Highlights
- First quarter revenue of $846.1 million decreased by 16% as
reported with non-respiratory revenue up 5% on a supplemental
combined basis (up 7% in constant currency) and respiratory revenue
down 72% on a supplemental combined basis
- Growth in non-respiratory revenue for the first quarter was
driven by the Labs business unit, primarily due to heightened
instrument delivery and testing demand
- First quarter GAAP EPS of $0.73; adjusted EPS of $1.80, a 78%
decrease from prior year on a supplemental combined basis, largely
reflecting the strength of respiratory revenue in the first quarter
of 2022
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 April 2, 2023.
The Company reported total revenue for the first quarter of 2023
of $846.1 million, compared to $1,002.3 million for the first
quarter of 2022. GAAP diluted earnings per share (EPS) for the
first quarter of 2023 decreased to $0.73, compared to $11.31 for
the first quarter of 2022. GAAP operating income for the first
quarter of 2023 was $99.6 million, compared to $620.7 million for
the first quarter of 2022, and GAAP operating margin was 12% and
62% for the first quarters of 2023 and 2022, respectively. The
first quarter 2023 results include significant one-time charges
related to the integration.
In addition to the Company’s GAAP results, the Company is
providing supplemental combined first quarter 2022 revenues and
adjusted operating results as if Quidel Corporation (“Quidel”) and
Ortho Clinical Diagnostics Holdings plc (“Ortho”) had been combined
for the applicable periods. The following discussion of financial
results is based on supplemental combined information:
First quarter 2023 total revenue of $846.1 million decreased by
44% in constant currency, compared to $1,502.4 million for the
first quarter of 2022. Foreign currency translation negatively
impacted sales growth by approximately 10 basis points for the
first quarter of 2023. Adjusted diluted EPS for the first quarter
of 2023 decreased to $1.80, compared to $8.03 for the first quarter
of 2022. Adjusted EBITDA for the first quarter of 2023 was $245.3
million, compared to $780.8 million in the first quarter of 2022.
Adjusted EBITDA margin for the first quarter of 2023 was 29.0%,
compared to 52.0% for the first quarter of 2022.
“We’re off to an excellent start to the year with strong results
across all geographic regions, double-digit growth in our Labs
business, and better-than-expected Point of Care sales,
demonstrating the power of our newly created scale and breadth of
offerings across the diagnostics continuum,” said Douglas Bryant,
President and Chief Executive Officer of QuidelOrtho. “The strength
of our Labs business was particularly notable, with solid demand
for both consumables and instruments, including standalone and
integrated, as well as automation, setting us up for a stronger
second half of the year.”
“With the integration on track and now entering the final phase,
our macro headwinds dissipating, and demand across all geographies
reaching normalized post-pandemic levels, we are focused on the
execution of our key growth drivers and confident in our ability to
deliver sustainable high-single-digit growth over the coming
years,” Mr. Bryant concluded.
Fiscal Year 2023 Financial Guidance
The Company will provide 2023 financial guidance during its
financial results conference call today.
Conference Call Information
QuidelOrtho will hold a conference call today at 2:00 p.m. PT /
5:00 p.m. ET to discuss its financial results for the first quarter
ended April 2, 2023. 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 404-975-4839 (international) and entering Conference
ID number 036290.
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) unites the power of
Quidel Corporation and Ortho Clinical Diagnostics behind a shared
mission of developing and manufacturing innovative technologies
that raise the performance of diagnostic testing and create better
patient outcomes across the entire healthcare continuum.
Ranked among the world’s largest in vitro diagnostics (IVD)
providers with more than 120 years of collective experience, we
combine industry-leading expertise in immunoassay and molecular
testing with a global footprint in clinical labs and transfusion
medicine.
The Company’s comprehensive product portfolio delivers accuracy,
speed, automation and access, providing critical information when
and where it is needed most. Inspired by a spirit of service,
QuidelOrtho is committed to enhancing the well-being of people
worldwide and happy in the knowledge we are making a difference.
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 include any statements contained herein that
are not strictly historical, including, but not limited to, the
benefits and results of the business combination of Quidel and
Ortho (the “Combinations”) and integration of the businesses of
Quidel and Ortho, and QuidelOrtho’s commercial, integration and
other strategic goals, future financial and operating results, and
future plans, objectives, strategies, expectations and intentions.
These statements in this press release may be identified by words
such as “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. 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: the
challenges and costs of integrating, restructuring and achieving
anticipated synergies as a result of the Combinations; the ability
to retain key employees; and other economic, business, competitive
and/or regulatory factors affecting the business of QuidelOrtho
generally. Additional risks and factors are identified under “Risk
Factors” in QuidelOrtho’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission (the “Commission”) on February
23, 2023 and subsequent reports filed with the Commission. 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.
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. All forward-looking statements are based on
information currently available to QuidelOrtho and speak only as of
the date hereof.
Supplemental Combined Financial Measures
This press release contains unaudited supplemental combined
financial information (“Supplemental Combined Information”) that
gives effect to the Combinations as if Quidel and Ortho had been
combined for the applicable periods. Certain Supplemental Combined
Information presented is based on the historical financial
statements of Quidel and Ortho with reclassification adjustments
only and do not include all of the pro forma adjustments required
under Regulation S-X Article 11 or Accounting Standards
Codification 805, Business Combinations (“ASC 805”). The
Supplemental Combined Information is provided for illustrative
purposes only, may be updated in the future, and is not
necessarily, and should not be assumed to be, indicative of the
Company’s expected results of operations or financial position that
would have been achieved had the Combinations been completed as of
the dates indicated or that may be achieved in any future period.
The Supplemental Combined Information should be considered
supplemental to, and not as a substitute for, pro forma financial
information prepared in accordance with Regulation S-X Article 11
or ASC 805 and should be read in conjunction with the information
contained in the sections entitled “The Combinations,”
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations of Ortho” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations of
Quidel” in QuidelOrtho’s joint proxy statement/prospectus (the
“Joint Proxy Statement/Prospectus”) filed with the Commission on
April 11, 2022 and the historical consolidated financial statements
and related notes appearing elsewhere in, or incorporated into, the
Joint Proxy Statement/Prospectus, and the Company’s subsequent
reports filed with the Commission. The Company’s actual results of
operations and financial position will differ, potentially
significantly, from the Supplemental Combined Information reflected
in this press release as a result of the methodology used to
prepare the Supplemental Combined Information as well as a variety
of factors, including but not limited to the effect of certain
expected financial benefits of the Combinations (such as revenue
and cost synergies), the anticipated costs to achieve these
benefits (including the cost of integration activities), tax
impacts, and changes in operating results following the date of
this press release.
Non-GAAP Financial Measures
This press release contains financial measures, including but
not limited to “constant currency” revenue changes, “adjusted net
income,” “adjusted diluted EPS,” “adjusted EBITDA,” “adjusted
EBITDA margin,” “supplemental combined adjusted net income,”
“supplemental combined adjusted diluted EPS,” “supplemental
combined adjusted EBITDA” and “supplemental combined 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”). “Adjusted net income,” “adjusted EBITDA” and “adjusted
diluted EPS” 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 believes that
“supplemental combined adjusted net income,” “supplemental combined
adjusted diluted EPS,” “supplemental combined adjusted EBITDA” and
“supplemental combined adjusted EBITDA margin” provide helpful
Supplemental Combined Information to assist management and
investors in evaluating the Company’s adjusted operating results as
if Quidel and Ortho had been combined for the applicable periods.
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, including the
non-GAAP Supplemental Combined Information, 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
April 2, 2023(a)
April 3, 2022
Total revenues
$
846.1
$
1,002.3
Cost of sales, excluding amortization of
intangibles
397.5
260.3
Selling, marketing and administrative
202.4
84.8
Research and development
62.3
26.4
Amortization of intangible assets
50.8
7.1
Acquisition and integration costs
29.7
3.0
Other operating expenses
3.8
—
Operating income
99.6
620.7
Interest expense, net
36.7
1.0
Other expense (income), net
2.9
(0.9
)
Income before provision for income
taxes
60.0
620.6
Provision for income taxes
11.2
140.7
Net income
$
48.8
$
479.9
Basic earnings per share
$
0.73
$
11.46
Diluted earnings per share
$
0.73
$
11.31
Weighted-average shares outstanding -
basic
66.6
41.9
Weighted-average shares outstanding -
diluted
67.1
42.4
(a) Includes Ortho results of
operations for the three months ended April 2, 2023.
QuidelOrtho
Condensed Consolidated Balance
Sheets
(Unaudited)
(In millions)
April 2, 2023
January 1, 2023
Cash and cash equivalents
$
353.9
$
292.9
Marketable securities
42.8
52.1
Accounts receivable, net
274.8
453.9
Inventories
528.6
524.1
Prepaid expenses and other current
assets
298.8
252.1
Property, plant and equipment, net
1,361.7
1,339.0
Marketable securities
33.8
21.0
Right-of-use assets
179.4
181.0
Goodwill
2,491.3
2,476.8
Intangible assets, net
3,078.5
3,123.8
Deferred tax asset
16.5
16.4
Other assets
127.0
122.7
Total assets
$
8,787.1
$
8,855.8
Accounts payable
$
241.5
$
283.3
Accrued payroll and related expenses
108.5
139.2
Income tax payable
16.3
51.6
Current portion of borrowings
207.5
207.5
Other current liabilities
334.0
325.4
Operating lease liabilities
183.3
186.4
Long-term borrowings
2,379.6
2,430.8
Deferred tax liability
208.8
213.2
Other liabilities
111.1
83.8
Total liabilities
3,790.6
3,921.2
Total stockholders’ equity
4,996.5
4,934.6
Total liabilities and stockholders’
equity
$
8,787.1
$
8,855.8
QuidelOrtho
Condensed Consolidated Statements
of Cash Flows
(Unaudited)
(In millions)
Three Months Ended
April 2, 2023(a)
April 3, 2022
Cash provided by operating activities
$
188.9
$
500.9
Cash used for investing activities
(68.9
)
(24.7
)
Cash used for financing activities
(59.6
)
(3.4
)
Effect of exchange rates on cash
0.6
(0.1
)
Net increase in cash, cash equivalents and
restricted cash
61.0
472.7
Cash, cash equivalents and restricted cash
at beginning of period
293.9
802.8
Cash, cash equivalents and restricted cash
at end of period
$
354.9
$
1,275.5
Reconciliation to amounts within the
consolidated balance sheets:
Cash and cash equivalents
$
353.9
$
1,275.5
Restricted cash in Other assets
1.0
—
Cash, cash equivalents and restricted
cash
$
354.9
$
1,275.5
(a) Includes Ortho results of operations
for the three months ended April 2, 2023.
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted Net Income
(In millions, except per share
data; unaudited)
Three Months Ended
April 2, 2023(a)
Diluted EPS
April 3, 2022
Diluted EPS
Net income
$
48.8
$
0.73
$
479.9
$
11.31
Adjustments:
Amortization of intangibles
50.8
7.1
Acquisition and integration costs
29.7
3.0
Incremental depreciation on PP&E fair
value adjustment
8.6
—
Noncash interest expense for deferred
consideration
0.6
0.9
Amortization of deferred cloud computing
implementation costs
1.6
1.0
Employee compensation charges and other
costs
1.5
—
EU medical device regulation transition
costs
0.8
—
Impairment of long-lived assets
0.5
—
Income tax impact of adjustments
(22.1
)
(2.6
)
Discrete tax items
0.2
—
Adjusted net income
$
121.0
$
1.80
$
489.3
$
11.54
Ortho pre-combination adjusted net
income
—
57.0
Supplemental combined adjusted net
income
$
121.0
$
1.80
$
546.3
$
8.03
Weighted-average shares outstanding -
diluted
67.1
42.4
Weighted-average shares outstanding -
diluted - supplemental combined
67.1
68.0
(a) Adjusted net income includes
Ortho activities for the three months ended April 2, 2023.
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted EBITDA
(In millions, unaudited)
Three Months Ended
April 2, 2023(a)
April 3, 2022
Net income
$
48.8
$
479.9
Depreciation and amortization
114.2
15.3
Interest expense, net
36.7
1.0
Provision for income taxes
11.2
140.7
Employee compensation charges and other
costs
1.5
—
Acquisition and integration costs
29.7
3.0
EU medical device regulation transition
costs
0.8
—
Amortization of deferred cloud computing
implementation costs
1.6
1.0
Tax indemnification expense
0.3
—
Impairment of long-lived assets
0.5
—
Adjusted EBITDA
$
245.3
$
640.9
Ortho pre-combination Adjusted EBITDA
—
139.9
Supplemental combined Adjusted EBITDA
$
245.3
$
780.8
(a) Adjusted EBITDA includes
Ortho activities for the three months ended April 2, 2023.
QuidelOrtho
Supplemental Combined Revenues by
Business Unit and Region
(In millions, unaudited)
Three Months Ended
April 2, 2023
April 3, 2022
% Change
Currency Impact
Constant Currency(a)
Respiratory revenues
$
265.6
$
947.3
(72.0
)%
(0.1
)%
(71.9
)%
Non-Respiratory revenues
580.5
555.1
4.6
%
(2.2
)%
6.8
%
Total supplemental combined revenues
(b)
$
846.1
$
1,502.4
(43.7
)%
(0.1
)%
(43.6
)%
Three Months Ended
April 2, 2023
April 3, 2022
% Change
Currency Impact
Constant Currency (a)
Respiratory Revenue
Impact
Constant Currency(a)
Non-Respiratory Revenue
Labs (b)
$
370.7
$
339.7
9.1
%
(2.1
)%
11.2
%
(3.6
)%
14.8
%
Transfusion Medicine
155.9
173.7
(10.2
)%
(2.2
)%
(8.0
)%
—
%
(8.0
)%
Point of Care
308.1
943.0
(67.3
)%
(0.1
)%
(67.2
)%
(74.4
)%
7.2
%
Molecular Diagnostics
11.4
46.0
(75.2
)%
0.2
%
(75.4
)%
(50.4
)%
(25.0
)%
Total supplemental combined revenues
(b)
$
846.1
$
1,502.4
(43.7
)%
(0.1
)%
(43.6
)%
(50.4
)%
6.8
%
Three Months Ended
April 2, 2023
April 3, 2022
% Change
Currency Impact
Constant Currency(a)
Respiratory Revenue
Impact
Constant Currency(a)
Non-Respiratory Revenue
North America
$
582.8
$
1,237.8
(52.9
)%
(0.1
)%
(52.8
)%
(57.3
)%
4.5
%
EMEA
81.3
84.0
(3.2
)%
(3.5
)%
0.3
%
(3.2
)%
3.5
%
China
70.6
63.3
11.5
%
(8.4
)%
19.9
%
(0.9
)%
20.8
%
Other
111.4
117.3
(5.0
)%
(3.4
)%
(1.6
)%
(10.1
)%
8.5
%
Total supplemental combined revenues
(b)
$
846.1
$
1,502.4
(43.7
)%
(0.1
)%
(43.6
)%
(50.4
)%
6.8
%
Tables above include Ortho
revenues as if the acquisition had occurred on January 2, 2022.
(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 substitute for
financial information prepared in accordance with GAAP.
(b)
The three months ended April 2,
2023 includes an approximate $21 million settlement award from a
third party related to one of the Company’s collaboration
agreements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230503005831/en/
Investor Contact: Bryan Brokmeier, CFA
IR@QuidelOrtho.com
Media Contact: media@QuidelOrtho.com
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