Quidel Corporation (NASDAQ: QDEL), a provider of rapid
diagnostic testing solutions, cellular-based virology assays and
molecular diagnostic systems, announced today financial results for
the first quarter ended March 31, 2018.
First Quarter 2018 Highlights
- Total revenue was $169.1 million as
compared to $73.7 million in the first quarter of 2017.
- Cardiac Immunoassay revenue was $68.4
million.
- Influenza revenue increased 59% from
the first quarter of 2017 to $64.6 million.
- Total Rapid Immunoassay revenue
increased 40% from the first quarter of 2017.
- Reduced debt by over $182.0 million
through sale/leaseback transaction of the Summers Ridge facility
and convertible note exchange.
- Reported GAAP EPS of $0.86 per
diluted share in the first quarter of 2018, as compared
to $0.42 per diluted share in the first quarter of 2017 and
reported non-GAAP EPS of $1.29 per diluted share in the first
quarter of 2018, as compared to $0.45 per diluted share in the
first quarter of 2017.
- Received 510(k) clearance for Sofia
Lyme assay on Sofia® 2 Immunoassay Analyzer.
- Re-introduced CLIA waived QuickVue®
Influenza A+B test, now meets FDA's Class II RIDT
requirements.
First Quarter 2018 Results
Total revenue for the first quarter of 2018 was $169.1 million,
versus $73.7 million in the first quarter of 2017. The 130%
increase in sales from the first quarter of 2017 was driven by
incremental revenue from the acquired Cardiac Immunoassay business,
as well as 40% revenue growth from the Rapid Immunoassay business,
primarily driven by sales of Influenza immunoassay products.
Cardiac Immunoassay revenue, which includes revenues from the
Triage, Triage Toxicology and BNP products acquired in October
2017, totaled $68.4 million in the first quarter of 2018. Rapid
Immunoassay product revenue (which includes QuickVue, Sofia and Eye
Health products) increased 40% in the first quarter of 2018 to
$80.7 million, led by a 131% rise in Sofia revenue, while QuickVue
sales declined 34% from the first quarter of 2017. Molecular
Diagnostic Solutions revenue increased 65% to $5.1 million, led by
178% revenue growth from Solana, our instrumented molecular
diagnostic system. Specialized Diagnostic Solutions revenue, which
includes revenue from Virology/DHI, Specialty and Other, increased
14% from the first quarter of 2017 to $14.9 million, due to growth
in both Virology and Specialty products.
“We had a great quarter on many fronts, and revenue growth was
strong and broad-based. Cardiac Immunoassay revenues in the quarter
confirmed our belief in the underlying market's demand for Triage
products. Also, we made steady progress in integrating the Triage
and Beckman BNP businesses, and we continue to leverage our
stronger sales channel and strengthen our international presence,”
said Douglas Bryant, president and CEO of Quidel Corporation.
"Organically, we also grew the Rapid Immunoassay business in the
quarter by capitalizing on a very strong Influenza season and
driving Sofia 2 and Solana instrument placements. In the quarter,
we also de-levered the business by a considerable sum through a
couple executed transactions. Overall, the first quarter presented
a solid start to the year for the new Quidel, as we position
ourselves for long-term growth.”
Gross Profit in the first quarter of 2018 increased to $106.3
million, the result of increased sales volumes associated with the
acquired Triage and BNP businesses and Rapid Immunoassay products,
as well as favorable product mix. Overall, gross margin for the
quarter was 63% as compared to 66% for the same period last year.
Amortization of intangibles reduced the gross margin by 2
percentage points, and the Triage/BNP inventory step-up of fair
value reduced the consolidated gross margin by an additional 2
percentage points. R&D expense increased by $4.7 million in the
first quarter as compared to the same period last year, primarily
due to the increase in R&D personnel related to the acquired
Triage business. Sales and Marketing expense increased by $14.3
million in the first quarter of 2018, as compared to the first
quarter of 2017, largely due to incremental personnel costs
associated with the Triage business. G&A expense increased by
$3.4 million in the quarter, primarily due to higher incentive and
stock-based compensation as well as costs associated with the
Triage and BNP businesses. Acquisition and Integration Costs were
$3.5 million, driven by acquisition costs associated with the
Triage and BNP businesses. Interest expense was $7.9 million in the
quarter, loss on extinguishment of debt includes one-time costs of
$3.0 million related to the partial write down of unamortized debt
issuance costs, and $1.6 million loss associated with the
convertible senior note exchange agreements.
Net income for the first quarter of 2018 was $34.0 million, or
$0.86 per diluted share, as compared to net income of $14.3
million, or $0.42 per diluted share, for the first quarter of 2017.
On a non-GAAP basis, net income for the first quarter of 2018 was
$54.3 million, or $1.29 per diluted share, as compared to net
income of $15.3 million, or $0.45 per diluted share, for the same
period in 2017.
Non-GAAP Financial Information
The Company is providing non-GAAP financial information to
exclude the effect of stock-based compensation, amortization of
intangibles, non-cash interest expense, impact of the valuation
allowance for deferred tax assets and certain non-recurring items
on income and net earnings per share as a supplement to its
consolidated financial statements, which are presented in
accordance with generally accepted accounting principles in the
U.S., or GAAP.
Management is providing the adjusted net income and adjusted net
earnings per share information for the periods presented because it
believes this enhances the comparison of the Company’s financial
performance from period-to-period, and to that of its competitors.
This press release is not meant to be considered in isolation, or
as a substitute for results prepared in accordance with GAAP. A
reconciliation of the non-GAAP financial measures to the comparable
GAAP measures is included in this press release as part of the
attached financial tables.
Conference Call Information
Quidel management will host a conference call to discuss the
first quarter 2018 results as well as other business matters today
beginning at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time).
During the conference call, management may answer questions
concerning business and financial developments and trends. Quidel’s
responses to these questions, as well as other matters discussed
during the conference call, may contain or constitute material
information that has not been previously disclosed.
To participate in the live call by telephone from the U.S., dial
877-930-5791, or from outside the U.S. dial 253-336-7286, and enter
the audience pass code 347-4405.
A live webcast of the call can be accessed on the Investor
Relations section of the Quidel website (http://ir.quidel.com). The website replay will be
available for 14 days. The telephone replay will be available for
48 hours beginning at 8:00 p.m. Eastern Time (5:00 p.m. Pacific
Time) today by dialing 855-859-2056 from the U.S., or by dialing
404-537-3406 for international callers, and entering pass code
347-4405.
About Quidel Corporation
Quidel Corporation serves to enhance the health and
well-being of people around the globe through the development of
diagnostic solutions that can lead to improved patient outcomes and
provide economic benefits to the healthcare system. Marketed under
the Sofia®, QuickVue®, D3® Direct Detection, Thyretain®, Triage®
and InflammaDry® leading brand names, as well as under the new
Solana®, AmpliVue® and Lyra® molecular diagnostic brands, Quidel’s
products aid in the detection and diagnosis of many critical
diseases and conditions, including, among others, influenza,
respiratory syncytial virus, Strep A, herpes, pregnancy, thyroid
disease and fecal occult blood. Quidel's recently
acquired Triage® system of tests comprises a comprehensive test
menu that provides rapid, cost-effective treatment decisions at the
point-of-care (POC), offering a diverse immunoassay menu in a
variety of tests to provide healthcare providers with diagnostic
answers for quantitative BNP, CK-MB, d-dimer, myoglobin, troponin I
and qualitative TOX Drug Screen. Quidel’s research and development
engine is also developing a continuum of diagnostic solutions from
advanced immunoassay to molecular diagnostic tests to further
improve the quality of healthcare in physicians’ offices, hospital
and reference laboratories, and other alternate sites, like urgent
care centers and retail clinics, where healthcare is provided. For
more information about Quidel’s comprehensive product portfolio,
visit quidel.com.
This press release contains forward-looking statements within
the meaning of the federal securities laws that involve material
risks, assumptions and uncertainties. Many possible events or
factors could affect our future financial results and performance,
such that our actual results and performance may differ materially
from those that may be described or implied in the forward-looking
statements. As such, no forward-looking statement can be
guaranteed. Differences in actual results and performance may arise
as a result of a number of factors including, without limitation,
our reliance on sales of our influenza diagnostic tests;
fluctuations in our operating results resulting from the timing of
the onset, length and severity of cold and flu seasons,
seasonality, government and media attention focused on influenza
and the related potential impact on humans from novel influenza
viruses, adverse changes in competitive conditions in domestic and
international markets, the reimbursement system currently in place
and future changes to that system, changes in economic conditions
in our domestic and international markets, lower than anticipated
market penetration of our products, the quantity of our product in
our distributors’ inventory or distribution channels, changes in
the buying patterns of our distributors, and changes in the
healthcare market and consolidation of our customer base; our
development and protection of proprietary technology rights; our
development of new technologies, products and markets; our reliance
on a limited number of key distributors; intellectual property
risks, including but not limited to, infringement litigation; our
need for additional funds to finance our capital or operating
needs; the financial soundness of our customers and suppliers;
acceptance of our products among physicians and other healthcare
providers; competition with other providers of diagnostic products;
adverse actions or delays in new product reviews or related to
currently-marketed products by the U.S. Food and Drug
Administration (the “FDA”) or other regulatory authorities or loss
of any previously received regulatory approvals or clearances;
changes in government policies; our exposure to claims and
litigation, including litigation currently pending against us;
costs of or our failure to comply with government regulations in
addition to FDA regulations; compliance with government regulations
relating to the handling, storage and disposal of hazardous
substances; third-party reimbursement policies; our failure to
comply with laws and regulations relating to billing and payment
for healthcare services; our ability to meet demand for our
products; interruptions in our supply of raw materials; product
defects; business risks not covered by insurance; our exposure to
cyber-based attacks and security breaches; competition for and loss
of management and key personnel; international risks, including but
not limited to, compliance with product registration requirements,
exposure to currency exchange fluctuations and foreign currency
exchange risk sharing arrangements, longer payment cycles, lower
selling prices and greater difficulty in collecting accounts
receivable, reduced protection of intellectual property rights,
political and economic instability, taxes, and diversion of lower
priced international products into U.S. markets; changes in tax
rates and exposure to additional tax liabilities or assessments;
risks relating to the acquisition and integration of the Triage and
BNP Businesses; Alere’s failure to perform under various transition
agreements relating to our acquisition of the Triage and BNP
Businesses; that we may incur substantial costs to build our
information technology infrastructure to transition the Triage and
BNP Businesses; that we may have to write off goodwill relating to
our acquisition of the Triage and BNP Businesses; that we our
ability to manage our growth strategy; the level of our
indebtedness; the amount of, and our ability to repay, renew or
extend, our outstanding debt and its impact on our operations and
our ability to obtain financing; that substantially the Senior
Credit Facility is secured by substantially all of our assets; our
prepayment requirements under the Senior Credit Facility; the
agreements for our indebtedness place operating and financial
restrictions on the Company; that an event of default could trigger
acceleration of our outstanding indebtedness; our inability to
settle conversions of our Convertible Senior Notes in cash; the
effect on our operating results from the trigger of the conditional
conversion feature of our Convertible Senior Notes; that we may
incur additional indebtedness; increases in interest rate relating
to our variable rate debt; dilution resulting from future sales of
our equity; volatility in our stock price; provisions in our
charter documents, Delaware law and the indenture governing our
Convertible Senior Notes that might delay or impede stockholder
actions with respect to business combinations or similar
transactions; and our intention of not paying dividends.
Forward-looking statements typically are identified by the use of
terms such as “may,” “will,” “should,” “might,” “expect,”
“anticipate,” “estimate,” “plan,” “intend,” “goal,” “project,”
“strategy,” “future,” and similar words, although some
forward-looking statements are expressed differently. The risks
described in reports and registration statements that we file with
the Securities and Exchange Commission (the “SEC”) from
time to time, should be carefully considered. You are cautioned not
to place undue reliance on these forward-looking statements, which
reflect management’s analysis only as of the date of this press
release. Except as required by law, we undertake no obligation to
publicly release the results of any revision or update of these
forward-looking statements, whether as a result of new information,
future events or otherwise.
QUIDEL CORPORATION (In thousands, except per share data;
unaudited) Three Months Ended March 31,
Consolidated Statements of Operations: 2018
2017 Total revenues $ 169,143 $ 73,692 Cost of sales 62,872
25,193 Gross profit 106,271 48,499
Research and development 12,621 7,875 Sales and marketing 28,558
14,223 General and administrative 10,532 7,120 Acquisition and
integration costs 3,467 52 Total costs and expenses
55,178 29,270 Operating income 51,093 19,229 Other
expense, net: Interest expense, net (7,850 ) (2,825 ) Loss on
extinguishment of debt (4,567 ) — Total other expense, net
(12,417 ) (2,825 ) Income before income taxes 38,676 16,404
Provision for income taxes 4,718 2,114 Net income $
33,958 $ 14,290 Basic earnings per share $
0.96 $ 0.43 Diluted earnings per share $ 0.86 $ 0.42 Shares used in
basic per share calculation 35,236 33,202 Shares used in diluted
per share calculation 41,948 33,998 Gross profit as a % of
total revenues 63 % 66 % Research and development as a % of total
revenues 7 % 11 % Sales and marketing as a % of total revenues 17 %
19 % General and administrative as a % of total revenues 6 % 10 %
Consolidated net revenues by product category are as
follows: Rapid Immunoassay $ 80,685 $ 57,533 Cardiac
Immunoassay 68,444 — Specialized Diagnostic Solutions 14,871 13,048
Molecular Diagnostic Solutions 5,143 3,111 Total
revenues $ 169,143 $ 73,692
Condensed
balance sheet data: 3/31/2018 12/31/2017 Cash and
cash equivalents $ 101,812 $ 36,086 Accounts receivable, net 92,254
67,046 Inventories 57,961 67,078 Total assets 865,643 935,251
Short-term debt 94,708 20,184 Long-term debt 135,977 381,110
Stockholders’ equity 330,646 227,104
QUIDEL CORPORATION
Reconciliation of Non-GAAP Financial Information (In
thousands, except per share data; unaudited) Three
months ended March 31, 2018 2017
(unaudited) Net income - GAAP $ 33,958 $ 14,290 Interest expense on
Convertible Senior Notes, net of tax 2,144 — Net
income used for diluted earnings per share, if-converted method
36,102 14,290 Add: Non-cash stock compensation
expense 2,936 1,921 Amortization of intangibles 7,861 2,370
Amortization of debt discount and issuance costs 331 1,366 Non-cash
interest expense for deferred consideration 2,793 — Loss on
extinguishment of Convertible Senior Notes 1,538 — Loss on
extinguishment of Term Loan 3,029 — Amortization of inventory
step-up of fair value 3,650 — Acquisition and integration costs
3,467 52 Income tax impact of adjustments (4,865 ) (2,000 ) Income
tax impact of valuation allowance for deferred tax assets (2,543 )
(2,685 ) Adjusted net income for diluted earnings per share,
if-converted method $ 54,299 $ 15,314 Diluted
earnings per share: Net income - GAAP $ 0.86 $ 0.42 Adjusted net
earnings $ 1.29 $ 0.45
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version on businesswire.com: https://www.businesswire.com/news/home/20180508006591/en/
Quidel Contact:Quidel CorporationRandy StewardChief Financial
Officer858.552.7931orMedia and Investors Contact:Quidel
CorporationRuben Argueta858.646.8023rargueta@quidel.com
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