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, 2020.
First Quarter 2020 Highlights
- Total revenue increased 18% to $174.7 million, from $148.0
million in the first quarter of 2019.
- Cardiometabolic Immunoassay revenue decreased 18% to $53.9
million, and decreased 17% on a constant currency basis.
- Molecular Diagnostic Solutions revenue grew 45% from the first
quarter of 2019 to $8.4 million.
- Influenza revenue increased 69% to $79.6 million, compared with
$47.2 million in the first quarter of 2019.
- Reported GAAP EPS of $0.93 per diluted share in the first
quarter of 2020, compared with $0.60 per diluted share in the first
quarter of 2019.
- Reported non-GAAP EPS of $1.22 per diluted share in the first
quarter of 2020, compared with $0.91 per diluted share in the first
quarter of 2019.
- Received Emergency Use Authorization (EUA) from the U.S. Food
and Drug Administration for Lyra® SARS-CoV-2 Assay.
First Quarter 2020 Results
Total revenue for the first quarter of 2020 was $174.7 million,
versus $148.0 million for the first quarter of 2019. The 18%
increase in sales from the first quarter of 2019 was primarily
driven by growth in the Rapid Immunoassay business, and to a lesser
extent, by growth in Molecular Diagnostic and Specialized
Diagnostic Solutions. This growth was partially offset by a decline
in Cardiometabolic Immunoassay. Currency exchange had an
unfavorable impact of $0.5 million.
Rapid Immunoassay product revenue, which includes QuickVue,
Sofia and Eye Health products, increased 54% in the first quarter
of 2020 to $95.9 million, primarily due to a $30.3 million increase
in Influenza revenue from the first quarter of 2019. Sofia
Influenza revenue increased 58% from the first quarter of 2019 to
$55.9 million, while QuickVue Influenza revenue increased 119% from
the first quarter of 2019 to $17.9 million. Cardiometabolic
Immunoassay revenue, which includes revenue from the Triage and
Beckman BNP products, totaled $53.9 million in the first quarter of
2020, a decline of 18% from the first quarter of 2019, due to
reduced hospital visits by chest pain patients stemming from the
SARS-CoV-2 pandemic. Molecular Diagnostic Solutions revenue
increased 45% to $8.4 million, led by 41% revenue growth from
Solana, our instrumented molecular diagnostic system, and solid
growth in Lyra, mostly due to Lyra® SARS-CoV-2 assay revenue of
$1.0 million. Specialized Diagnostic Solutions revenue, which
includes revenue from Virology/DHI, Specialty and Other, increased
19% from the first quarter of 2019 to $16.5 million, also driven by
strong demand for respiratory products.
“We had a strong start to the year, both in terms of financial
performance, as well as with product development efforts. Influenza
testing revenue, which reached record highs in January and
February, continued at a high level throughout the end of the
quarter,” said Douglas Bryant, president and CEO of Quidel
Corporation. “In the midst of an unusually strong respiratory
season that required our operations teams to scale up
manufacturing, our R&D organization pivoted quickly to develop
a RT-PCR assay for SARS-CoV-2, and both antigen and serology assays
for our Sofia analyzers. The first assay has received Emergency Use
Authorization from the FDA, and the others are not far behind.”
Gross Profit in the first quarter of 2020 increased to $115.0
million, driven by higher sales volumes, favorable product mix,
higher manufacturing overhead absorption and improved geographic
mix. This was partially offset by increased incentives to our
distribution channel partners associated with higher sales volumes
in the quarter. Gross margin increased to 66% as compared to 61% in
the same period in the prior year due to higher manufacturing
overhead absorption as well as favorable product and geographic
mix. R&D expense increased by $2.4 million in the first quarter
as compared to the same period last year, due primarily to higher
employee-related costs, increased spending on clinical trials,
Sofia assays and next-generation platform development projects.
Sales and Marketing expense increased by $1.1 million in the
quarter, due primarily to higher employee-related costs driven by
increased revenue during the current quarter. G&A expense
increased by $0.9 million in the quarter, primarily due to higher
employee related costs driven by improved financial performance
during the current quarter. Acquisition and integration costs of
$1.9 million for the three months ended March 31, 2020 primarily
related to the evaluation of new business development
opportunities, while acquisition and integration costs of $2.8
million for the three months ended March 31, 2019 consisted
primarily of global operation integration costs.
In the first quarter of 2020, the Company recorded an income tax
expense of $8.6 million, as compared with $1.7 million in the same
quarter last year. The higher tax expense for the three months
ended March 31, 2020 is a result of higher pre-tax profits as well
as lower discrete tax benefits recorded in 2020 for excess tax
benefits of stock-based compensation.
Net income for the first quarter was $40.2 million, or $0.93 per
diluted share, as compared to a net income of $24.8 million, or
$0.60 per diluted share, for the first quarter of 2019. On a
non-GAAP basis, net income for the first quarter of 2020 was $52.7
million, or $1.22 per diluted share, as compared to net income of
$38.9 million, or $0.91 per diluted share, for the same period in
2019.
Mr. Bryant continued, “What we do matters, and it is truly
inspiring to see the level of dedication, perseverance, and
teamwork that I get to witness every day. Our strong company
culture positions us to grow, create value, and meet the challenges
ahead to support the well-being of our communities through this
difficult time.”
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, foreign exchange losses and
certain non-recurring items on net income and 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 gross profit, adjusted
operating income, adjusted net income, adjusted net earnings per
share, constant currency revenue and currency revenue growth
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. Constant currency
revenue is calculated by translating current period revenues using
prior period exchange rates, net of any hedging effect recognized
in the current period. Constant currency revenue growth (expressed
as a percentage) is calculated by determining the change in current
period constant currency revenues over prior period revenues. 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 2020 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.
Investors may either join the live call by telephone, or join
via webcast:
- To participate in the live call by telephone from the U.S.,
please dial 833-968-2118, or from outside the U.S. dial
778-560-2849, and request either the “Quidel Q1 2020 Earnings Call”
when prompted by the conference call operator, or dial conference
ID 627-6803.
- To join the live webcast, the call can be accessed through the
following link:
https://services.choruscall.com/links/qdel200506.html, or via the
Investor Relations section of the Quidel website
(http://ir.quidel.com).
The website replay will be available for 1 year. The telephone
replay will be available for 14 days beginning at 8:00 p.m. Eastern
Time (5:00 p.m. Pacific Time) on May 6th, 2020 by dialing
800-585-8367 from the U.S., or by dialing 416-621-4642 for
international callers, and entering pass code 627-6803.
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 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 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 and
hospital and reference laboratories. For more information about
Quidel’s comprehensive product portfolio, visit quidel.com.
Forward-looking Statements
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,
the impact of the novel virus (COVID-19) global pandemic;
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 other respiratory or novel viruses and the related potential
impact on humans from such viruses, adverse changes in competitive
conditions, 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 sales of our
influenza diagnostic tests; our reliance on a limited number of key
distributors; our exposure to claims and litigation, including the
ongoing litigation between the Company and Beckman Coulter, Inc.;
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; 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; failures in our
information technology or storage systems; 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 multiple product registration
requirements, compliance with U.S. and foreign import/export laws,
tariffs, 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, increased financial accounting
and reporting burdens. taxes, and diversion of lower priced
international products into U.S. markets; changes in tax rates and
exposure to additional tax liabilities or assessments; our ability
to manage our growth strategy and identify and integrate acquired
companies or technologies; risks relating to the acquisition and
integration of the Triage and BNP Businesses; that we may have to
write off goodwill relating to our acquisitions; the level of our
indebtedness and deferred payment obligations; our ability to
generate sufficient cash flow to meet our debt service and deferred
payment obligations; that we may incur additional indebtedness;
that the Senior Credit Facility is secured by substantially all of
our assets; 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;
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:
2020
2019
Total revenues
$
174,653
$
147,968
Cost of sales
59,662
57,041
Gross profit
114,991
90,927
Research and development
16,379
13,930
Sales and marketing
30,738
29,589
General and administrative
14,332
13,431
Acquisition and integration costs
1,914
2,824
Total operating expenses
63,363
59,774
Operating income
51,628
31,153
Interest and other expense, net
2,807
4,582
Income before income taxes
48,821
26,571
Provision for income taxes
8,584
1,727
Net income
$
40,237
$
24,844
Basic earnings per share
$
0.96
$
0.63
Diluted earnings per share
$
0.93
$
0.60
Shares used in basic per share
calculation
42,056
39,704
Shares used in diluted per share
calculation
43,403
42,907
Gross profit as a % of total revenues
66
%
61
%
Research and development as a % of total
revenues
9
%
9
%
Sales and marketing as a % of total
revenues
18
%
20
%
General and administrative as a % of total
revenues
8
%
9
%
Consolidated net revenues by product
category are as follows:
Rapid Immunoassay
$
95,930
$
62,494
Cardiometabolic Immunoassay
53,901
65,872
Specialized Diagnostic Solutions
16,459
13,854
Molecular Diagnostic Solutions
8,363
5,748
Total revenues
$
174,653
$
147,968
Condensed balance sheet data:
3/31/2020
12/31/2019
Cash and cash equivalents
$
108,770
$
52,775
Accounts receivable, net
$
102,146
$
94,496
Inventories
$
58,708
$
58,086
Total assets
$
966,766
$
910,867
Short-term debt
$
13,267
$
13,135
Long-term debt
$
4,246
$
4,375
Stockholders’ equity
$
605,199
$
559,820
QUIDEL CORPORATION
Reconciliation of Non-GAAP
Financial Information
(In thousands, except per share
data; unaudited)
Three months ended March
31,
Gross Profit
Operating Income
Net Income
Diluted EPS
2020
2019
2020
2019
2020
2019
2020
2019
GAAP Financial Results
$
114,991
$
90,927
$
51,628
$
31,153
$
40,237
$
24,844
Interest expense on Convertible Senior
Notes, net of tax
181
791
Net income used for diluted earnings per
share, if-converted method
40,418
25,635
$
0.93
$
0.60
Adjustments:
Non-cash stock compensation expense
258
280
3,878
3,588
3,878
3,588
Amortization of intangibles
1,958
1,925
7,062
6,981
7,062
6,981
Amortization of debt issuance costs on
credit facility
101
101
Non-cash interest expense for deferred
consideration
1,895
2,343
Acquisition and integration costs
1,914
2,824
1,914
2,824
Foreign exchange loss
360
499
Income tax impact of adjustments (a)
(2,890
)
(3,104
)
Adjusted
$
117,207
$
93,132
$
64,482
$
44,546
$
52,738
$
38,867
$
1.22
$
0.91
(a)
Income tax impact of adjustments
represents the tax impact related to the non-GAAP adjustments
listed above and reflects an effective tax rate of 19% for 2020 and
2019.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200506005887/en/
Quidel Contact: Quidel Corporation Randy Steward Chief Financial
Officer 858.552.7931
Media and Investors Contact: Quidel Corporation Ruben Argueta
858.646.8023 rargueta@quidel.com
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