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 second quarter ended June 30, 2017.
Second Quarter and Recent 2017 Highlights:
Financial Highlights
- Total revenue was $38.3 million as
compared to $39.1 million in the second quarter of 2016.
- Total Molecular revenues increased 44%
from the second quarter of 2016.
- Reported GAAP EPS of $(0.35) per
share in the second quarter of 2017, as compared to $(0.24)
per share in the second quarter of 2016 and reported non-GAAP EPS
of $(0.12) per share in the second quarter of 2017, as
compared to $(0.11) per share in the second quarter of 2016.
Operational Highlights
- Announced definitive agreements to
acquire Alere Triage® assets.
- Completed the acquisition of
InflammaDry® and AdenoPlus® CLIA waived eye health businesses.
- Received CE Mark, FDA clearance and
CLIA waiver for point-of-care Sofia® 2 Immunoassay Analyzer for use
with Sofia® Respiratory Syncytial Virus (RSV) assay.
- Received CE Mark, FDA clearance and
CLIA waiver for point-of-care Sofia® 2 Immunoassay Analyzer for use
with Sofia® Influenza A+B assay.
- Received FDA clearance for Solana® C.
difficile molecular assay.
- Received approval for point-of-care
Sofia® Influenza A+B assay from Japan's MOH.
- Received the CE Mark for Thyretain® TBI
Reporter BioAssay.
Second Quarter 2017 Results
Total revenue for the second quarter of 2017 decreased 2% over
the second quarter of 2016 to $38.3 million. Excluding Grant
Revenue, revenues increased by 1%. The slight increase excluding
Grant Revenue was due to higher Molecular product sales that were
mostly offset by decreases in Virology and Specialty Products.
Immunoassay product revenue increased 1% in the second quarter,
as Sofia revenue increased 21% to $7.9 million, while QuickVue
product revenue decreased 10% to $13.8 million. During the second
quarter of 2017, Molecular revenue increased 44% to $3.2 million
and Specialty Products decreased 5% to $3.1 million. The Virology
category declined 7%, mostly due to a decline in the sales of
respiratory products.
“Our second quarter financial results reflected typical
seasonality in our business with the decline in testing for
Influenza-like Illness (ILI) in April,” said Douglas Bryant,
president and CEO of Quidel Corporation. “Overall, it was an
incredibly productive quarter for our team in advancing our
long-term strategic plan. First and foremost, we negotiated
agreements to acquire the Alere Triage® assets. This important
transaction will broaden our business by unlocking growth
opportunities in several new end markets, both geographically and
by product. And although on a much smaller scale, we completed
another acquisition that gives us an entrée into the rapidly
evolving eye health segment. In addition, on an organic basis,
we received regulatory clearance for a number of our Sofia®, Sofia®
2 and Solana® products. We are incredibly encouraged by the
progress we have made in positioning Quidel for sustained,
long-term success and value creation for our shareholders.”
Cost of Sales in the second quarter of 2017 increased $0.4
million to $17.8 million, due to higher depreciation expense
related to the increased number of Sofia and Solana instrument
placements and costs associated with the integration of the
InflammaDry® and AdenoPlus® diagnostic businesses. Gross margin for
the quarter was 54% as compared to 56% for the same period last
year driven by the decrease in grant revenue. R&D expense
decreased by $2.0 million in the second quarter as compared to the
same period last year, primarily due to reduced spend for Savanna
and lower clinical trial costs. Sales and Marketing expense for the
second quarter of 2017 was approximately equal to the second
quarter of 2016. G&A expense in the second quarter of 2017 was
in line with the second quarter of 2016. In the second quarter of
2017, we recorded one-time costs of $2.4 million in business
development activities related primarily to the announced
definitive agreements to acquire Alere's Triage assets.
Net loss for the second quarter of 2017 was $11.8 million, or
$(0.35) per share, as compared to net loss of $7.8 million, or
$(0.24) per share, for the second quarter of 2016. On a non-GAAP
basis, excluding amortization of intangibles, stock compensation
expense and certain non-recurring items, net loss for the second
quarter of 2017 was $4.0 million, or $(0.12) per share, as compared
to a net loss of $3.4 million, or $(0.11) per share, for the same
period in 2016.
Results for the Six Months Ended June 30, 2017
Total revenues increased 25% to $112.0
million for the six-month period ended June 30,
2017, as compared to $89.5 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 46% in the six-month
period ended June 30, 2017, as Sofia revenue increased 72% to
$33.0 million, and QuickVue product revenue increased 32% to $46.2
million. During the six-month period ended June 30, 2017,
Molecular revenue increased 46% to $6.3 million and Specialty
Products remained consistent with prior year at $5.7 million. The
Virology category declined 7% while the Royalties, grant and other
revenue category decreased by $3.1 million, as grant revenue
recognized in the six-month period ended June 30, 2016 was not
repeated in 2017.
For the six-month period ended June 30, 2017, total
costs and expenses were $103.8 million as compared
to $101.9 million over the same period in 2016. Cost
of Sales increased by $4.8 million from the first six 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 $6.9 million
primarily driven by a decrease in development spending for the
Savanna MDx platform and reduced spending on clinical trials. Sales
and Marketing expense increased by $1.4 million, due
primarily to the increased personnel and consulting costs as well
as costs associated with the acquired InflammaDry® and AdenoPlus®
diagnostic businesses. General & Administrative
expenses in the first half of 2017 were roughly equivalent to
the first half of 2016. For the first six months of 2017, we
recorded $2.4 million in one-time costs, due to business
development activities primarily related to the announced
definitive agreements to acquire Alere's Triage assets.
For the first six-months of 2017, net income
was $2.4 million, or $0.07 per diluted share, as
compared to a net loss of $11.3 million,
or $(0.35) per share, for the same six-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 six months
ended June 30, 2017 was $11.3 million,
or $0.33 per diluted share, as compared to a net loss
of $2.8 million, or $(0.09) per share, for the
first six 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
second 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 5565-4364.
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
5565-4364.
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® 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 research and development engine is
also developing a continuum of diagnostic solutions from advanced
lateral-flow and direct fluorescent antibody 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,
our reliance on development of new technologies, fluctuations in
our operating results resulting from the timing of the onset,
length and severity of cold and flu seasons, seasonality,
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, the reimbursement system currently in place and future
changes to that system, changes in economic conditions in our
domestic and international markets, lower than anticipated market
penetration of our products, 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 proprietary technology rights; 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,
including our ability to effect strategic acquisitions, including
the acquisitions of Alere Inc.’s cardiovascular and toxicology
Triage® MeterPro business and the assets and liabilities relating
to Alere’s contractual arrangement with Beckman Coulter, Inc. for
the supply by Seller of antibodies and other inputs related to, and
distribution of, the Triage® BNP Test for the Beckman Coulter
Access Family of Immunoassay Systems and to integrate companies or
technologies we have acquired or may acquire including our ability
to achieve anticipated synergies and process improvements;
intellectual property risks, including but not limited to,
infringement litigation; our inability to settle conversions of our
3.25% Convertible Senior Notes due 2020 (the “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 impact of restrictive covenants in our credit
agreements and our ability to comply with these covenants,
including our ability to incur additional indebtedness; the amount
of, and our ability to repay, renew or extend, our outstanding debt
and its impact on our operations and our ability to obtain
financing; our ability to generate cash, including to service our
debt; our need for additional funds to finance our capital or
operating needs; the financial soundness of our customers and
suppliers; 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 U.S. Food
and Drug Administration (the “FDA”); or other regulatory
authorities or loss of any 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 the indenture governing 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 June 30, 2017
2016 Total revenues
$
38,267
$ 39,133 Cost of sales (excludes amortization of intangible assets
from acquired businesses and technology)
17,755
17,318 Research and development
7,627
9,656 Sales and marketing
12,360
12,206 General and administrative
6,783
6,430 Amortization of intangible assets from acquired businesses
and technology
2,390
2,290 One-time acquisition costs
2,379
252 Total costs and expenses
49,294
48,152 Operating loss
(11,027
) (9,019 ) Interest expense, net
(2,778
) (2,924 ) Loss before income taxes
(13,805
) (11,943 ) Benefit for income taxes
(1,963
) (4,103 ) Net loss
$
(11,842
)
$ (7,840 ) Basic and diluted loss per share
$
(0.35
) $ (0.24 ) Shares used in basic and diluted per share
calculation
33,500
32,541 Gross profit as a % of total revenues
54
% 56 % Research and development as a % of total revenues
20
% 25 % Sales and marketing as a % of total revenues
32
% 31 % General and administrative as a % of total revenues
18
% 16 % Condensed balance sheet data (in thousands):
6/30/2017
12/31/2016 Cash and cash equivalents $ 175,048 $ 169,508
Accounts receivable, net 19,836 24,990 Inventories 22,964 26,045
Total assets 398,537 388,250 Long-term debt 151,000 148,319
Stockholders’ equity 212,588 200,630
Six Months
Ended June 30, 2017 2016 Total revenues $
111,959 $ 89,454 Cost of sales (excludes amortization of intangible
assets from acquired businesses and technology) 41,325 36,567
Research and development 15,502 22,363 Sales and marketing 25,915
24,523 General and administrative 13,903 13,600 Amortization of
intangible assets from acquired businesses and technology 4,681
4,509 One-time acquisition costs 2,431 371 Total
costs and expenses 103,757 101,933 Operating income
(loss) 8,202 (12,479 ) Interest expense, net (5,603 ) (5,613 )
Income (loss) before income taxes 2,599 (18,092 ) Provision
(benefit) for income taxes 151 (6,806 ) Net income (loss) $
2,448 $ (11,286 ) Basic earnings (loss) per share $
0.07 $ (0.35 ) Diluted earnings (loss) per share $ 0.07 $ (0.35 )
Shares used in basic per share calculation 33,351 32,632
Shares used in diluted per share calculation 34,295 32,632
Gross profit as a % of total revenues 63 % 59 % Research and
development as a % of total revenues 14 % 25 % Sales and marketing
as a % of total revenues 23 % 27 % General and administrative as a
% of total revenues 12 % 15 %
Three Months Ended
June 30, Six Months Ended June 30, Consolidated
net revenues by product category are as follows (in thousands):
2017 2016 2017 2016
Immunoassays $ 21,983 $ 21,848 $ 79,516 $ 54,351 Molecular 3,214
2,236 6,325 4,344 Virology 9,218 9,861 19,214 20,701 Specialty
products 3,090 3,258 5,655 5,666 Royalties, grants and other 762
1,930 1,249 4,392 Total revenues 38,267
39,133 111,959 89,454
QUIDEL CORPORATION
Reconciliation of Non-GAAP Financial
Information
(In thousands, except per share data;
unaudited)
Three months ended June 30, Six months
ended June 30, 2017 2016 2017
2016 (unaudited) (unaudited) Net (loss) income - GAAP
$ (11,842 ) $ (7,840 ) $ 2,448 $ (11,286 ) Add: Non-cash stock
compensation expense 2,138 2,106 4,059 4,086 Amortization of
intangibles 2,515 2,399 4,885 4,751 Amortization of debt discount
and issuance costs 1,375 1,333 2,741 2,679 One-time acquisition
costs 2,379 252 2,431 371 Income tax impact of valuation allowance
for deferred tax assets 2,359 435 (326 ) 715 Income tax impact of
non-cash stock compensation expense, amortization of intangibles,
debt discount and issuance costs and one-time business development
expenses (2,940 ) (2,131 ) (4,940 ) (4,160 ) Adjusted net (loss)
income $ (4,016 ) $ (3,446 ) $ 11,298 $ (2,844 ) Basic
(loss) earnings per share: Adjusted net (loss) earnings $ (0.12 ) $
(0.11 ) $ 0.34 $ (0.09 ) Net (loss) income - GAAP $ (0.35 ) $ (0.24
) $ 0.07 $ (0.35 ) Diluted (loss) earnings per share: Adjusted net
(loss) earnings $ (0.12 ) $ (0.11 ) $ 0.33 $ (0.09 ) Net (loss)
income - GAAP $ (0.35 ) $ (0.24 ) $ 0.07 $ (0.35 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170726006232/en/
Quidel CorporationRandy StewardChief Financial
Officer858.552.7931orMedia and Investors Contact:Quidel
CorporationRuben Argueta858.646.8023ruben.argueta@quidel.com
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