— $100 million in annualized cost-savings
initiatives will benefit second half 2024 and first half 2025 —
— Strong progress on business review and
refocusing R&D investments on core growth areas —
Second quarter 2024 revenue was $637 million,
as reported:
- Total recurring revenue1 grew 3% as reported and 5% in constant
currency compared to the prior year period, excluding COVID-19
revenue and U.S. Donor Screening revenue
YTD 2024 revenue was $1.35 billion, as reported:
- Total recurring revenue1 grew 6% as reported and 7% in constant
currency compared to the prior year period, excluding COVID-19
revenue, a one-time third-party collaboration settlement and U.S.
Donor Screening revenue
QuidelOrtho Corporation (Nasdaq: QDEL) (the “Company” or
“QuidelOrtho”), a global provider of innovative in vitro diagnostic
technologies designed for point-of-care settings, clinical labs,
and transfusion medicine, today announced financial results for the
second quarter ended June 30, 2024.
“During the second quarter we performed in line with our
expectations across all segments and geographies while concurrently
undertaking a significant review of our assets, operations, and
opportunities for further company-wide savings,” said Brian J.
Blaser, President and Chief Executive Officer, QuidelOrtho. “The
findings of our internal review will serve as the foundation for
our long-range plan to drive growth and improve margins, as well as
focusing our R&D efforts and investments on the areas where we
see the greatest opportunity and return.”
Second Quarter 2024
The Company reported total revenue for the second quarter of
2024 of $637 million, compared to $665 million in the prior year
period. The decrease in total revenue was primarily due to lower
COVID-19 revenue in the second quarter of 2024 compared to the
prior year period. Foreign currency translation negatively impacted
second quarter 2024 results by 100 basis points. GAAP diluted loss
per share for the second quarter of 2024 was ($2.20), compared to
diluted loss per share of ($0.80) in the prior year period.
GAAP operating loss for the second quarter of 2024 was ($118)
million, compared to an operating loss of ($27) million in the
prior year period, and GAAP operating margin was (18%) compared to
(4%) in the prior year period. Second quarter 2024 results included
$31 million in integration-related charges and a $57 million asset
impairment charge related to long-term assets held for sale.
Adjusted diluted loss per share for the second quarter of 2024
was ($0.07), compared to adjusted diluted EPS of $0.26 in the prior
year period. Adjusted EBITDA was $90 million, compared to $113
million in the prior year period. Adjusted EBITDA margin was 14%,
compared to 17% in the prior year period. The year-over-year change
in adjusted diluted EPS and adjusted EBITDA was primarily due to
lower COVID-19 revenue.
1
Recurring revenue means revenues from
sales of our assays, reagents, consumables and services, and
excludes instruments.
Outlook and Near-Term Priorities
Blaser concluded, “During the second quarter, I had the
opportunity to engage with many of our customers, employees, and
investors, reinforcing my belief in QuidelOrtho’s long-term
opportunity. We evaluated our business and made progress on
aligning operating expenses with revenue expectations and focusing
our R&D efforts on key priorities. As we enter the second half
of the year, our strategic priorities remain clear: operate our
business to provide exceptional customer satisfaction and patient
care at the highest levels of quality and compliance; improve our
cost structure, focus on the areas of our product portfolio with
the highest growth potential and strengthen our position as a
leading in vitro diagnostic company.”
Conference Call Information
QuidelOrtho will hold a conference call beginning at 2:00 p.m.
PDT / 5:00 p.m. EDT to discuss its financial results. 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 833-470-1428 (domestic) or +1 929-526-1599 (international)
and entering Conference ID number 533267.
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) is a world leader in in
vitro diagnostics, developing and manufacturing intelligent
solutions that transform data into understanding and action for
more people in more places every day.
Offering industry-leading expertise in immunoassay and molecular
testing, clinical chemistry, and transfusion medicine, bringing
fast, accurate and reliable diagnostics when and where they are
needed – from home to hospital, lab to clinic, so that patients,
clinicians and health officials can spot trends sooner, respond
quicker and chart the course ahead with accuracy and
confidence.
Building upon its many years of groundbreaking innovation,
QuidelOrtho continues to partner with customers across the
healthcare continuum and around the globe to forge a new diagnostic
frontier. One where insights and solutions know no bounds,
expertise seamlessly connects and a more informed path is
illuminated for each of us.
QuidelOrtho is advancing diagnostics to power a healthier
future.
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. These statements are any statement contained herein that is
not strictly historical, including, but not limited to,
QuidelOrtho’s commercial, integration, transformation and other
strategic goals, future financial condition and operating results,
including results of cost savings initiatives, and other future
plans, objectives, strategies, expectations and intentions. Without
limiting the foregoing, the words “may,” “will,” “would,” “should,”
“might,” “expect,” “anticipate,” “believe,” “estimate,” “plan,”
“intend,” “goal,” “project,” “strategy,” “future,” “continue” or
similar words, expressions or the negative of such terms or other
comparable terminology are intended to identify forward-looking
statements. Such statements are based on the beliefs and
expectations of QuidelOrtho’s management as of today and are
subject to significant known and unknown risks and uncertainties.
Actual results or outcomes 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:
supply chain, production, logistics, distribution and labor
disruptions and challenges; the challenges and costs of
integrating, restructuring and achieving anticipated synergies as a
result of the business combination of Quidel Corporation and Ortho
Clinical Diagnostics Holdings plc; and other macroeconomic,
geopolitical, market, business, competitive and/or regulatory
factors affecting the business of QuidelOrtho generally, including
those discussed in QuidelOrtho’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2023 and subsequent reports filed
with the Securities and Exchange Commission (the “Commission”),
including under Part I, Item 1A, “Risk Factors” of the Form 10-K.
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. All
forward-looking statements are based on information currently
available to QuidelOrtho and speak only as of the date hereof.
QuidelOrtho undertakes 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.
Non-GAAP Financial Measures
This press release contains financial measures, including but
not limited to “constant currency” revenue and revenue changes,
“constant currency” recurring revenue and revenue changes,
“constant currency, ex-COVID-19” revenue and revenue changes,
“adjusted net (loss) income,” “adjusted diluted (loss) earnings per
share,” “adjusted EBITDA” and “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”). “Constant currency”
revenue and revenue changes, “constant currency” recurring revenue
and revenue changes, “constant currency, ex-COVID-19” revenue and
revenue changes, “adjusted net (loss) income,” “adjusted diluted
(loss) earnings per share,” “adjusted EBITDA” and “adjusted EBITDA
margin” 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’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 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
June 30, 2024
July 2, 2023
June 30, 2024
July 2, 2023
Total revenues
$
637.0
$
665.1
$
1,348.0
$
1,511.2
Cost of sales, excluding amortization of
intangibles
361.0
368.6
739.9
766.1
Selling, marketing and administrative
188.2
179.1
392.9
381.5
Research and development
56.3
62.4
115.5
124.2
Amortization of intangible assets
51.9
51.4
103.6
102.2
Integration related costs
30.9
24.2
53.5
53.9
Goodwill impairment charge
—
—
1,743.9
—
Asset impairment charge
56.9
0.5
56.9
1.0
Other operating expenses
9.3
5.8
17.3
9.6
Operating (loss) income
(117.5
)
(26.9
)
(1,875.5
)
72.7
Interest expense, net
41.0
36.5
80.0
73.2
Other expense, net
4.4
1.0
6.3
3.9
Loss before income taxes
(162.9
)
(64.4
)
(1,961.8
)
(4.4
)
Benefit from income taxes
(15.2
)
(11.2
)
(108.1
)
—
Net loss
$
(147.7
)
$
(53.2
)
$
(1,853.7
)
$
(4.4
)
Basic loss per share
$
(2.20
)
$
(0.80
)
$
(27.67
)
$
(0.07
)
Diluted loss per share
$
(2.20
)
$
(0.80
)
$
(27.67
)
$
(0.07
)
Weighted-average shares outstanding -
basic
67.1
66.8
67.0
66.7
Weighted-average shares outstanding -
diluted
67.1
66.8
67.0
66.7
QuidelOrtho
Condensed Consolidated Balance
Sheets
(Unaudited)
(In millions)
June 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
107.0
$
118.9
Marketable securities
—
48.4
Accounts receivable, net
269.5
303.3
Inventories
602.0
577.8
Prepaid expenses and other current
assets
310.0
262.1
Assets held for sale
52.8
—
Total current assets
1,341.3
1,310.5
Property, plant and equipment, net
1,326.7
1,443.8
Marketable securities
—
7.4
Right-of-use assets
177.2
169.6
Goodwill
732.5
2,492.0
Intangible assets, net
2,836.0
2,934.3
Deferred tax asset
24.7
25.9
Other assets
250.8
179.6
Total assets
$
6,689.2
$
8,563.1
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
237.4
$
294.8
Accrued payroll and related expenses
86.0
84.8
Income tax payable
3.5
11.1
Current portion of borrowings
356.4
139.8
Other current liabilities
249.1
303.3
Total current liabilities
932.4
833.8
Operating lease liabilities
177.7
172.8
Long-term borrowings
2,207.2
2,274.8
Deferred tax liability
127.9
192.2
Other liabilities
70.5
83.6
Total liabilities
3,515.7
3,557.2
Total stockholders’ equity
3,173.5
5,005.9
Total liabilities and stockholders’
equity
$
6,689.2
$
8,563.1
QuidelOrtho
Condensed Consolidated Statements
of Cash Flows
(Unaudited)
(In millions)
Six Months Ended
June 30, 2024
July 2, 2023
Cash (used for) provided by operating
activities
$
(98.6
)
$
158.3
Cash used for investing activities
(55.5
)
(111.2
)
Cash provided by (used for) financing
activities
144.0
(159.3
)
Effect of exchange rates on cash
(1.9
)
(2.1
)
Net decrease in cash, cash equivalents and
restricted cash
(12.0
)
(114.3
)
Cash, cash equivalents and restricted cash
at beginning of period
119.5
293.9
Cash, cash equivalents and restricted cash
at end of period
$
107.5
$
179.6
Reconciliation to amounts within the
consolidated balance sheets:
Cash and cash equivalents
$
107.0
$
178.6
Restricted cash in Other assets
0.5
1.0
Cash, cash equivalents and restricted
cash
$
107.5
$
179.6
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted Net (Loss) Income
(In millions, except per share
data; unaudited)
Three Months Ended
Six Months Ended
June 30, 2024
Diluted EPS
July 2, 2023
Diluted EPS
June 30, 2024
Diluted EPS
July 2, 2023
Diluted EPS
Net loss
$
(147.7
)
$
(2.20
)
$
(53.2
)
$
(0.80
)
$
(1,853.7
)
$
(27.67
)
$
(4.4
)
$
(0.07
)
Adjustments:
Amortization of intangibles
51.9
51.4
103.6
102.2
Integration related costs
30.9
24.2
53.5
53.9
Goodwill impairment charge
—
—
1,743.9
—
Asset impairment charge
56.9
0.5
56.9
1.0
Incremental depreciation on PP&E fair
value adjustment
9.1
8.5
18.2
17.1
Credit Agreement amendment fees
4.0
—
4.0
—
Amortization of deferred cloud computing
implementation costs
3.0
1.5
5.9
3.1
EU medical device regulation transition
costs
0.5
0.7
1.1
1.5
Non-cash interest expense for deferred
consideration
—
0.1
—
0.7
Employee compensation charges
—
—
5.6
—
(Gain) loss on investments
(0.7
)
0.2
—
0.2
Other adjustments
1.1
—
1.8
1.5
Income tax impact of adjustments
(11.2
)
(15.2
)
(112.6
)
(37.3
)
Discrete tax items
(2.6
)
(1.3
)
(3.2
)
(1.1
)
Adjusted net (loss) income
$
(4.8
)
$
(0.07
)
$
17.4
$
0.26
$
25.0
$
0.37
$
138.4
$
2.06
Weighted-average shares outstanding -
diluted
67.1
67.2
67.3
67.2
QuidelOrtho
Reconciliation of Non-GAAP
Financial Information - Adjusted EBITDA
(In millions, unaudited)
Three Months Ended
Six Months Ended
June 30, 2024
July 2, 2023
June 30, 2024
July 2, 2023
Net loss
$
(147.7
)
$
(53.2
)
$
(1,853.7
)
$
(4.4
)
Depreciation and amortization
116.1
114.5
231.0
228.7
Interest expense, net
41.0
36.5
80.0
73.2
Benefit from income taxes
(15.2
)
(11.2
)
(108.1
)
—
Integration related costs
30.9
24.2
53.5
53.9
Goodwill impairment charge
—
—
1,743.9
—
Asset impairment charge
56.9
0.5
56.9
1.0
Credit Agreement amendment fees
4.0
—
4.0
—
Amortization of deferred cloud computing
implementation costs
3.0
1.5
5.9
3.1
EU medical device regulation transition
costs
0.5
0.7
1.1
1.5
Employee compensation charges
—
—
5.6
—
Tax indemnification income
—
(0.4
)
—
(0.1
)
(Gain) loss on investments
(0.7
)
0.2
—
0.2
Other adjustments
1.1
—
1.8
1.5
Adjusted EBITDA
$
89.9
$
113.3
$
221.9
$
358.6
QuidelOrtho
Revenues by Business Unit and
Region
(In millions, unaudited)
Three Months Ended
June 30, 2024
July 2, 2023
% Change
Currency Impact
Constant Currency (a)
Respiratory revenues
$
58.0
$
89.0
(34.8
)%
—
%
(34.8
)%
Non-Respiratory revenues
579.0
576.1
0.5
%
(1.1
)%
1.6
%
Total revenues
$
637.0
$
665.1
(4.2
)%
(0.9
)%
(3.3
)%
Three Months Ended
June 30, 2024
July 2, 2023
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency (a)
ex COVID-19 Revenue
Labs
$
354.2
$
361.4
(2.0
)%
(1.0
)%
(1.0
)%
(0.5
)%
(0.5
)%
Transfusion Medicine
161.3
163.3
(1.2
)%
(1.7
)%
0.5
%
—
%
0.5
%
Point of Care
117.1
134.2
(12.7
)%
0.1
%
(12.8
)%
(33.1
)%
20.3
%
Molecular Diagnostics
4.4
6.2
(29.0
)%
0.4
%
(29.4
)%
(15.0
)%
(14.4
)%
Total revenues
$
637.0
$
665.1
(4.2
)%
(0.9
)%
(3.3
)%
(5.8
)%
2.5
%
Three Months Ended
June 30, 2024
July 2, 2023
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency (a)
ex COVID-19 Revenue
North America
$
350.1
$
378.8
(7.6
)%
0.1
%
(7.7
)%
(9.7
)%
2.0
%
EMEA
81.1
80.6
0.6
%
(0.4
)%
1.0
%
(0.7
)%
1.7
%
China
81.6
81.3
0.4
%
(3.7
)%
4.1
%
—
%
4.1
%
Other
124.2
124.4
(0.2
)%
(3.1
)%
2.9
%
(0.4
)%
3.3
%
Total revenues
$
637.0
$
665.1
(4.2
)%
(0.9
)%
(3.3
)%
(5.8
)%
2.5
%
(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
period. This additional non-GAAP financial information is not meant
to be considered in isolation from or as a substitute for financial
information prepared in accordance with GAAP.
Six Months Ended
June 30, 2024
July 2, 2023
% Change
Currency Impact
Constant Currency (a)
Respiratory revenues
$
195.3
$
354.6
(44.9
)%
—
%
(44.9
)%
Non-Respiratory revenues
1,152.7
1,156.6
(0.3
)%
(1.0
)%
0.7
%
Total revenues
$
1,348.0
$
1,511.2
(10.8
)%
(0.7
)%
(10.1
)%
Six Months Ended
June 30, 2024
July 2, 2023
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency (a)
ex COVID-19 Revenue
Labs (b)
$
711.1
$
732.1
(2.9
)%
(0.9
)%
(2.0
)%
(0.6
)%
(1.4
)%
Transfusion Medicine
321.6
319.2
0.8
%
(1.5
)%
2.3
%
—
%
2.3
%
Point of Care
303.7
442.3
(31.3
)%
—
%
(31.3
)%
(61.0
)%
29.7
%
Molecular Diagnostics
11.6
17.6
(34.1
)%
—
%
(34.1
)%
(35.9
)%
1.8
%
Total revenues (b)
$
1,348.0
$
1,511.2
(10.8
)%
(0.7
)%
(10.1
)%
(14.3
)%
4.2
%
Six Months Ended
June 30, 2024
July 2, 2023
% Change
Currency Impact
Constant Currency (a)
Less: COVID-19 revenue
impact
Constant Currency (a)
ex COVID-19 Revenue
North America
$
784.0
$
961.6
(18.5
)%
(0.2
)%
(18.3
)%
(21.8
)%
3.5
%
EMEA
165.9
161.9
2.5
%
0.1
%
2.4
%
(1.4
)%
3.8
%
China
157.7
151.9
3.8
%
(4.0
)%
7.8
%
—
%
7.8
%
Other
240.4
235.8
2.0
%
(2.3
)%
4.3
%
(0.1
)%
4.4
%
Total revenues (b)
$
1,348.0
$
1,511.2
(10.8
)%
(0.7
)%
(10.1
)%
(14.3
)%
4.2
%
(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
period. 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.
(b)
The six months ended July 2, 2023,
includes an approximate $19 million settlement award from a third
party related to one of the Company’s collaboration agreements.
QuidelOrtho
Revenues reconciliation to
non-GAAP measures
(In millions, unaudited)
Three Months Ended
June 30, 2024
July 2, 2023
% Change
Currency Impact
Constant Currency (a)
Total revenues
$
637.0
$
665.1
(4.2
)%
(0.9
)%
(3.3
)%
COVID-19 revenue
(18.9
)
(55.9
)
Instrument revenue
(35.0
)
(43.0
)
U.S. Donor Screening revenue
(32.3
)
(33.9
)
Total recurring revenue(b), ex-COVID-19
and U.S Donor Screening revenue
$
550.8
$
532.3
3.5
%
(1.1
)%
4.6
%
Six Months Ended
June 30, 2024
July 2, 2023
% Change
Currency Impact
Constant Currency (a)
Total revenues
$
1,348.0
$
1,511.2
(10.8
)%
(0.7
)%
(10.1
)%
COVID-19 revenue
(69.1
)
(272.0
)
Instrument revenue
(75.8
)
(80.9
)
U.S. Donor Screening revenue
(65.4
)
(65.2
)
One-time third-party settlement
—
(19.2
)
Total recurring revenue(b), ex-COVID-19,
U.S. Donor Screening revenue, and one-time third-party
settlement
$
1,137.7
$
1,073.9
5.9
%
(1.2
)%
7.1
%
(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
period. This additional non-GAAP financial information is not meant
to be considered in isolation from or as a substitute for financial
information prepared in accordance with GAAP.
(b)
Recurring revenue means revenues from
sales of our assays, reagents, consumables and services, and
excludes instruments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731099599/en/
Investor Contact: Juliet Cunningham Vice President,
Investor Relations IR@quidelortho.com
Media Contact: D. Nikki Wheeler Senior Director,
Corporate Communications media@quidelortho.com
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