Highlights
- Fourth quarter revenue of $866.5 million increased by 36% as
reported and 19% on a supplemental combined basis, excluding
COVID-19 revenue
- Full year revenue of $3.27 billion increased by 92% as
reported; Supplemental combined revenue of $4.05 billion increased
by 11%, excluding COVID-19 revenue
- Growth in revenue, excluding COVID-19 revenue, for both the
fourth quarter and full year, was driven by Point of Care and
Molecular Diagnostics, partially offset by weakness in Labs due to
China lockdowns and global supply chain challenges
- Fourth quarter GAAP EPS of $0.45; Supplemental combined
adjusted EPS of $1.76, a 66% decrease from prior year, largely
reflecting the strength of high margin COVID-19 revenue in the
fourth quarter of 2021
- Full year GAAP EPS of $9.56; Supplemental combined adjusted EPS
of $13.80, a 1% increase from prior year
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 fourth quarter ended January 1, 2023.
The Company reported total revenue for the fourth quarter of
2022 of $866.5 million, a 36% increase as reported, compared to
$636.9 million for the fourth 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 fourth quarter of
2022 decreased to $0.45, compared to $6.85 for the fourth quarter
of 2021. GAAP operating income for the fourth quarter of 2022 was
$86.5 million, compared to $376.7 million for the fourth quarter of
2021, and GAAP operating margin was 10% and 59% for the fourth
quarters of 2022 and 2021, respectively. The fourth quarter 2022
results include significant one-time charges related to the
integration.
In addition to the Company’s GAAP results, the Company is
providing supplemental combined fourth 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:
Fourth quarter 2022 total revenue of $866.5 million decreased by
23% in constant currency, compared to $1,157.9 million for the
fourth quarter of 2021. Foreign currency translation negatively
impacted sales growth by approximately 180 basis points for the
fourth quarter of 2022. Adjusted diluted EPS for the fourth quarter
of 2022 decreased to $1.76, compared to $5.12 for the fourth
quarter of 2021. Adjusted EBITDA for the fourth quarter of 2022 was
$245.1 million, compared to $528.5 million in the fourth quarter of
2021. Adjusted EBITDA margin for the fourth quarter of 2022 was
28.3%, compared to 45.6% for the fourth quarter of 2021.
“Led by ex-COVID-19 growth in Point of Care, Molecular
Diagnostics and Transfusion Medicine, we ended a milestone year for
QuidelOrtho with an outstanding performance in the fourth quarter
even as our largest and generally most resilient business unit,
Labs, faced lockdowns in China and continued supply chain
challenges,” said Douglas Bryant, President and Chief Executive
Officer of QuidelOrtho. “The fourth quarter further reflects the
powerful mix of hard work, focus and dedication we’ve seen from our
entire QuidelOrtho team throughout 2022. Time and again, our teams
rose to meet every challenge and successfully leveraged our
commercial and operational strengths to capture robust demand for
our diagnostic tests and instruments.”
“We continue to execute on our integration and are ahead of plan
on our cost synergy targets,” Mr. Bryant added. “With our combined
portfolio, we see tremendous opportunities to cross-sell our
products in new markets. We look forward to bringing together all
these pieces in 2023 to build on our strong foundation and drive
enhanced value for our shareholders,” he 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 fourth
quarter ended January 1, 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 844-200-6205 (domestic) or 929-526-1599 (international) and
entering Conference ID number 649357.
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. You can identify these 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 beliefs and
expectations of QuidelOrtho’s management as of today and are
subject to significant risks and uncertainties. Actual results 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 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 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. 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,” “constant
currency, ex-COVID-19 revenue,” “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
Fiscal Year Ended
January 1, 2023
January 2, 2022
January 1, 2023 (a)
January 2, 2022
Total revenues
$
866.5
$
636.9
$
3,266.0
$
1,698.6
Cost of sales, excluding amortization of
intangibles
417.5
145.7
1,330.0
420.3
Selling, marketing and administrative
213.6
73.7
621.0
239.6
Research and development
64.3
26.1
190.5
95.7
Amortization of intangible assets
53.9
6.9
132.5
27.4
Acquisition and integration costs
26.4
7.8
136.0
9.6
Other operating expenses
4.3
—
12.3
—
Operating income
86.5
376.7
843.7
906.0
Interest expense, net
34.7
1.1
75.7
5.8
Loss on extinguishment of debt
—
—
24.0
—
Other expense (income), net
10.7
0.3
8.1
(0.1
)
Income before provision for income
taxes
41.1
375.3
735.9
900.3
Provision for income taxes
10.8
84.0
187.2
196.1
Net income
$
30.3
$
291.3
$
548.7
$
704.2
Basic earnings per share
$
0.46
$
6.98
$
9.66
$
16.74
Diluted earnings per share
$
0.45
$
6.85
$
9.56
$
16.43
Weighted-average shares outstanding -
basic
66.3
41.8
56.8
42.1
Weighted-average shares outstanding -
diluted
66.9
42.5
57.4
42.9
(a)
Includes Ortho results of operations from May 27, 2022 through
January 1, 2023.
QuidelOrtho
Condensed Consolidated Balance
Sheets
(Unaudited)
(In millions)
January 1, 2023
January 2, 2022
Cash and cash equivalents
$
292.9
$
802.8
Marketable securities
52.1
25.7
Accounts receivable, net
453.9
378.0
Inventories
524.1
198.8
Prepaid expenses and other current
assets
252.1
35.0
Property, plant and equipment, net
1,339.0
349.2
Marketable securities
21.0
37.9
Right-of-use assets
181.0
127.6
Goodwill
2,476.8
337.0
Intangible assets, net
3,123.8
98.7
Deferred tax asset
16.4
20.1
Other assets
122.7
19.6
Total assets
$
8,855.8
$
2,430.4
Accounts payable
$
283.3
$
101.5
Accrued payroll and related expenses
139.2
40.4
Income tax payable
51.6
66.9
Current portion of borrowings
207.5
0.3
Other current liabilities
325.4
114.4
Operating lease liabilities
186.4
128.6
Long-term borrowings
2,430.8
0.4
Deferred tax liability
213.2
—
Other liabilities
83.8
48.5
Total liabilities
3,921.2
501.0
Total stockholders’ equity
4,934.6
1,929.4
Total liabilities and stockholders’
equity
$
8,855.8
$
2,430.4
QuidelOrtho
Condensed Consolidated Statements
of Cash Flows
(Unaudited)
(In millions)
Fiscal Year Ended
January 1, 2023 (a)
January 2, 2022
Cash provided by operating activities
$
885.3
$
805.9
Cash used for investing activities
(1,644.2
)
(319.5
)
Cash provided by (used for) financing
activities
252.0
(173.1
)
Effect of exchange rates changes on
cash
(2.0
)
(0.4
)
(Decrease) increase in cash, cash
equivalents and restricted cash
(508.9
)
312.9
Cash, cash equivalents and restricted cash
at beginning of period
802.8
489.9
Cash, cash equivalents and restricted cash
at end of period
$
293.9
$
802.8
Reconciliation to amounts within the
consolidated balance sheets:
Cash and cash equivalents
$
292.9
$
802.8
Restricted cash in Other assets
1.0
—
Cash, cash equivalents and restricted
cash
$
293.9
$
802.8
(a)
Includes Ortho activities from May 27, 2022 through January 1,
2023.
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted Net Income
(In millions, except per share
data; unaudited)
Three Months Ended
Fiscal Year Ended
January 1, 2023
Diluted EPS
January 2, 2022
Diluted EPS
January 1, 2023 (a)
Diluted EPS
January 2, 2022
Diluted EPS
Net income
$
30.3
$
0.45
$
291.3
$
6.85
$
548.7
$
9.56
$
704.2
$
16.43
Adjustments:
Amortization of intangibles
53.9
6.9
132.5
27.4
Acquisition and integration costs
26.4
7.8
136.0
9.6
Unwind inventory fair value adjustment
14.0
—
60.6
—
Loss on extinguishment of debt
—
—
24.0
—
Incremental depreciation on PP&E fair
value adjustment
9.2
—
10.5
—
Noncash interest expense for deferred
consideration
0.6
1.0
2.9
4.6
Amortization of deferred cloud computing
implementation costs
1.5
0.8
5.4
3.7
Derivative mark-to-market gain
—
—
(4.4
)
—
Loss (gain) on investments
5.0
(0.3
)
5.8
(1.5
)
Employee compensation charges and other
costs
1.9
—
3.7
—
EU medical device regulation transition
costs
0.5
—
1.5
—
Change in fair value of acquisition
contingencies
—
0.1
0.1
0.2
Impairment of long-lived assets
2.8
—
2.8
—
Income tax impact of adjustments
(30.3
)
(3.6
)
(76.8
)
(9.5
)
Discrete tax items
1.8
—
2.4
—
Adjusted net income
$
117.6
$
1.76
$
304.0
$
7.15
$
855.7
$
14.91
$
738.7
$
17.22
Ortho pre-combination adjusted net
income
—
43.2
77.2
188.7
Supplemental combined adjusted net
income
$
117.6
$
1.76
$
347.2
$
5.12
$
932.9
$
13.80
$
927.4
$
13.60
Weighted-average shares outstanding -
diluted
66.9
42.5
57.4
42.9
Weighted-average shares outstanding -
diluted - supplemental combined
66.9
67.8
67.6
68.2
(a)
Adjusted net income includes Ortho activities from May 27, 2022
through January 1, 2023.
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted EBITDA
(In millions, unaudited)
Three Months Ended
Fiscal Year Ended
January 1, 2023
January 2, 2022
January 1, 2023 (a)
January 2, 2022
Net income
$
30.3
$
291.3
$
548.7
$
704.2
Depreciation and amortization
116.6
15.4
283.6
52.7
Interest expense, net
34.7
1.1
75.7
5.8
Provision for income taxes
10.8
84.0
187.2
196.1
Unwind inventory fair value adjustment
14.0
—
60.6
—
Loss on extinguishment of debt
—
—
24.0
—
Employee compensation charges and other
costs
1.9
—
3.7
—
Acquisition and integration costs
26.4
7.8
136.0
9.6
Derivative mark-to-market gain
—
—
(4.4
)
—
EU medical device regulation transition
costs
0.5
—
1.5
—
Loss (gain) on investments
5.0
(0.3
)
5.8
(1.5
)
Amortization of deferred cloud computing
implementation costs
1.5
0.8
5.4
3.7
Tax indemnification expense
0.6
—
0.3
—
Change in fair value of acquisition
contingencies
—
0.1
0.1
0.2
Impairment of long-lived assets
2.8
—
2.8
—
Adjusted EBITDA
$
245.1
$
400.2
$
1,331.0
$
970.8
Ortho pre-combination Adjusted EBITDA
—
128.3
212.5
548.8
Supplemental combined Adjusted EBITDA
$
245.1
$
528.5
$
1,543.5
$
1,519.6
(a)
Adjusted EBITDA includes Ortho activities from May 27, 2022 through
January 1, 2023.
QuidelOrtho
Supplemental Combined Revenues by
Business Unit and Region
(In millions, unaudited)
Three Months Ended
January 1, 2023
January 2, 2022
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
Labs
$
314.7
$
363.4
(13.4
)%
(2.5
)%
(10.9
)%
1.3
%
(9.6
)%
Transfusion Medicine
162.5
169.7
(4.2
)%
(5.4
)%
1.2
%
—
%
1.2
%
Point of Care
374.7
573.8
(34.7
)%
(0.3
)%
(34.4
)%
171.9
%
137.5
%
Molecular Diagnostics
14.6
51.0
(71.4
)%
(0.5
)%
(70.9
)%
116.2
%
45.3
%
Total supplemental combined revenues
$
866.5
$
1,157.9
(25.2
)%
(1.8
)%
(23.4
)%
42.0
%
18.6
%
Three Months Ended
January 1, 2023
January 2, 2022
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
North America
$
619.2
$
862.1
(28.2
)%
0.1
%
(28.3
)%
66.6
%
38.3
%
EMEA
75.8
88.8
(14.6
)%
(6.8
)%
(7.8
)%
4.5
%
(3.3
)%
China
56.9
86.5
(34.2
)%
(6.9
)%
(27.3
)%
—
%
(27.3
)%
Other
114.6
120.5
(4.9
)%
(7.5
)%
2.6
%
4.4
%
7.0
%
Total supplemental combined revenues
$
866.5
$
1,157.9
(25.2
)%
(1.8
)%
(23.4
)%
42.0
%
18.6
%
Fiscal Year Ended
January 1, 2023
January 2, 2022
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
Labs
$
1,331.2
$
1,423.4
(6.5
)%
(2.3
)%
(4.2
)%
2.6
%
(1.6
)%
Transfusion Medicine
668.1
664.2
0.6
%
(4.8
)%
5.4
%
—
%
5.4
%
Point of Care
1,955.2
1,453.3
34.5
%
(0.6
)%
35.1
%
31.9
%
67.0
%
Molecular Diagnostics
96.7
200.5
(51.8
)%
(0.3
)%
(51.5
)%
78.3
%
26.8
%
Total supplemental combined revenues
$
4,051.2
$
3,741.4
8.3
%
(2.0
)%
10.3
%
0.8
%
11.1
%
Fiscal Year Ended
January 1, 2023
January 2, 2022
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency, ex
COVID-19 revenue
North America
$
2,970.3
$
2,564.7
15.8
%
—
%
15.8
%
5.1
%
20.9
%
EMEA
316.4
346.0
(8.6
)%
(8.0
)%
(0.6
)%
3.4
%
2.8
%
China
297.1
332.5
(10.6
)%
(3.7
)%
(6.9
)%
(8.3
)%
(15.2
)%
Other
467.4
498.2
(6.2
)%
(6.4
)%
0.2
%
6.9
%
7.1
%
Total supplemental combined revenues
$
4,051.2
$
3,741.4
8.3
%
(2.0
)%
10.3
%
0.8
%
11.1
%
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/20230215005782/en/
Investor Contact: Bryan Brokmeier, CFA IR@Quidel.com
Media Contact: media@Quidel.com
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