVID-19-related
government orders
$
130.6
$
123.0
6.2
%
—
%
6.2
%
Three Months Ended
March 31, 2024
April 2, 2023
% Change
Currency Impact
Constant Currency (a)
Non-Respiratory revenues
$
573.7
$
580.5
(1.2
)%
(1.0
)%
(0.2
)%
One-time third party settlement
—
(20.7
)
(100.0
)%
—
%
(100.0
)%
Non-Respiratory Revenue ex One-time third
party settlement
$
573.7
$
559.8
2.5
%
(1.0
)%
3.5
%
(a)
The term “constant currency” means we have translated local
currency revenues for all reporting periods to U.S. dollars using
currency exchange rates held constant for each period. This
additional non-GAAP financial information is not meant to be
considered in isolation from or as a substitute for financial
information prepared in accordance with GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508696394/en/
Investor Contact: Juliet Cunningham Vice President,
Investor Relations IR@quidelortho.com
Media Contact: D. Nikki Wheeler Senior Director,
Corporate Communications media@quidelortho.com
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