Highlights
- Revenue of $613.4 million increased by 247% as reported;
Supplemental combined revenue of $898.5 million increased by 37.5%
in constant currency and 9.0%, excluding COVID-19 revenue
- Strong growth in all business units, excluding COVID-19
revenue, including double-digit growth in Point-of-Care and
Molecular Diagnostics, and high-single-digit combined growth in
Labs and Transfusion Medicine
- Strength across all major regions, including China, EMEA, and
North America
- GAAP EPS of $0.36; Supplemental combined adjusted EPS of $2.12,
a 123% increase from prior year, largely reflecting the strength of
high margin COVID-19 revenue
QuidelOrtho Corporation (Nasdaq: QDEL) (the “Company” or
“QuidelOrtho”), a leading in vitro diagnostics company, today
announced financial results for the second quarter ended July 3,
2022.
The Company reported total revenue for the second quarter of
2022 of $613.4 million, a 247% increase as reported, compared to
$176.6 million for the second quarter of 2021. This was largely due
to the consummation of the business combination that occurred on
May 27, 2022 pursuant to a Business Combination Agreement entered
into as of December 22, 2021, by and among Quidel Corporation
(“Quidel”), Ortho Clinical Diagnostics Holdings plc (“Ortho”),
QuidelOrtho, and the other parties thereto (the “Combinations”).
GAAP diluted earnings per share (EPS) for the second quarter of
2022 decreased to $0.36, compared to $0.45 for the second quarter
of 2021. GAAP operating income for the second quarter of 2022 was
$79.7 million, compared to $23.3 million for the second quarter of
2021, and GAAP operating margin was 13% for each of the second
quarters of 2022 and 2021. The second quarter 2022 results include
significant one-time charges related to the Combinations.
In addition to the Company’s GAAP results, the Company is
providing supplemental combined second quarter 2022 and 2021
revenues and adjusted operating results as if Quidel and Ortho had
been combined for the applicable periods. The following discussion
of financial results is based on supplemental combined
information:
Second quarter 2022 total revenue of $898.5 million increased by
37.5% in constant currency, compared to $669.1 million for the
second quarter of 2021. Foreign currency translation negatively
impacted sales growth by approximately 320 basis points for the
second quarter of 2022. Adjusted diluted EPS for the second quarter
of 2022 increased to $2.12, compared to $0.95 for the second
quarter of 2021. Adjusted EBITDA for the second quarter of 2022 was
$290.8 million, compared to $165.9 million in the second quarter of
2021. Adjusted EBITDA margin for the second quarter of 2022 was
32.4%, compared to 24.8% for the second quarter of 2021.
“I’m incredibly pleased with the way our employees have come
together to deliver a strong start as a combined company. In our
first reported quarter as QuidelOrtho, we delivered strong
financial performance, as we executed on our strategic priorities.
Our Point-of-Care, Labs, Transfusion Medicine, and Molecular
Diagnostics business units all delivered impressive growth,
leveraging the competitive strengths of both Quidel and Ortho,”
said Douglas Bryant, Chairman and Chief Executive Officer of
QuidelOrtho.
“In addition to driving growth, enabling a strong corporate
culture – that creates a successful integration, maintains
commercial and operational excellence, and inspires innovation –
remains one of our top priorities,” Mr. Bryant added. “With regard
to integration, we’ve already generated considerable momentum and
have a clear path forward to reaching our targeted cost and revenue
synergies, and positioning the combined business for long-term
growth and enhanced shareholder value,” Mr. Bryant concluded.
Fiscal Year 2022 Financial Guidance
The Company will provide 2022 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 second
quarter ended July 3, 2022. 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 844-200-6205 (domestic) or 929-526-1599 (international) and
entering Conference ID number 525922.
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.
Our 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, the
QuidelOrtho family 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.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. You can identify these statements and other forward-looking
statements in this press release by words such as “may,” “will,”
“would,” “expect,” “anticipate,” “believe,” “estimate,” “plan,”
“intend,” “continue,” or similar words, expressions or the negative
of such terms or other comparable terminology. These statements
include, but are not limited to, the benefits and results of the
Combinations and integration of the businesses of Quidel and Ortho,
including QuidelOrtho’s execution of cost and revenue synergies,
commercial and other strategic goals, future financial and
operating results, future plans, objectives, strategies,
expectations and intentions and other statements that are not
historical facts. Such statements are based on the current beliefs
and expectations of QuidelOrtho’s management and are subject to
significant risks and uncertainties. Actual results may differ
significantly from those set forth in the forward-looking
statements. The following factors, among others, could cause actual
results to differ from those set forth 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
joint proxy statement/prospectus (the “Joint Proxy
Statement/Prospectus”) filed with the Securities and Exchange
Commission (the “Commission”) on April 11, 2022 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 has no obligation
to update any of the forward-looking information included in this
press release, whether as a result of new information, future
events, changed expectations or otherwise, except as required by
law.
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. The 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”). This
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” of the Joint Proxy Statement/Prospectus 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 growth,” “adjusted
diluted EPS,” “adjusted EBITDA,” “supplemental combined revenue,”
“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 GAAP. “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
revenue,” “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
Six Months Ended
July 3, 2022 (a)
July 4, 2021
July 3, 2022 (a)
July 4, 2021
Total revenues
$
613.4
$
176.6
$
1,615.7
$
551.9
Cost of sales, excluding amortization of
intangibles
275.9
68.6
536.2
140.2
Selling, marketing and administrative
118.4
54.2
203.2
102.9
Research and development
34.2
22.6
60.6
45.9
Amortization of intangible assets
21.0
6.8
28.1
13.6
Acquisition and integration costs
80.2
1.1
83.2
1.8
Other operating expenses
4.0
—
4.0
—
Operating income
79.7
23.3
700.4
247.5
Interest expense, net
10.3
1.4
11.3
3.4
Loss on extinguishment of debt
24.0
—
24.0
—
Other expense, net
2.5
0.2
1.6
0.6
Income before provision for
income taxes
42.9
21.7
663.5
243.5
Provision for income taxes
23.6
2.6
164.3
46.3
Net income
$
19.3
$
19.1
$
499.2
$
197.2
Basic earnings per share
$
0.37
$
0.46
$
10.62
$
4.74
Diluted earnings per share
$
0.36
$
0.45
$
10.47
$
4.64
Weighted average shares outstanding -
basic
52.2
41.7
47.0
41.6
Weighted average shares outstanding -
diluted
52.9
42.4
47.7
42.5
(a)
Includes Ortho results of operations from
May 27, 2022 through July 3, 2022.
QuidelOrtho Condensed
Consolidated Balance Sheets (Unaudited) (In millions)
July 3, 2022 (a)
January 2, 2022
Cash and cash equivalents
$
379.0
$
802.8
Marketable securities
52.5
25.7
Accounts receivable, net
379.2
378.0
Inventories
552.7
198.8
Prepaid expenses and other current
assets
195.7
35.0
Property, plant and equipment, net
1,110.1
349.2
Marketable securities
15.2
37.9
Right-of-use assets
168.9
127.6
Goodwill
2,589.6
337.0
Intangible assets, net
3,194.9
98.7
Deferred tax asset
32.5
20.1
Other assets
152.1
19.6
Total assets
$
8,822.4
$
2,430.4
Accounts payable
$
247.3
$
101.5
Accrued payroll and related expenses
116.9
40.4
Income tax payable
69.1
66.9
Current portion of borrowings
207.8
0.3
Other current liabilities
258.9
114.4
Operating lease liabilities
168.2
128.6
Long-term borrowings
2,533.3
0.4
Deferred tax liability
214.0
—
Other liabilities
87.3
48.5
Total liabilities
3,902.8
501.0
Total stockholders’ equity
4,919.6
1,929.4
Total liabilities and
stockholders’ equity
$
8,822.4
$
2,430.4
(a)
Includes Ortho balances as of July 3,
2022.
QuidelOrtho Condensed
Consolidated Statements of Cash Flows (Unaudited) (In millions)
Six Months Ended
July 3, 2022 (a)
July 4, 2021
Cash provided by operating activities
$
725.6
$
407.5
Cash used for investing activities
(1,555.1
)
(130.3
)
Cash provided by (used for) financing
activities
409.7
(174.0
)
Effect of exchange rates changes on
cash
(2.4
)
0.1
(Decrease) increase in cash, cash
equivalents and restricted cash
(422.2
)
103.3
Cash, cash equivalents and restricted cash
at beginning of period
802.8
489.9
Cash, cash equivalents and restricted cash
at end of period
$
380.6
$
593.2
Reconciliation to amounts within the
consolidated balance sheets:
Cash and cash equivalents
$
379.0
$
593.2
Restricted cash in Other assets
1.6
—
Cash, cash equivalents and restricted
cash
$
380.6
$
593.2
(a)
Includes Ortho activities from May 27,
2022 through July 3, 2022.
QuidelOrtho Reconciliation
of Non-GAAP Financial Information (In millions, except per share
data; unaudited)
Three Months Ended
Six Months Ended
July 3, 2022
Diluted EPS
July 4, 2021
Diluted EPS
July 3, 2022
Diluted EPS
July 4, 2021
Diluted EPS
Net income
$
19.3
$
0.36
$
19.1
$
0.45
$
499.2
$
10.47
$
197.2
$
4.64
Adjustments:
Amortization of intangibles
21.0
6.8
28.1
13.6
Acquisition and integration costs
80.2
1.1
83.2
1.8
Loss on extinguishment of debt
24.0
—
24.0
—
Unwind inventory fair value adjustment
11.2
—
11.2
—
Noncash interest expense for deferred
consideration
0.8
1.1
1.7
2.6
Amortization of deferred cloud
computing
implementation costs
1.3
1.2
2.3
1.9
Derivative mark-to-market gain
(1.0
)
—
(1.0
)
—
Loss on investments
0.8
—
0.8
—
Employee compensation charges and other
costs
0.5
—
0.5
—
EU medical device regulation transition
costs
0.4
—
0.4
—
Change in fair value of acquisition
contingencies
0.1
0.1
0.1
0.1
Income tax impact of adjustments
(34.9
)
(3.6
)
(37.5
)
(7.1
)
Adjusted net income
$
123.7
$
2.34
$
25.8
$
0.61
$
613.0
$
12.85
$
210.1
$
4.94
Ortho pre-combination adjusted net
income
20.2
39.1
77.2
94.3
Supplemental combined adjusted net
income
$
143.9
$
2.12
$
64.9
$
0.95
$
690.2
$
10.15
$
304.4
$
4.48
(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 25% for three
and six months ended July 3, 2022 and an effective tax rate of 22%
for three and six months ended July 4, 2021.
QuidelOrtho Reconciliation
of Non-GAAP Financial Information - Adjusted EBITDA (In millions,
unaudited)
Three Months Ended
Six Months Ended
July 3, 2022 (a)
July 4, 2021
July 3, 2022 (a)
July 4, 2021
Net income
$
19.3
$
19.1
$
499.2
$
197.2
Depreciation and amortization
47.5
12.3
62.8
24.6
Interest expense, net
10.3
1.4
11.3
3.4
Provision for income taxes
23.6
2.6
164.3
46.3
Loss on extinguishment of debt
24.0
—
24.0
—
Employee compensation charges and other
costs
0.5
—
0.5
—
Acquisition and integration costs
80.2
1.1
83.2
1.8
Unwind inventory fair value adjustment
11.2
—
11.2
—
Derivative mark-to-market gain
(1.0
)
—
(1.0
)
—
EU medical device regulation transition
costs
0.4
—
0.4
—
Loss on investments
0.8
—
0.8
—
Amortization of deferred cloud
computing
implementation costs
1.3
1.2
2.3
1.9
Change in fair value of acquisition
contingencies
0.1
0.1
0.1
0.1
Adjusted EBITDA
$
218.2
$
37.8
$
859.1
$
275.3
Ortho pre-combination Adjusted EBITDA
72.6
128.1
212.5
280.6
Supplemental combined Adjusted EBITDA
$
290.8
$
165.9
$
1,071.6
$
555.9
(a)
Adjusted EBITDA includes Ortho activities
from May 27, 2022 through July 3, 2022.
QuidelOrtho Supplemental
Combined Revenues by Business Unit and Region (In millions,
unaudited)
Three Months Ended
July 3, 2022
July 4, 2021
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
Labs
$
342.0
$
340.5
0.4
%
(2.7
) %
3.1
%
2.9
%
6.0
%
Transfusion Medicine
168.8
162.4
3.9
%
(5.0
) %
8.9
%
—
%
8.9
%
Point-of-Care
367.0
131.7
178.7
%
(1.8
) %
180.5
%
(161.1
) %
19.4
%
Molecular Diagnostics
20.7
34.5
(40.0
) %
(0.4
) %
(39.6
) %
84.4
%
44.8
%
Total supplemental combined revenues
$
898.5
$
669.1
34.3
%
(3.2
) %
37.5
%
(28.5
) %
9.0
%
Three Months Ended
July 3, 2022
July 4, 2021
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
North America
$
595.7
$
375.3
58.7
%
(0.2
) %
58.9
%
(43.2
) %
15.7
%
EMEA
82.9
85.7
(3.3
) %
(9.0
) %
5.7
%
2.0
%
7.7
%
China
96.1
78.7
22.1
%
(3.2
) %
25.3
%
(34.9
) %
(9.6
) %
Other
123.8
129.4
(4.3
) %
(6.5
) %
2.2
%
2.5
%
4.7
%
Total supplemental combined revenues
$
898.5
$
669.1
34.3
%
(3.2
) %
37.5
%
(28.5
) %
9.0
%
Six Months Ended
July 3, 2022
July 4, 2021
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
Labs
$
681.7
$
696.7
(2.2
) %
(1.7
) %
(0.5
) %
3.9
%
3.4
%
Transfusion Medicine
342.5
323.8
5.8
%
(3.9
) %
9.7
%
—
%
9.7
%
Point-of-Care
1,310.0
436.0
200.5
%
(1.2
) %
201.7
%
(158.6
) %
43.1
%
Molecular Diagnostics
66.7
94.7
(29.6
) %
(0.1
) %
(29.5
) %
60.0
%
30.5
%
Total supplemental combined revenues
$
2,400.9
$
1,551.2
54.8
%
(2.4
) %
57.2
%
(45.9
) %
11.3
%
Six Months Ended
July 3, 2022
July 4, 2021
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
North America
$ 1,833.5
$ 972.3
88.6 %
(0.1) %
88.7 %
(69.6) %
19.1 %
EMEA
166.9
175.3
(4.8) %
(7.4) %
2.6 %
3.8 %
6.4 %
China
159.4
148.2
7.6 %
(1.0) %
8.6 %
(18.6) %
(10.0) %
Other
241.1
255.4
(5.6) %
(4.8) %
(0.8) %
6.8 %
6.0 %
Total supplemental combined revenues
$ 2,400.9
$ 1,551.2
54.8 %
(2.4) %
57.2 %
(45.9) %
11.3 %
Tables above include Ortho revenues as if the acquisition had
occurred on January 4, 2021.
(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
year. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220804005928/en/
Investor Contact: Bryan Brokmeier, CFA IR@Quidel.com
Media Contact media@Quidel.com
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