Quidel Reports Fourth Quarter and Full Year 2021 Financial Results
02/17/2022 - 04:10 PM
SAN DIEGO --(BUSINESS WIRE)--
Quidel Corporation (NASDAQ: QDEL),December 31, 2021 .
Fourth Quarter 2021 Highlights
Signed definitive agreement to acquire Ortho Clinical Diagnostics Holdings plc ("Ortho"), funded through a combination of cash and newly issued shares in the combined company.
Total revenue was $636.9 million $809.2 million
Revenue for COVID-19 products was $511.8 million $405.3 million
Total Influenza revenue was $40.5 million Sofia ® 2 Flu + SARS antigen FIA).
Reported GAAP EPS of $6.85 $10.78
Reported non-GAAP EPS of $7.29 $11.07
Launched Savanna® MDx instrumented system in select ex-U.S. markets.
Full Year 2021 Highlights
Total revenue for 2021 increased to $1,698.6 million 2% increase from $1,661.7 million
Revenue for COVID-19 products in 2021 increased 42% to $1,267.0 million $891.0 million
Total Influenza revenue was $72.4 million
Reported GAAP EPS of $16.43 $18.60
Reported non-GAAP EPS of $17.72 $19.92
Entered retail and at-home testing markets with QuickVue At-Home OTC COVID-19 test by creating partnerships with CVS, Walgreens, McKesson, and National Institutes of Health (NIH).
Secured 12-month agreement with U.S. government worth over $500 million
Resolved ongoing litigation with Beckman Coulter ; substantially completed transition of the BNP business to Beckman Coulter for cash payments to Quidel of between $70.0 million $75.0 million
Opened new highly automated QuickVue manufacturing facility in Carlsbad, California .
Fourth Quarter 2021 Results
Total revenue for the fourth quarter of 2021 was $636.9 million $809.2 million $249 million Sofia 2 Flu + SARS antigen FIA in the quarter versus 2020. Also impacting revenue was a shift in product mix for our Rapid Immunoassay COVID-19 products from higher-priced Sofia products sold in the professional market to lower-priced QuickVue products sold in the retail, pharmacy and employer testing markets. Additionally, Molecular Diagnostics Solutions revenue decreased due to lower volumes and selling prices for our COVID-19 PCR products. Cardiometabolic Immunoassay revenue in the fourth quarter of 2021 were lower compared to the fourth quarter of 2020 driven primarily by Beckman BNP products, due to the transition and settlement agreements with Beckman Coulter for the BNP business. Currency exchange had a favorable impact of $2.0 million
Rapid Immunoassay product revenue in the fourth quarter of 2021 was $521.0 million Sofia sales were $92.8 million $620.4 million Sofia 2 Flu + SARS Antigen FIA revenue, as well as customer shift to the QuickVue At-Home COVID-19 test. This change was offset by an increase in QuickVue At-Home OTC COVID-19 test sales, which were $427.0 million $9.8 million $52.8 million Beckman Coulter for the BNP business. Molecular Diagnostic Solutions revenue decreased $45.5 million $50.9 million ® SARS-CoV-2 assay revenue, partially offset by an increase in Solana® product revenue. Specialized Diagnostic Solutions revenue increased 6% from the fourth quarter of 2020 to $12.2 million
“Quidel entered 2021 with considerable momentum, and throughout a transformational year, we leveraged that energy to open new channels for sustainable, long-term growth on a global scale,” said Douglas Bryant , President and Chief Executive Officer of Quidel. “Our performance was exceptional across the board ─ from shipping a record number of QuickVue COVID-19 and Sofia SARS antigen tests, to the successful launch of our Savanna MDx instrumented system in select ex-U.S. markets, to our definitive agreement to acquire Ortho ─ the Quidel team overcame obstacles and seized opportunities to dramatically broaden the range of patients, partners and providers we serve.
“Moving beyond the fourth quarter, demand for COVID-19 testing remains elevated, and despite ebbs and flows, we continue our previously announced work to accelerate development and production of tests to help meet demand from government, institutions and individuals,” Mr. Bryant said. “These efforts have helped to expand our footprint at the point of care, with the additional benefit of introducing our full portfolio of rapid diagnostic assays to engaged customer groups.”
Mr. Bryant noted, “While the year’s headlines were mostly about COVID-19, we remained focused on developing the growth drivers that will shape our future when COVID-19 ultimately reaches the endemic stage. Our key near-term opportunity is the anticipated U.S. launch of our revolutionary Savanna multiplex molecular platform, which allows for testing of up to 12 pathogens from a single sample in less than 25 minutes. Based on customer reviews in Europe , we believe Savanna will be a major growth driver, both in the U.S. and globally, for years to come.
“The timing of the Savanna launch, paired with our definitive agreement to acquire Ortho is fortuitous and makes our long-term growth story so compelling,” Mr. Bryant continued. “We believe that the portfolios and customer base of the combined company will prove to be powerfully complementary, and that the addition of Ortho’s global commercial operations will provide opportunities to significantly accelerate market penetration of Savanna as well as our full range of diagnostics worldwide. These transformational opportunities more than double our addressable market and fuel our excitement for 2022 and beyond.”
Mr. Bryant concluded, “As we close the books on 2021, I want to thank our Quidel team for the courage, creativity and resilience they showed personally and collectively in driving our business forward amid all the challenges of a second pandemic year. Their steadfast commitment to our mission of advancing diagnostics to improve human health is responsible for our success as a company and as a corporate citizen.”
Gross profit in the fourth quarter of 2021 was $489.3 million $212.2 million 77% , compared to 87% in the fourth quarter of 2020, due to the same factors. R&D expense increased by $0.6 million $18.0 million $2.3 million $7.8 million December 31, 2021 were primarily related to due diligence and other costs mostly associated with the pending Ortho transaction.
In the fourth quarter of 2021, Quidel recorded an income tax expense of $84.1 million $145.4 million December 31, 2021 as compared to the same period in the prior year is a result of lower pre-tax profits.
Net income for the fourth quarter of 2021 was $291.3 million $6.85 $470.1 million $10.78 $309.8 million $7.29 $482.8 million $11.07
Results for the Twelve Months Ended December 31, 2021
Total revenue for the twelve months ended December 31, 2021 increased 2% to $1,698.6 million $1,661.7 million 2% increase in revenue was driven primarily by incremental COVID-19 Rapid Immunoassay product sales, and to a lesser extent, by increased sales of Cardiometabolic Immunoassay products. This growth was partially offset by declines in revenue for Molecular Diagnostic Solutions and Specialized Diagnostic Solutions products. Foreign exchange had a positive impact of $7.9 million December 31, 2021 .
Rapid Immunoassay product revenue increased 5% in the twelve months ended December 31, 2021 to $1,197.5 million $563.2 million $611.5 million 47% decline in Sofia revenue to $582.2 million $255.8 million December 31, 2021 , representing a 5% increase from 2020. Molecular Diagnostic Solutions revenue decreased $22.5 million $200.5 million December 31, 2021 was $44.8 million 12% from the prior year, driven by lower sales of our Cell Culture products, primarily due to the lack of a respiratory season in early 2021.
Gross profit in the twelve months ended December 31, 2021 was $1,270.9 million 75% in 2021, down from 81% in 2020 due to the same factors. R&D expense increased by $11.4 million December 31, 2021 as compared to the same period last year, primarily due to increased spending on Savanna and QuickVue OTC projects, partially offset by decreased spending on Sofia development projects. Sales and marketing expense increased by $41.4 million December 31, 2021 , as compared to the same period in 2020, due to increased freight expense, increased promotional spending associated with the launch of the QuickVue At-Home OTC COVID-19 test, corporate sponsorships, higher labor costs and higher travel and meeting costs, partially offset by lower bad debt expense. G&A expense increased by $17.7 million $9.6 million December 31, 2021 were primarily related to due diligence and other costs mostly associated with the pending Ortho transaction.
Net income for the twelve months ended December 31, 2021 was $704.2 million $16.43 $810.3 million $18.60 December 31, 2021 was $759.7 million $17.72 $868.4 million $19.92
Non-GAAP Financial Information
Quidel is providing non-GAAP financial information to exclude the effect of stock-based compensation, amortization of intangibles, non-cash interest expense, foreign exchange gains and losses and certain non-recurring items on net income and earnings 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.
Quidel is providing the adjusted gross profit, adjusted operating income, adjusted net income, adjusted net earnings per share, and constant currency revenue information for the periods presented because it believes these non-GAAP financial measures enhance the comparison of Quidel’s financial results from period-to-period and to that of its competitors. Constant currency revenue is calculated by (i) translating current period revenues using prior period exchange rates and (ii) excluding any hedging effect recognized in the current period. The related constant currency fluctuation rate (expressed as a percentage) is calculated by determining the change in current period constant currency revenue compared to prior period revenue. 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 fourth quarter and full year 2021 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.
Investors may join the live call either by telephone or via webcast:
To participate in the live call by telephone from the U.S. , dial 844-200-6205, or from outside the U.S. , dial 929-526-1599, and enter access code 636452.
To join the live webcast, participants may click the following link directly: https://events.q4inc.com/attendee/599258989 or access the event via the Investor Relations section of the Quidel website (http://ir.quidel.com ).
The website replay will be available for one year. The telephone replay will be available for 14 days beginning at 8:00 p.m. Eastern Time (5:00 p.m. Pacific Time ) on February 17, 2022 by dialing 866-813-9403 from the U.S. , or +44 204-525-0658 for international callers, and entering access code 885823.
About Quidel Corporation
Quidel Corporation (Nasdaq: QDEL) is a leading manufacturer of diagnostic solutions at the point of care, delivering a continuum of rapid testing technologies that further improve the quality of health care throughout the globe. An innovator for over 40 years in the medical device industry, Quidel pioneered the first FDA-cleared point-of-care test for influenza in 1999 and was the first to market a rapid SARS-CoV-2 antigen test in the U.S. Under trusted brand names Sofia , Solana, Lyra, Triage® and QuickVue, Quidel’s comprehensive product portfolio includes tests for a wide range of infectious diseases, cardiac and autoimmune biomarkers, as well as a host of products to detect COVID-19. Quidel’s mission is to provide patients with immediate and frequent access to highly accurate, affordable testing for the good of our families, our communities and the world. For more information about Quidel, visit quidel.com .
View our story told by our people at www.quidel.com/ourstory .
Where You Can Find Additional Information
In connection with the proposed business combination transaction among Quidel, Ortho and Coronado Topco, Inc. (“Topco”), Topco has filed a registration statement on Form S-4 with the Securities and Exchange Commission (the “Commission”) that contains a joint proxy statement/prospectus and other relevant documents concerning the proposed transaction. YOU ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT DOCUMENTS FILED WITH THE COMMISSION (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT QUIDEL, ORTHO AND THE PROPOSED TRANSACTION. The joint proxy statement/prospectus will be mailed to Quidel’s stockholders and Ortho’s shareholders when available. The joint proxy statement/prospectus and the other documents filed with the Commission may also be obtained free of charge at the Commission’s website, www.sec.gov . In addition, you may obtain free copies of the joint proxy statement/prospectus and the other documents filed by Quidel and Ortho with the Commission by requesting them in writing from Quidel Corporation , 9975 Summers Ridge Road , San Diego, California 92121, Attention: Investor Relations, or by telephone at 858-646-8023, or from Ortho Clinical Diagnostics Holdings plc, 1001 Route 202 , Raritan, New Jersey 08869, Attention: Investor Relations, or by directing a written request to SVC Ortho-SVC@SARDVERB.com .
Quidel and Ortho and their respective directors and executive officers may be deemed under the rules of the Commission to be participants in the solicitation of proxies. Information about Quidel’s directors and executive officers and their ownership of Quidel’s common stock is set forth in the joint proxy statement/prospectus. Information about Ortho’s directors and executive officers and their ownership of Ortho’s ordinary shares is also set forth in the joint proxy statement/prospectus. The joint proxy statement/prospectus may be obtained free of charge from the sources indicated above. Information regarding the identity of the potential participants, and their direct or indirect interests in the transaction, by security holdings or otherwise, is included in the joint proxy statement/prospectus, which constitutes a part of the registration statement on Form S-4 filed by Topco with the Commission, as amended from time to time. Stockholders may obtain additional information about the interests of the directors and executive officers in the proposed transaction by reading the joint proxy statement/prospectus and other relevant materials filed with the Commission.
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 of the business combination transaction involving Quidel, Ortho and Topco, including the combined company’s future financial and operating results, plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Quidel’s and Ortho’s management and are subject to significant risks and uncertainties. Actual results may differ 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 evolution of the COVID-19 pandemic and its impact; competition; our development of new technologies, products, and markets; our reliance on sales of our COVID-19 and influenza diagnostic tests; our reliance on a limited number of key distributors; acceptance of our products among physicians, healthcare providers, or other customers; the impact of third-party reimbursement policies; our ability to meet demand for our products; interruptions in our supply of raw materials and other product and production components; costs and disruptions from failures in our information technology and storage systems; international risks, including compliance with product registration requirements and legal requirements, tariffs, currency exchange fluctuations, reduced protection of intellectual property rights, and taxes; worldwide economic, political, and social uncertainty; our development, acquisition, and protection of proprietary technology rights; intellectual property risks and third-party claims of infringement; loss of our Emergency Use Authorization from the U.S. Food and Drug Administration for our COVID-19 products; failures or delays in receiving regulatory approvals, clearances, or authorizations, the loss of previously received approvals, or other adverse actions by regulatory authorities; performance, timing, funding and compliance risks relating to government contracts; product defects; compliance with government regulations relating to the handling, storage, and disposal of hazardous substances; our ability to identify and successfully acquire and integrate potential acquisition targets; our need for additional funds to finance our capital or operating needs; failure to complete the proposed business combination transaction on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary regulatory and stockholder approvals, the sanction of the High Court of Justice of England and Wales and satisfaction of other closing conditions to consummate the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed business combination transaction; the challenges and costs of closing, integrating, restructuring and achieving anticipated synergies; the ability to retain key employees; and other economic, business, competitive, and/or regulatory factors affecting the businesses of Quidel and Ortho generally. Additional risks and factors are identified under “Risk Factors” in the joint proxy statement/prospectus and Quidel's Annual Report on Form 10-K filed on February 19, 2021 and subsequent reports filed with the Commission.
You should not rely upon 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. Neither Quidel nor Ortho undertakes an 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.
The City Code on Takeovers and Mergers
The City Code on Takeovers and Mergers does not apply to the proposed business combination.
QUIDEL CORPORATION
(In thousands, except per share data; unaudited)
Three months ended December 31 ,
Consolidated Statements of Operations:
2021
2020
Total revenues
$
636,867
$
809,203
Cost of sales
147,525
107,709
Gross profit
489,342
701,494
Research and development
26,107
25,495
Sales and marketing
56,214
38,239
General and administrative
22,489
20,165
Acquisition and integration costs
7,803
519
Total operating expenses
112,613
84,418
Operating income
376,729
617,076
Other expense, net
Interest and other expense, net
(1,354
)
(1,552
)
Total other expense, net
(1,354
)
(1,552
)
Income before income taxes
375,375
615,524
Provision for income taxes
84,058
145,394
Net income
$
291,317
$
470,130
Basic earnings per share
$
6.98
$
11.14
Diluted earnings per share
$
6.85
$
10.78
Shares used in basic per share calculation
41,758
42,211
Shares used in diluted per share calculation
42,500
43,622
Gross profit as a % of total revenues
77
%
87
%
Research and development as a % of total revenues
4
%
3
%
Sales and marketing as a % of total revenues
9
%
5
%
General and administrative as a % of total revenues
4
%
2
%
Consolidated net revenues by product category are as follows:
Rapid Immunoassay
$
520,998
$
631,253
Cardiometabolic Immunoassay
52,780
70,031
Molecular Diagnostic Solutions
50,934
96,431
Specialized Diagnostic Solutions
12,155
11,488
Total revenues
$
636,867
$
809,203
Condensed balance sheet data:
12/31/2021
12/31/2020
Cash and cash equivalents
$
802,751
$
489,941
Accounts receivable, net
$
377,969
$
497,688
Inventories
$
198,765
$
113,798
Total assets
$
2,430,374
$
1,871,164
Short-term debt
$
275
$
238
Long-term debt
$
361
$
4,100
Stockholders’ equity
$
1,929,362
$
1,332,703
QUIDEL CORPORATION
(In thousands, except per share data; unaudited)
Twelve months ended December 31 ,
Consolidated Statements of Operations:
2021
2020
Total revenues
$
1,698,551
$
1,661,668
Cost of sales
427,656
312,813
Gross profit
1,270,895
1,348,855
Research and development
95,701
84,292
Sales and marketing
175,325
133,957
General and administrative
84,247
66,586
Acquisition and integration costs
9,557
3,694
Total operating expenses
364,830
288,529
Operating income
906,065
1,060,326
Other expense, net
Interest and other expense, net
(5,706
)
(9,623
)
Loss on extinguishment of debt
—
(10,384
)
Total other expense, net
(5,706
)
(20,007
)
Income before income taxes
900,359
1,040,319
Provision for income taxes
196,133
230,032
Net income
$
704,226
$
810,287
Basic earnings per share
$
16.74
$
19.24
Diluted earnings per share
$
16.43
$
18.60
Shares used in basic per share calculation
42,078
42,124
Shares used in diluted per share calculation
42,874
43,591
Gross profit as a % of total revenues
75
%
81
%
Research and development as a % of total revenues
6
%
5
%
Sales and marketing as a % of total revenues
10
%
8
%
General and administrative as a % of total revenues
5
%
4
%
Consolidated net revenues by product category are as follows:
Rapid Immunoassay
$
1,197,459
$
1,144,831
Cardiometabolic Immunoassay
255,788
242,933
Molecular Diagnostic Solutions
200,487
222,964
Specialized Diagnostic Solutions
44,817
50,940
Total revenues
$
1,698,551
$
1,661,668
QUIDEL CORPORATION
Reconciliation of Non-GAAP Financial Information
(In thousands, except per share data; unaudited)
Three months ended December 31 ,
Gross Profit
Operating Income
Net Income
Diluted EPS
2021
2020
2021
2020
2021
2020
2021
2020
GAAP Financial Results
$
489,342
$
701,494
$
376,729
$
617,076
$
291,317
$
470,130
Interest expense on Convertible Senior Notes, net of tax
—
(13
)
Net income used for diluted earnings per share, if-converted method
291,317
470,117
$
6.85
$
10.78
Adjustments:
Non-cash stock compensation expense
597
780
6,727
6,458
6,727
6,458
Amortization of intangibles
2,126
1,901
7,738
7,166
7,738
7,166
Amortization of debt issuance costs on credit facility
100
100
Non-cash interest expense for deferred consideration
970
1,543
Gain on other investments
(247
)
—
Change in fair value of acquisition contingencies
117
557
117
557
Acquisition and integration costs
7,803
519
7,803
519
Foreign exchange (gain) loss
490
(307
)
Income tax impact of adjustments (a)
(5,214
)
(3,368
)
Adjusted
$
492,065
$
704,175
$
399,114
$
631,776
$
309,801
$
482,785
$
7.29
$
11.07
_______________
(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 22% for 2021 and 24% for 2020.
QUIDEL CORPORATION
Reconciliation of Non-GAAP Financial Information
(In thousands, except per share data; unaudited)
Twelve months ended December 31 ,
Gross Profit
Operating Income
Net Income
Diluted EPS
2021
2020
2021
2020
2021
2020
2021
2020
GAAP Financial Results
$
1,270,895
$
1,348,855
$
906,065
$
1,060,326
$
704,226
$
810,287
Interest expense on Convertible Senior Notes, net of tax
—
445
Net income used for diluted earnings per share, if-converted method
704,226
810,732
$
16.43
$
18.60
Adjustments:
Non-cash stock compensation expense
2,665
2,012
25,406
21,019
25,406
21,019
Amortization of intangibles
8,247
7,665
31,175
28,398
31,175
28,398
Amortization of debt issuance costs on credit facility
403
403
Non-cash interest expense for deferred consideration
4,485
6,569
Loss on extinguishment of Convertible Senior Notes
—
10,384
Gain on other investments
(1,411
)
—
Change in fair value of acquisition contingencies
218
1,405
218
1,405
Change in fair value of derivative liabilities - Convertible Senior Note
—
1,084
Acquisition and integration costs
9,557
3,694
9,557
3,694
Foreign exchange loss
1,288
40
Income tax impact of adjustments (a)
(15,647
)
(15,329
)
Adjusted
$
1,281,807
$
1,358,532
$
972,421
$
1,114,842
$
759,700
$
868,399
$
17.72
$
19.92
_______________
(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 22% for 2021 and 22% for 2020.
View source version on businesswire.com : https://www.businesswire.com/news/home/20220217005897/en/
Quidel Contact:
Quidel Corporation
Randy Steward
Media and Investors Contact:
Quidel Corporation
Ruben Argueta
rargueta@quidel.com
Source: Quidel Corporation
