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Quidel Meets Consensus Pre-Tax EPS on Record Second Quarter Revenues
Total revenues for the second quarter of 2002 were $17.8 million, up 11% compared with total revenues of $16.0 million for the second quarter of 2001, reflecting broad gains across the Company's product lines.
On a pre-tax basis, earnings for the second quarter 2002 were $0.5 million, or $0.02 per share, on a fully diluted basis, compared with a pre-tax loss of $0.8 million, or $0.03 per share, in the second quarter of 2001. On a net basis, earnings for the second quarter of 2002 were $0.3 million, or $0.01 per share, on a fully diluted basis, compared with a net loss of $0.9 million, or a $0.03 per share, in the second quarter of 2001. These results mark the seventh consecutive quarter that Quidel has met or exceeded the published consensus earnings estimate, which is $0.02 per share on a pre-tax basis, and $0.01 per share on an after-tax basis.
Gross margin on net sales for the second quarter of 2002 was 47%, essentially equal with the second quarter of 2001. Total operating expenses for the second quarter of 2002 were $7.9 million, or 45% of total revenues, compared with $8.5 million, or 53% of total revenues, for the second quarter of 2001, primarily due to the discontinuation of goodwill amortization.
"Our second quarter results reflect our continued focus on improving all aspects of Quidel's operations in order to support continued growth in sales and profitability," said S. Wayne Kay, president and chief executive officer. "In addition to solid revenue gains, we are bringing new products to market, making strong R&D progress and continuing to focus on manufacturing efficiencies, while maintaining prudent cost controls across the Company," said Kay.
The Company made headway in its efforts to penetrate the global POC market with the successful launch of the QuickVue(R) Influenza test in Japan, where we achieved an approximate 25% share of the world's second largest market for flu products. Through its distribution partner Sumitomo Seiyaku Biomedical, the Company also plans to introduce the QuickVue(R) Dipstick Strep A product into the Japanese market later this year, pending Japanese government registration approval.
Subsequent to quarter's end, Quidel announced the launch of two products under the QuickVue(R) Advance brand in the area of women's health, during the American Association for Clinical Chemistry's (AACC's) Clinical Lab Exposition in Orlando, Florida, which is the world's largest dedicated exhibition of equipment, instruments, diagnostics tests and services for clinical laboratories. Two of the tests, the QuickVue(R) Advance pH and Amines test and the QuickVue(R) Advance G. vaginalis test, are designed to aid in the clinical evaluation of infectious vaginitis, a medical condition which includes bacterial vaginosis, trichomoniasis and candidiasis. Infectious vaginitis accounts for 10 million physician office visits each year in the United States alone. It is the number one reason women visit their gynecologists. Both of these tests utilize Quidel's proprietary LTF(TM) (Layered Thin Film) technology platform.
Yesterday at AACC, the Company announced the introduction of a new urinalysis instrument system, the UrinQuick(TM) Urine Chemistry Analyzer system, for automating the reading of Quidel's QuickVue(R) UrineCheck(TM) test strips. This is an important analytical tool for assessing urine samples in bulk, which will aid healthcare practitioners in making diagnoses more quickly and cost effectively. The instrument has newly patented transport and optics systems, is extremely user friendly and includes a full on-board quality control program. The introduction of the UrinQuick(TM) Urine Chemistry Analyzer furthers the Company's competitive position in a $430 million global urinalysis market with strong margin potential. Quidel has selected Allegiance Healthcare as the exclusive U.S. distribution partner for the UrinQuick(TM) Urine Chemistry Analyzer product for the U.S. acute-care setting.
Also at the AACC, the Company announced the U.S. launch of its QUS-2(R) Calcaneal Ultrasonometer, a state-of-the-art instrument that is used as an aid in the diagnosis of osteoporosis and the determination of risk of subsequent atraumatic fracture. The QUS-2 is one of the most precise, easy to operate and easily transportable instruments for assessing bone density available on the market. The addition of the QUS-2 further expands the Company's popular QuickVue(R) line of high-quality, easy-to-use, point-of-care diagnostic products.
2003 Financial Guidance
Building upon financial and operating momentum established during 2002, Quidel currently expects 2003 total revenues to be in the mid $90 million range, representing an increase in the mid teens, versus this year's revenue guidance, which is in the low $80 million range.
Quidel currently expects to report 2003 pre-tax EPS, on a fully diluted basis, to be in the mid 30 cent range, up approximately 50% compared with Company guidance for 2002 pre-tax EPS, on a fully diluted basis, of at least 20 cents. On an after-tax basis, assuming a 40-41% tax rate, Quidel is currently projecting 2003 net income of approximately $0.22-$0.23 per share, on a fully diluted basis.
Conference Call Information
Quidel management will host a conference call to discuss second quarter results today, July 31, 2002 beginning at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). To participate via telephone, please call 800/283-1693 from the U.S., or 703/736-7227 for international callers. A telephone replay will be available for two days by dialing 888/266-2081 from the U.S., or 703/925-2533 for international callers, and entering reservation number 6097040. The conference call will be broadcast live over the Internet at www.quidel.com . A replay also will be available on Quidel's Web site for 14 days.
Quidel Corporation, a worldwide company helping women and their families live healthy lives, discovers, develops, manufactures and markets rapid point-of-care diagnostic tests for detection of medical conditions and illnesses. These products provide accurate, rapid and cost-effective diagnostic information for acute and chronic conditions associated with women's health in areas such as reproduction and diseases of the elderly. Quidel also provides point-of-care diagnostics for infectious diseases, including influenza A and B, Strep throat, H. pylori infection, chlamydia, infectious mononucleosis and infectious vaginitis. Quidel's products are sold to healthcare professionals for use in physician offices, clinical laboratories and pharmacies, and to consumers through organizations that provide private label, store brand products. These tests provide diagnostic information that enables rapid treatment and improves health outcomes, lowers costs and increases patient satisfaction. For more information, please visit Quidel's Web site at http://www.quidel.com .
This press release contains forward-looking statements within the meaning of the federal securities laws that involve material risk 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. As such, no forward-looking statement can be guaranteed. Differences in operating results may arise as a result of a number of factors including, without limitation, seasonality, adverse changes in the competitive and economic conditions in domestic and international markets, actions of our major distributors, manufacturing and production delays or difficulties, adverse actions or delays in product reviews by the FDA and the lower acceptance of our new products than forecast. Forward-looking statements typically are identified by the use of terms such as "may," "will," "should," "might," "expect," "anticipate," "estimate" and similar words, although some forward-looking statements are expressed differently. The risks described under "Risk Factors" and in other sections of our Form 10-K for year ended December 31, 2001, and in other reports and registration statements that we file with the Securities and Exchange Commission 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 presentation. We undertake no obligation to publicly release the results of any revision of the forward-looking statements.
QUIDEL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three months ended Six months ended June 30 June 30 2002 2001 2002 2001 (unaudited) Net sales $17,361 $15,524 $38,127 $35,068 Research contract, license and royalty income 428 468 874 866 Total revenues 17,789 15,992 39,001 35,934 Cost of sales 9,149 8,184 19,130 17,178 Research and development 1,544 1,751 3,103 3,343 Sales and marketing 3,767 3,289 7,805 7,391 General and administrative 2,152 2,402 4,444 4,623 Restructuring -- -- -- 550 Amortization of intangibles 486 1,044 977 2,088 Total costs and expenses 17,098 16,670 35,459 35,173 Earnings (loss) from operations 691 (678) 3,542 761 Interest expense 239 345 484 682 Interest income (4) (30) (6) (41) Other, net (61) (195) (165) (184) Total other expense 174 120 313 457 Earnings (loss) before income taxes 517 (798) 3,229 304 Income tax expense 212 68 1,315 753 Net earnings (loss) $305 $(866) $1,914 $(449) Earnings (loss) per share before income taxes - basic and diluted $0.02 $(0.03) $0.11 $0.01 Net earnings (loss) per share - basic $0.01 $(0.03) $0.07 $(0.02) Net earnings (loss) per share - diluted $0.01 $(0.03) $0.06 $(0.02) Weighted shares used in basic per share calculation 28,800 28,177 28,777 28,151 Weighted shares used in diluted per share calculation 29,978 28,978 30,059 28,952 Gross profit as a % of net sales 47% 47% 50% 51% Research and development as a % of net sales 9% 11% 8% 10% Sales and marketing as a % of net sales 22% 21% 20% 21% General and administrative as a % of net sales 12% 15% 12% 13% Condensed balance sheet data (in thousands): 6/30/02 12/31/01 (unaudited) (audited) Cash and cash equivalents $6,738 $3,396 Working capital 22,504 17,790 Total assets 80,158 82,393 Long term obligations 10,429 10,654 Stockholders' equity 63,445 60,409
Bruce Voss, or Ina McGuinness, both of Lippert/Heilshorn
& Associates, +1-310-691-7100, for Quidel Corporation; or Paul E. Landers,
Vice President & CFO of Quidel Corporation, +1-858-552-7962