Highlights
- Revenue of $783.8 million increased by 54% as reported
- Supplemental combined revenue of $783.8 million decreased by
21.8% in constant currency and increased 3.0%, excluding COVID-19
revenue; the transition of Beckman BNP assay sales to Beckman was a
3 percentage point headwind to revenue so the underlying base
business increased 6.0%
- Growth in revenue, excluding COVID-19 revenue, was driven by
Point-of-Care and Donor Screening product lines
- Strength in North America, LATAM, and ASPAC was partially
offset by weakness in China and EMEA
- GAAP EPS of $0.28; Supplemental combined adjusted EPS of $1.85,
a (54)% decrease from prior year, largely reflecting the strength
of high margin COVID-19 revenue in the third quarter of 2021
QuidelOrtho Corporation (Nasdaq: QDEL) (the “Company” or
“QuidelOrtho”), a global provider of innovative in vitro
diagnostics technologies designed for point-of-care settings,
clinical labs and transfusion medicine, today announced financial
results for the third quarter ended October 2, 2022.
The Company reported total revenue for the third quarter of 2022
of $783.8 million, a 54% increase as reported, compared to $509.8
million for the third 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 third quarter of 2022 decreased to
$0.28, compared to $5.08 for the third quarter of 2021. GAAP
operating income for the third quarter of 2022 was $56.8 million,
compared to $281.8 million for the third quarter of 2021, and GAAP
operating margin was 7% and 55% for the third quarters of 2022 and
2021, respectively. The third 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 third 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:
Third quarter 2022 total revenue of $783.8 million decreased by
21.8% in constant currency, compared to $1,032.3 million for the
third quarter of 2021. Foreign currency translation negatively
impacted sales growth by approximately 230 basis points for the
third quarter of 2022. Adjusted diluted EPS for the third quarter
of 2022 decreased to $1.85, compared to $4.01 for the third quarter
of 2021. Adjusted EBITDA for the third quarter of 2022 was $226.8
million, compared to $435.2 million in the third quarter of 2021.
Adjusted EBITDA margin for the third quarter of 2022 was 28.9%,
compared to 42.5% for the third quarter of 2021.
“Our third quarter results reflect the remarkable cohesion,
agility and dedication of our unified QuidelOrtho team, aided by
the strength of our comprehensive product portfolio and expanded
global commercial footprint,” said Douglas Bryant, Chairman and
Chief Executive Officer of QuidelOrtho. “We are pleased with the
operating leverage we generated, and the better-than-expected
earnings results position us to raise our guidance for the full
year.”
“Integration of our QuidelOrtho business is going well,
surpassing our initial expectations, and will continue to be a key
focus for us in the coming quarters. The progress we’ve made thus
far is a testament to the underlying strength of our combined
business, our exceptional team and our global market strategy. We
look forward to advancing all our initiatives to drive sustainable
growth and create long-term stockholder value,” Mr. Bryant
concluded.
Fiscal Year 2022 Financial Guidance
The Company will provide updated 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 third quarter
ended October 2, 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 968016.
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,
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.
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, integration 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
Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission (the “Commission”) on August 5, 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. 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. 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” 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 growth,” “adjusted net
income,” “adjusted diluted EPS,” “adjusted EBITDA,” “adjusted
EBITDA margin,” “supplemental combined revenue,” “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 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
Nine Months Ended
October 2, 2022
October 3, 2021
October 2, 2022 (a)
October 3, 2021
Total revenues
$
783.8
$
509.8
$
2,399.5
$
1,061.7
Cost of sales, excluding amortization of
intangibles
376.3
134.4
912.5
274.6
Selling, marketing and administrative
204.2
63.0
407.4
165.9
Research and development
65.6
23.7
126.2
69.6
Amortization of intangible assets
50.5
6.9
78.6
20.5
Acquisition and integration costs
26.4
—
109.6
1.8
Other operating expenses
4.0
—
8.0
—
Operating income
56.8
281.8
757.2
529.3
Interest expense, net
29.7
1.3
41.0
4.7
Loss on extinguishment of debt
—
—
24.0
—
Other income, net
(4.2
)
(1.0
)
(2.6
)
(0.4
)
Income before provision for income
taxes
31.3
281.5
694.8
525.0
Provision for income taxes
12.1
65.8
176.4
112.1
Net income
$
19.2
$
215.7
$
518.4
$
412.9
Basic earnings per share
$
0.29
$
5.17
$
9.67
$
9.91
Diluted earnings per share
$
0.28
$
5.08
$
9.56
$
9.72
Weighted-average shares outstanding -
basic
66.9
41.7
53.6
41.7
Weighted-average shares outstanding -
diluted
67.5
42.5
54.2
42.5
(a) Includes Ortho results of operations
from May 27, 2022 through October 2, 2022.
QuidelOrtho
Condensed Consolidated Balance
Sheets
(Unaudited)
(In millions)
October 2, 2022
January 2, 2022
Cash and cash equivalents
$
212.2
$
802.8
Marketable securities
51.8
25.7
Accounts receivable, net
416.6
378.0
Inventories
536.2
198.8
Prepaid expenses and other current
assets
228.4
35.0
Property, plant and equipment, net
1,261.6
349.2
Marketable securities
20.3
37.9
Right-of-use assets
163.7
127.6
Goodwill
2,357.7
337.0
Intangible assets, net
3,223.9
98.7
Deferred tax asset
18.7
20.1
Other assets
164.4
19.6
Total assets
$
8,655.5
$
2,430.4
Accounts payable
$
241.8
$
101.5
Accrued payroll and related expenses
115.5
40.4
Income tax payable
67.3
66.9
Current portion of borrowings
207.6
0.3
Other current liabilities
240.5
114.4
Operating lease liabilities
162.5
128.6
Long-term borrowings
2,482.0
0.4
Deferred tax liability
256.4
—
Other liabilities
86.6
48.5
Total liabilities
3,860.2
501.0
Total stockholders’ equity
4,795.3
1,929.4
Total liabilities and stockholders’
equity
$
8,655.5
$
2,430.4
QuidelOrtho
Condensed Consolidated Statements
of Cash Flows
(Unaudited)
(In millions)
Nine Months Ended
October 2, 2022 (a)
October 3, 2021
Cash provided by operating activities
$
715.9
$
484.5
Cash used for investing activities
(1,584.9
)
(223.5
)
Cash provided by (used for) financing
activities
283.7
(172.2
)
Effect of exchange rates changes on
cash
(4.3
)
(0.3
)
(Decrease) increase in cash, cash
equivalents and restricted cash
(589.6
)
88.5
Cash, cash equivalents and restricted cash
at beginning of period
802.8
489.9
Cash, cash equivalents and restricted cash
at end of period
$
213.2
$
578.4
Reconciliation to amounts within the
consolidated balance sheets:
Cash and cash equivalents
$
212.2
$
578.4
Restricted cash in Other assets
1.0
—
Cash, cash equivalents and restricted
cash
$
213.2
$
578.4
(a) Includes Ortho activities from May 27,
2022 through October 2, 2022.
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted Net Income
(In millions, except per share
data; unaudited)
Three Months Ended
Nine Months Ended
October 2, 2022
Diluted EPS
October 3, 2021
Diluted EPS
October 2, 2022 (a)
Diluted EPS
October 3, 2021
Diluted EPS
Net income
$
19.2
$
0.28
$
215.7
$
5.08
$
518.4
$
9.56
$
412.9
$
9.72
Adjustments:
Amortization of intangibles
50.5
6.9
78.6
20.5
Acquisition and integration costs
26.4
—
109.6
1.8
Loss on extinguishment of debt
—
—
24.0
—
Unwind inventory fair value adjustment
35.4
—
46.6
—
Incremental depreciation on PP&E fair
value adjustment
1.3
—
1.3
—
Noncash interest expense for deferred
consideration
0.6
1.0
2.3
3.6
Amortization of deferred cloud computing
implementation costs
1.6
1.0
3.9
2.9
Derivative mark-to-market gain
(3.4
)
—
(4.4
)
—
Loss (gain) on investments
—
(1.2
)
0.8
(1.2
)
Employee compensation charges and other
costs
1.3
—
1.8
—
EU medical device regulation transition
costs
0.6
—
1.0
—
Change in fair value of acquisition
contingencies
—
—
0.1
0.1
Income tax impact of adjustments
(9.0
)
(1.6
)
(46.5
)
(5.9
)
Discrete tax items
0.6
—
0.6
—
Adjusted net income
$
125.1
$
1.85
$
221.8
$
5.22
$
738.1
$
13.62
$
434.7
$
10.23
Ortho pre-combination adjusted net
income
—
51.2
77.2
145.5
Supplemental combined adjusted net
income
$
125.1
$
1.85
$
273.0
$
4.01
$
815.3
$
11.99
$
580.2
$
8.53
(a) Adjusted net income includes Ortho
activities from May 27, 2022 through October 2, 2022.
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted EBITDA
(In millions, unaudited)
Three Months Ended
Nine Months Ended
October 2, 2022
October 3, 2021
October 2, 2022 (a)
October 3, 2021
Net income
$
19.2
$
215.7
$
518.4
$
412.9
Depreciation and amortization
104.2
12.7
167.0
37.3
Interest expense, net
29.7
1.3
41.0
4.7
Provision for income taxes
12.1
65.8
176.4
112.1
Loss on extinguishment of debt
—
—
24.0
—
Employee compensation charges and other
costs
1.3
—
1.8
—
Acquisition and integration costs
26.4
—
109.6
1.8
Unwind inventory fair value adjustment
35.4
—
46.6
—
Derivative mark-to-market gain
(3.4
)
—
(4.4
)
—
EU medical device regulation transition
costs
0.6
—
1.0
—
Loss (gain) on investments
—
(1.2
)
0.8
(1.2
)
Amortization of deferred cloud computing
implementation costs
1.6
1.0
3.9
2.9
Tax indemnification income
(0.3
)
—
(0.3
)
—
Change in fair value of acquisition
contingencies
—
—
0.1
0.1
Adjusted EBITDA
$
226.8
$
295.3
$
1,085.9
$
570.6
Ortho pre-combination Adjusted EBITDA
—
139.9
212.5
420.5
Supplemental combined Adjusted EBITDA
$
226.8
$
435.2
$
1,298.4
$
991.1
(a) Adjusted EBITDA includes Ortho
activities from May 27, 2022 through October 2, 2022.
QuidelOrtho
Supplemental Combined Revenues by
Business Unit and Region
(In millions, unaudited)
Three Months Ended
October 2, 2022
October 3, 2021
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
Labs
$
334.8
$
363.3
(7.8
) %
(3.3
) %
(4.5
) %
1.8
%
(2.7
) %
Transfusion Medicine
163.1
170.7
(4.5
) %
(5.7
) %
1.2
%
—
%
1.2
%
Point-of-Care
270.5
443.5
(39.0
) %
(0.5
) %
(38.5
) %
67.0
%
28.5
%
Molecular Diagnostics
15.4
54.8
(71.9
) %
(0.3
) %
(71.6
) %
71.0
%
(0.6
) %
Total supplemental combined revenues
$
783.8
$
1,032.3
(24.1
) %
(2.3
) %
(21.8
) %
24.8
%
3.0
%
Three Months Ended
October 2, 2022
October 3, 2021
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
North America
$
517.6
$
730.3
(29.1
) %
—
%
(29.1
) %
34.8
%
5.7
%
EMEA
73.7
81.9
(10.0
) %
(10.7
) %
0.7
%
1.3
%
2.0
%
China
80.8
97.8
(17.4
) %
(4.9
) %
(12.5
) %
—
%
(12.5
) %
Other
111.7
122.3
(8.7
) %
(8.7
) %
—
%
9.4
%
9.4
%
Total supplemental combined revenues
$
783.8
$
1,032.3
(24.1
) %
(2.3
) %
(21.8
) %
24.8
%
3.0
%
Nine Months Ended
October 2, 2022
October 3, 2021
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
Labs
$
1,016.5
$
1,060.0
(4.1
) %
(2.3
) %
(1.8
) %
3.1
%
1.3
%
Transfusion Medicine
505.6
494.5
2.2
%
(4.6
) %
6.8
%
—
%
6.8
%
Point-of-Care
1,580.5
879.5
79.7
%
(0.8
) %
80.5
%
(42.5
) %
38.0
%
Molecular Diagnostics
82.1
149.5
(45.1
) %
(0.2
) %
(44.9
) %
63.2
%
18.3
%
Total supplemental combined revenues
$
3,184.7
$
2,583.5
23.3
%
(2.2
) %
25.5
%
(17.1
) %
8.4
%
Nine Months Ended
October 2, 2022
October 3, 2021
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
North America
$
2,351.1
$
1,702.6
38.1
%
(0.1
) %
38.2
%
(23.7
) %
14.5
%
EMEA
240.6
257.2
(6.5
) %
(8.5
) %
2.0
%
3.0
%
5.0
%
China
240.2
246.0
(2.4
) %
(2.6
) %
0.2
%
(11.2
) %
(11.0
) %
Other
352.8
377.7
(6.6
) %
(6.1
) %
(0.5
) %
7.7
%
7.2
%
Total supplemental combined revenues
$
3,184.7
$
2,583.5
23.3
%
(2.2
) %
25.5
%
(17.1
) %
8.4
%
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/20221102006052/en/
Investor Contact: Bryan Brokmeier, CFA IR@Quidel.com Media
Contact media@Quidel.com
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