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 third quarter ended September 30, 2017.
Third Quarter 2017 Financial Highlights
- Total revenue was $50.9 million as
compared to $49.3 million in the third quarter of 2016.
- Total Immunoassay product revenue
increased 19% from the third quarter of 2016.
- Total Molecular revenues increased 13%
from the third quarter of 2016.
- Reported GAAP EPS of $(0.16) per
share in the third quarter of 2017, as compared to $(0.02) per
share in the third quarter of 2016 and reported non-GAAP EPS
of $0.17 per diluted share in the third quarter of 2017, as
compared to $0.10 per diluted share in the third quarter of
2016.
Recent Operational Highlights
- Announced definitive agreements to
acquire Alere Triage® and B-type Naturietic Peptide (BNP) Assay
business run on Beckman Coulter Analyzers, which subsequently
closed on October 6, 2017.
- Received FDA Clearance for Its Solana®
RSV + hMPV Assay.
- Received FDA Clearance for Its
Point-of-Care Sofia® Lyme FIA.
Third Quarter 2017 Results
Total revenue for the third quarter of 2017 increased 3% over
the third quarter of 2016 to $50.9 million. Excluding the Gates
Grant Revenue, revenues increased by 12%. The increase excluding
the Gates Grant Revenue was due to higher Immunoassay product sales
that were partially offset by decreases in Virology and Specialty
Products.
Immunoassay product revenue increased 19% in the third quarter,
as Sofia revenue increased 39% to $19.6 million, while QuickVue
product revenue decreased 6% to $15.6 million. The InflammaDry® and
AdenoPlus® diagnostic businesses acquired from RPS contributed $1.3
million to this category in the quarter. During the third quarter
of 2017, Molecular revenue increased 13% to $2.8 million and
Specialty Products decreased 6% to $2.6 million. The Virology
category declined by 6%.
“Quidel has transformed itself with the completion of the
acquisition of the Alere Triage and B-type Naturietic Peptide (BNP)
Assay businesses, which we closed in early October. This
transaction broadens our business by unlocking growth opportunities
in several new end markets, both geographically and by product. We
are well underway in our efforts to bring together these two strong
organizations and look forward to providing updates as we move
through the process,” said Douglas Bryant, president and CEO of
Quidel Corporation. “For our legacy Quidel business, we had a
strong quarter, with revenues increasing 12% from the third quarter
of last year, excluding the Gates Grant revenue, supported by
continued growth in Immunoassay and Molecular product revenues. In
addition, we further advanced our rapid testing solutions with the
receipt of regulatory clearance for our Solana® and Sofia® products
to test for RSV and hMPV, the leading cause of viral respiratory
infections in both the young and elderly, and antibodies to
microorganisms associated with Lyme disease, respectively. The
future is bright for Quidel as we embark on a new chapter in our
business, which we believe will drive sustained, long-term growth
and shareholder value.”
Cost of Sales in the third quarter of 2017 increased $1.7
million to $19.4 million, driven by higher revenues, increased
manufacturing costs related to the acquisition of the RPS assets
and higher depreciation expense related to the increased number of
Sofia and Solana instrument placements. Gross margin for the
quarter was 62% as compared to 64% for the same period last year
driven by the increased manufacturing costs associated with RPS and
the decrease in grant revenues. Research and Development expense
decreased by $1.3 million in the third quarter as compared to the
same period last year, primarily due to reduced spend for Savanna.
Sales and Marketing expense increased by $1.0 million in the third
quarter of 2017, as compared to the third quarter of 2016 largely
due to the increased personnel and consulting costs associated with
the InflammaDry and AdenoPlus diagnostic businesses acquired during
the second quarter of 2017. General and Administrative expense in
the third quarter of 2017 was in line with the third quarter of
2016. In the third quarter of 2017, we recorded $4.6 million in due
diligence and integration costs related to the acquisition of the
Alere Triage and BNP assets.
Net loss for the third quarter of 2017 was $5.5 million, or
$(0.16) per share, as compared to net loss of $0.6 million, or
$(0.02) per share, for the third quarter of 2016. On a non-GAAP
basis, excluding amortization of intangibles, stock compensation
expense and certain non-recurring items, net income for the third
quarter of 2017 was $5.9 million, or $0.17 per diluted share, as
compared to net income of $3.2 million, or $0.10 per diluted share,
for the same period in 2016.
Results for the Nine Months Ended September 30, 2017
Total revenues increased 17% to $162.9
million for the nine-month period ended
September 30, 2017, as compared to $138.8
million for the same period in 2016. The increase in
revenues was primarily driven by greater sales of Immunoassay and
Molecular products that were partially offset by decreases in
Virology and Grant revenue.
Immunoassay product revenue increased 37% in the nine-month
period ended September 30, 2017, as Sofia revenue increased
58% to $52.7 million and QuickVue product revenue increased 20% to
$61.8 million. During the nine-month period ended
September 30, 2017, Molecular revenue increased 34% to $9.1
million and Specialty Products remained consistent with prior year
at $8.2 million. The Virology category declined 7% while the
Royalties, grant and other revenue category decreased by $7.1
million, as the Gates grant revenue recognized in the nine-month
period ended June 30, 2016 was not repeated in 2017.
For the nine-month period ended September 30, 2017,
total costs and expenses were $157.2 million as compared
to $149.1 million over the same period in 2016. Cost
of Sales increased by $6.4 million from the first nine months of
2016 driven by increased revenues in the current period, partially
offset by favorable product mix, with higher Influenza and
molecular product sales in the same period as compared to the prior
year. Research and Development expense decreased by $8.2 million
primarily driven by a decrease in development spending for the
Savanna MDx platform and lower spend on clinical trial activities.
Sales and Marketing expense increased by $2.4
million, due primarily to the personnel and consulting costs
associated with the acquired InflammaDry and AdenoPlus diagnostic
businesses as well as higher incentive and stock-based
compensation. General and Administrative expenses in the first
nine months of 2017 were roughly equivalent to the first nine
months of 2016. For the first nine months of 2017, we recorded $7.0
million in due diligence and integration costs related to the
acquisition of the RPS and Alere Triage and BNP assets.
For the first nine-months of 2017, net loss
was $3.1 million, or $(0.09) per share, as compared
to a net loss of $11.9 million, or $(0.36) per
share, for the same nine-month period in 2016. On a
non-GAAP basis, excluding amortization of intangibles, stock
compensation expense and certain non-recurring items, net income
for the nine months ended September 30,
2017 was $17.2 million, or $0.50 per diluted
share, as compared to net income of $0.4 million,
or $0.01 per diluted share, for the
first nine months of 2016.
Non-GAAP Financial Information
The Company is providing non-GAAP financial information to
exclude the effect of stock-based compensation, amortization of
intangibles and certain non-recurring items on income (loss) and
net earnings (loss) 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 (loss) and
adjusted net earnings (loss) 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
third quarter 2017 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 pass code 1067380.
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
1067380.
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 you 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 and
hospital and reference laboratories. 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,
fluctuations in our operating results resulting from seasonality,
the timing of the onset, length and severity of cold and flu
seasons, 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, changes in sales levels as it relates to the
absorption of our fixed costs, lower than anticipated market
penetration of our products, the reimbursement system currently in
place and future changes to that system, changes in economic
conditions in our domestic and international markets, 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 intellectual property; our
development of new technologies, products and markets; our reliance
on a limited number of key distributors; our reliance on sales of
our influenza diagnostics tests; our ability to manage our growth
strategy; our ability to integrate companies or technologies we
have acquired or may acquire, including integration and transition
risks, the ability to achieve anticipated financial results and
synergies, and effects of disruptions or threatened disruptions to
our relationships, or those of the acquired businesses, with
distributors, suppliers, customers and employees; intellectual
property risks, including but not limited to, infringement
litigation; our debt service requirements; 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; the possibility
that we may incur additional indebtedness; our need for additional
funds to finance our operating needs; volatility and disruption in
the global capital and credit markets; 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 FDA or any loss of previously received regulatory
approvals or clearances; changes in government policies; compliance
with other government regulations, such as safe working conditions,
manufacturing practices, environmental protection, fire hazard and
disposal of hazardous substances; third-party reimbursement
policies; our ability to meet demand for our products;
interruptions in our supply of raw materials; product defects;
business risks not covered by insurance and exposure to other
litigation claims; interruption to our computer systems;
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; dilution resulting from future sales of
our equity; volatility in our stock price; provisions in our
charter documents, Delaware law and 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 CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share data;
unaudited)
Three Months Ended September 30, 2017
2016 Total revenues $ 50,894 $ 49,341 Cost of sales
(excludes amortization of intangible assets from acquired
businesses and technology) 19,391 17,728 Research and development
7,468 8,801 Sales and marketing 12,898 11,853 General and
administrative 6,580 6,364 Amortization of intangible assets from
acquired businesses and technology 2,503 2,273 Acquisition and
integration costs 4,591 197 Total costs and expenses
53,431 47,216 Operating (loss) income (2,537 ) 2,125
Interest expense, net (2,784 ) (3,006 ) Loss before income taxes
(5,321 ) (881 ) Provision (benefit) for income taxes 204
(309 ) Net loss $ (5,525 ) $ (572 ) Basic and diluted loss
per share $ (0.16 ) $ (0.02 ) Shares used in basic and diluted per
share calculation 33,913 32,673 Gross profit as a % of total
revenues 62 % 64 % Research and development as a % of total
revenues 15 % 18 % Sales and marketing as a % of total revenues 25
% 24 % General and administrative as a % of total revenues 13 % 13
% Condensed balance sheet data (in thousands):
9/30/2017 12/31/2016 Cash and cash equivalents $
172,994 $ 169,508 Accounts receivable, net 41,575 24,990
Inventories 23,429 26,045 Total assets 413,821 388,250 Long-term
debt 152,354 148,319 Stockholders’ equity 218,884 200,630
Nine Months Ended September 30, 2017
2016 Total revenues $ 162,853 $ 138,795 Cost of sales
(excludes amortization of intangible assets from acquired
businesses and technology) 60,716 54,295 Research and development
22,970 31,164 Sales and marketing 38,813 36,376 General and
administrative 20,483 19,964 Amortization of intangible assets from
acquired businesses and technology 7,184 6,782 Acquisition and
integration costs 7,022 568 Total costs and expenses
157,188 149,149 Operating income (loss) 5,665 (10,354
) Interest expense, net (8,387 ) (8,619 ) Loss before income taxes
(2,722 ) (18,973 ) Provision (benefit) for income taxes 355
(7,115 ) Net loss $ (3,077 ) $ (11,858 ) Basic and diluted
loss per share $ (0.09 ) $ (0.36 ) Shares used in basic and
diluted per share calculation 33,538 32,645 Gross profit as
a % of total revenues 63 % 61 % Research and development as a % of
total revenues 14 % 22 % Sales and marketing as a % of total
revenues 24 % 26 % General and administrative as a % of total
revenues 13 % 14 %
Three Months Ended September 30,
Nine Months Ended September 30,
Consolidated net revenues by
productcategory are as follows (in thousands):
2017 2016 2017 2016 Immunoassays
$ 36,458 $ 30,573 $ 115,974 $ 84,924 Molecular 2,781 2,469 9,148
6,813 Virology 8,830 9,354 28,044 30,055 Specialty products 2,557
2,721 8,212 8,387 Royalties, grants and other 268 4,224
1,475 8,616 Total revenues 50,894
49,341 162,853 138,795
QUIDEL
CORPORATION Reconciliation of Non-GAAP Financial
Information (In thousands, except per share data;
unaudited) Three months ended September
30, Nine months ended September 30, 2017
2016 2017 2016 (unaudited)
(unaudited) Net loss - GAAP $ (5,525 ) $ (572 ) $ (3,077 ) $
(11,858 ) Add: Non-cash stock compensation expense 1,879 1,734
5,938 5,820 Amortization of intangibles 2,720 2,381 7,605 7,132
Amortization of debt discount and issuance costs 1,388 1,343 4,129
4,022 Acquisition and integration costs 4,591 197 7,022 568 Income
tax impact of valuation allowance for deferred tax assets 4,590 137
4,264 852
Income tax impact of non-cash stock
compensation expense, amortization of intangibles, debt discount
and issuance costs and acquisition and integration costs
(3,700 ) (1,980 ) (8,640 ) (6,140 ) Adjusted net income $ 5,943
$ 3,240 $ 17,241 $ 396 Basic earnings
(loss) per share: Adjusted net earnings $ 0.18 $ 0.10 $ 0.51 $ 0.01
Net loss - GAAP $ (0.16 ) $ (0.02 ) $ (0.09 ) $ (0.36 ) Diluted
earnings (loss) per share: Adjusted net earnings $ 0.17 $ 0.10 $
0.50 $ 0.01 Net loss - GAAP $ (0.16 ) $ (0.02 ) $ (0.09 ) $ (0.36 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171101006573/en/
Quidel Contact:Quidel CorporationRandy StewardChief Financial
Officer858.552.7931orMedia and Investors Contact:Quidel
CorporationAngie Mazza312.690.6006amazza@clermontpartners.com
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