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 fourth quarter and year ended December 31, 2017.
Fourth Quarter 2017 Highlights:
- Closed the acquisition of the Triage
and BNP Businesses from Alere.
- Total revenue was $114.9 million as
compared to $52.8 million in the fourth quarter of 2016.
- Total influenza revenue increased 44%
from the fourth quarter of 2016 to $33.5 million.
- Molecular revenues grew 67% to $4.5
million.
- Reported GAAP EPS of $(0.15) per
share and non-GAAP EPS of $0.56 per diluted share.
- Received 510(k) clearance and CLIA
waiver from the U.S. Food and Drug Administration (FDA) for the
Sofia® Strep A+ assay for use on the Sofia® 2 instrumented
system.
- Received 510(k) clearances from the FDA
for the Sofia® Lyme assay for use on the Sofia® instrumented
system, for the Solana® GBS and Solana® RSV + hMPV assays for use
on the Solana® instrumented system.
Full Year 2017 Highlights:
- Total revenue increased by 45% to
$277.7 million, as compared to $191.6 million in 2016.
- Total influenza revenue increased 50%
from 2016 to $107.5 million.
- Reported GAAP EPS of $(0.24) per
share and non-GAAP EPS of $1.07 per diluted share for the full
year 2017.
- Received 510(k) clearance and CLIA
waiver from the FDA for three Sofia® assays (Influenza A+B, RSV,
and Strep A+) for use on the Sofia® 2 instrumented system.
- Received 510(k) clearances from the FDA
for the Sofia® Lyme assay for use on the Sofia® instrumented
system, and for 4 new Solana® assays (GBS, C. difficile, RSV +
hMPV) for use on the Solana® instrumented system.
Fourth Quarter 2017 Results
Total revenue for the fourth quarter of 2017 was $114.9 million,
versus $52.8 million in the fourth quarter of 2016. The 118%
increase in revenue from the fourth quarter of 2016 was driven by
the Cardiac Immunoassay revenue from the acquired Triage and BNP
Businesses, increased sales of Rapid Immunoassay products, and to a
lesser extent, revenue growth from Molecular Diagnostics and
Specialized Diagnostics products.
Cardiac Immunoassay revenue, which includes Triage, Triage
Toxicology and BNP product revenues, totaled $47.0 million in the
fourth quarter of 2017. Rapid Immunoassay product revenue (which
includes QuickVue, Sofia and Eye Health products) increased 35% in
the fourth quarter of 2017 to $49.1 million, led by a 65% rise in
Sofia revenue, while QuickVue sales remained even with the fourth
quarter of last year. Molecular Diagnostics revenue increased 67%
to $4.5 million, led by 221% growth in Solana. Specialized
Diagnostics, which includes revenue from DHI, Specialty and Other,
grew 5% from the fourth quarter of 2016 to $14.2 million.
“We took great strides in the fourth quarter toward becoming a
broader-based business. We completed the acquisition of Alere's
Triage and BNP Businesses, which for Quidel, proved to be
transformative in nature, and created a more diversified
diagnostics company. Notably, the integration of the Alere assets
is running ahead of schedule. And organically, we also placed the
greatest number of Sofia instruments in any quarter on record,
catalyzed by the commercial introduction and CLIA waiver of our
Sofia 2 instrument and its companion assays. Further, an increase
in Flu, Strep and RSV product utilization due to a robust
respiratory disease season provided a year-end tailwind to our
legacy business,” said Douglas Bryant, president and CEO of Quidel
Corporation. “Thanks to the hard work of many across our company,
we had a great year, and believe that Quidel is well-positioned for
sustained, long-term success and value creation for our
shareholders.”
Gross Profit in the fourth quarter of 2017 increased to $59.1
million, the result of increased sales volumes associated with the
acquired Triage and BNP Businesses and Rapid Immunoassay products,
as well as favorable product mix. Overall, gross margin for the
quarter was 51% as compared to 61% for the same period last year.
Amortization of intangibles reduced the gross margin by 3
percentage points, and the Triage/BNP inventory step-up of fair
value reduced the consolidated gross margin by an additional 10
percentage points. R&D expense increased by $3.2 million in the
fourth quarter as compared to the same period last year, primarily
due to the acquisition of the Triage business. Sales and Marketing
expense increased by $14.3 million in the fourth quarter of 2017,
as compared to the fourth quarter of 2016, largely due to
incremental personnel costs associated with the Triage business.
G&A expense increased by $2.3 million in the quarter, primarily
due to higher incentive and stock-based compensation and costs
associated with the Triage and BNP Businesses. Acquisition and
Integration Costs were $9.5 million, driven by due diligence,
transaction and integration costs associated with the Triage and
BNP Businesses.
Net loss for the fourth quarter of 2017 was $5.1 million, or
$(0.15) per share, as compared to net loss of $2.0 million, or
$(0.06) per share, for the fourth quarter of 2016. On a non-GAAP
basis, excluding amortization of intangibles, stock compensation
expense and certain non-recurring items, net income (adjusted) for
the fourth quarter of 2017 was $20.2 million, or $0.56 per diluted
share, as compared to net income (adjusted) of $5.8 million, or
$0.17 per diluted share, for the same period in 2016.
Full Year 2017 Results
Total revenues for the twelve-month period ended
December 31, 2017 were $277.7 million, as compared to $191.6
million for 2016. The 45% increase in revenue was primarily driven
by Cardiac Immunoassay revenue from the acquired Triage and BNP
Businesses, as well as increased sales of Rapid Immunoassay and
Molecular Diagnostics products, that were partially offset by
decreased sales of Specialized Diagnostics products.
Cardiac Immunoassay revenue totaled $47.0 million for the year,
reflecting Quidel's ownership of the acquired businesses that began
in the fourth quarter. Rapid Immunoassay revenue in 2017 increased
36% over 2016 to $165.1 million, as Sofia revenue grew 60% from the
prior year to $81.6 million. Specialized Diagnostics declined 14%
from 2016 to $52.0 million mostly due to a $6.5 million decrease in
grant revenue. Molecular Diagnostics revenue increased 43% to $13.6
million, led by 222% growth in Solana.
Gross Profit for the full year 2017 increased by $44.4 million
over 2016 to $156.1 million, due to increased sales volumes
associated with the acquired Triage and BNP Businesses and Rapid
Immunoassay products. Favorable product mix also contributed to the
increase. R&D expense for 2017 decreased by $5.0 million over
last year primarily due to decreased spending for our Savanna MDx
platform and clinical trials, which was offset by increased Triage
expenditures. Sales and Marketing expense increased by $16.8
million over prior year, primarily due to expenses associated with
the acquired Triage and BNP Businesses and the InflammaDry and
AdenoPlus diagnostic business from RPS Diagnostics. G&A
increased by $2.8 million in 2017, primarily due to higher
incentive compensation and costs associated with the acquired
Triage and BNP Businesses. Acquisition and Integration costs in
2017 were $16.5 million, primarily attributable to due diligence,
transaction and integration costs related to the acquisition of the
Triage and BNP Businesses.
For the year ended 2017, net loss was $8.2 million, or $(0.24)
per share, as compared to a net loss of $13.8 million, or $(0.42)
per share, for the year ended 2016. On a non-GAAP basis, net income
for the year ended 2017 was $37.5 million, or $1.07 per diluted
share, as compared to net income of $6.2 million, or $0.19 per
diluted share, for the year ended 2016.
Modification of Revenue Reporting Categories
Due to the acquisition of the Triage and BNP Businesses,
Quidel modified its presentation of revenue in the fourth
quarter of 2017. The revenues of the recently acquired Triage and
BNP Businesses will be reported within the Company's Cardiac
Immunoassay category. The QuickVue®, Sofia® and Eye Health
businesses will be reported within the Company's Rapid Immunoassay
category. The revenues of Solana®, AmpliVue® and Lyra® products
will be reported in the Company's Molecular Diagnostics
category. Quidel's Thyretain® and Diagnostic Hybrids, or
DHI, revenues and the Specialty Products Group, or SPG,
businesses as well as other revenues (including grant and royalty)
will be reported in the Company's Specialized Diagnostics
category.
Reclassification of Amortization of Intangible Assets
The Company recorded reclassifications of $5.1 million, $6.5
million and $1.7 million for the nine months ended September 30,
2017, twelve months ended December 31, 2016 and three months ended
December 31, 2016, respectively, from amortization of intangible
assets from acquired business and technology to cost of sales
expense as previously reported in the Consolidated Statements of
Operations. In addition, the Company recorded reclassifications of
$2.1 million, $2.6 million and $0.6 million for the nine months
ended September 30, 2017, twelve months ended December 31, 2016 and
three months ended December 31, 2016, respectively, from
amortization of intangible assets from acquired business and
technology to sales and marketing expense to conform to current
year presentation. These reclassifications did not affect the net
loss as previously reported or any prior amounts reported on the
Consolidated Balance Sheets, Statements of Cash Flows or Statements
of Comprehensive Loss.
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 earnings (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 earnings and adjusted
net earnings 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, although the Company's non-GAAP measures may not be
comparable to similarly titled measures used by other companies.
These non-GAAP measures presented in this press release are 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 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 699-4936.
A live webcast of the call can be accessed at
http://www.quidel.com, and the Web site 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 404-537-3406 for
international callers, and entering pass code 699-4936.
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 healthcare providers 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, hospital
and reference laboratories, and other alternate sites, like urgent
care centers and retail clinics, where healthcare is provided. 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 December 31,
2017 2016 Total revenues
$ 114,890 $ 52,808 Cost of sales 55,763
20,807
Gross profit 59,127
32,001
Research and development 10,674 7,508 Sales and marketing
26,373
12,048
General and administrative 8,709 6,387 Acquisition and integration
costs 9,484 143 Total operating
expenses 55,240
26,086
Operating income 3,887 5,915 Interest expense, net
(9,201 ) (3,141 ) (Loss) income before benefit for income
taxes (5,314 ) 2,774 (Benefit) provision for income taxes
(226 ) 4,724 Net loss $ (5,088 ) $ (1,950 )
Basic and diluted loss per share $ (0.15 ) $ (0.06 )
Weighted shares used in basic and diluted per share calculations
34,333 32,895 Gross profit as a % of total revenues 51 % 61
% Research and development as a % of total revenues 9 % 14 % Sales
and marketing as a % of total revenues 23 % 23 % General and
administrative as a % of total revenues 8 % 12 % Condensed
balance sheet data (in thousands):
12/31/2017
12/31/2016 Cash, cash equivalents and
restricted cash $ 36,086 $ 169,508 Accounts receivable, net 67,046
24,990 Inventories 67,078 26,045 Total assets 935,251 388,250
Long-term debt 381,110 148,319 Stockholders’ equity 227,104 200,630
Three months ended December 31, Consolidated net
revenues by product category are as follows (in thousands):
2017 2016 Rapid Immunoassay $
49,125 $ 36,492 Cardiac Immunoassay 47,030 — Specialized Diagnostic
Solutions 14,247 13,623 Molecular Diagnostic Solutions 4,488
$ 2,693 Total revenue $ 114,890 $ 52,808
QUIDEL CORPORATION CONSOLIDATED STATEMENTS
OF OPERATIONS
(In thousands, except per share data;
unaudited)
Twelve months ended December 31,
2017 2016 Total revenues
$ 277,743 $ 191,603 Cost of sales 121,601
79,872 Gross profit 156,142 111,731
Research and development 33,644 38,672 Sales and marketing
67,248 50,436 General and administrative 29,192 26,351 Acquisition
and integration costs 16,506 711 Total
operating expenses 146,590 116,170
Operating income (loss) 9,552 (4,439 ) Interest expense, net
(17,588 ) (11,760 ) Loss before taxes (8,036 ) (16,199 )
Provision (benefit) for income taxes 129
(2,391 ) Net loss $ (8,165 ) $ (13,808 ) Basic and diluted
loss per share $ (0.24 ) $ (0.42 ) Weighted shares used in
basic and diluted per share calculations 33,734 32,708 Gross
profit as a % of total revenues 56 % 58 % Research and development
as a % of total revenues 12 % 20 % Sales and marketing as a % of
total revenues 24 % 26 % General and administrative as a % of total
revenues 11 % 14 %
Twelve months ended December 31,
Consolidated net revenues by product category are as follows (in
thousands):
2017 2016
Rapid Immunoassay $ 165,099 $ 121,416 Cardiac Immunoassay 47,030 —
Specialized Diagnostic Solutions 51,978 60,681 Molecular Diagnostic
Solutions 13,636 9,506 Total revenue $
277,743 $ 191,603
QUIDEL CORPORATION
Reconciliation of Non-GAAP Financial
Information
(In thousands, except per share data;
unaudited)
Three Months Ended December 31,
Twelve Months Ended December 31, 2017
2016 2017 2016 (unaudited) (unaudited)
Net loss - GAAP $ (5,088 ) $ (1,950 ) $ (8,165 ) $ (13,808 ) Add:
Non-cash stock compensation expense 3,123 2,166 9,061 7,986
Amortization of intangibles 8,537 2,400 16,142 9,532 Amortization
of debt discount and issuance costs 1,893 1,353 6,022 5,375
Non-cash interest expense for deferred consideration 2,608 — 2,608
— Amortization of inventory step-up of fair value 10,950 — 10,950 —
Acquisition and integration costs 9,484 143 16,506 711 Income tax
impact of valuation allowance for deferred tax assets 1,535 3,835
5,799 4,687 Income tax impact of non-cash stock compensation
expense, amortization of intangibles, debt discount and issuance
costs, non-cash interest expense for deferred consideration,
acquisition and integration costs and amortization of inventory
step-up of fair value (12,811 ) (2,121 ) (21,451 ) (8,261 )
Adjusted net income $ 20,231 $ 5,826 $ 37,472
$ 6,222 Basic earnings per share: Net loss - GAAP $
(0.15 ) $ (0.06 ) $ (0.24 ) $ (0.42 ) Adjusted net earnings $ 0.59
$ 0.18 $ 1.11 $ 0.19 Diluted earnings per share: Net loss - GAAP $
(0.15 ) $ (0.06 ) $ (0.24 ) $ (0.42 ) Adjusted net earnings $ 0.56
$ 0.17 $ 1.07 $ 0.19 Shares used in basic per share
calculation 34,333 32,895 33,734 32,708 Shares used in diluted per
share calculation 36,299 34,385 35,141 33,500
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version on businesswire.com: http://www.businesswire.com/news/home/20180221006274/en/
Quidel Contact:Quidel CorporationRandy StewardChief Financial
Officer858.552.7931orMedia and Investors Contact:Quidel
CorporationRuben Argueta858.646.8023ruben.argueta@quidel.com
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