Quidel

News Release

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February 17, 2000 at 12:00 AM EST

Quidel Reports Financial Results for the Three and Nine Months Ended December 31, 1999 - New Fiscal Year End

SAN DIEGO, Feb. 17 /PRNewswire/ -- Quidel Corporation (Nasdaq: QDEL) announced today its financial results for the quarter ended December 31, 1999. The net income for the quarter was $397,000, or $.02 per share, on net sales of $16.8 million, compared to a net income of $946,000, or $.04 per share, on net sales of $13.7 million, for the quarter ended December 31, 1998. As previously announced, the company's quarterly results in 1999 were impacted by investment decisions made to set the stage for expected growth in the coming years. These changes included the market launch of the QuickVue(R) Influenza Test, the acquisition of a urinalysis business from Dade Behring, and the increase in staffing associated with the ramp up of production to a 24 hour, 7 days per week shift operation to meet increased product demand. In addition, the company incurred a one-time mortgage prepayment penalty of approximately $900,000 associated with the sale and leaseback of its corporate facility during the quarter.

"As previously announced, Quidel has changed its fiscal year-end to a calendar year-end. As a result, we are reporting actual operating data for the nine-month period ended December 31, 1999 and 1998, as well as proforma operating data for the twelve-month period ended December 31, 1999 and 1998," said Andre de Bruin, Vice Chairman, President and CEO. "We look forward to seeing the returns of our investments made during 1999 in the upcoming years, and we believe these decisions will increase our competitive position in the point-of-care diagnostics market."

"We expanded our manufacturing capabilities to respond to increased demand for our products. Moving to a 7/24 operation was the most efficient route available to us, and we moved quickly to build capacity for this opportunity," de Bruin added.

For the nine months ended December 31, 1999, the company incurred a net loss of $1,536,000, or $.06 per share, on net sales of $38.9 million, compared to a net income of $248,000, or $.01 per share, on net sales of $33.9 million, for the same period in 1998. In addition to the items addressed above for the current quarter of 1999, the company also had a one-time charge of $820,000 during the quarter ended September 30, 1999, related to the write off of acquired in-process research and development as a part of the acquisition of Metra Biosystems, Inc.

Income before taxes was $1.3 million for both the three months ended December 31, 1999 and 1998. The company incurred a loss before taxes for the nine months ended December 31, 1999 of $645,000 compared to an income before taxes of $556,000 for the nine months ended December 31, 1998.

Quidel Corporation discovers, develops, manufactures and markets point-of-care, rapid diagnostic tests for detection of medical conditions and illnesses. These products provide accurate, rapid and cost-effective diagnostic information for acute and chronic conditions that affect women's health throughout the phases of their lives including reproductive status, pregnancy management and osteoporosis. Quidel also provides point-of-care diagnostics for infectious diseases, including influenza A and B, strep throat, H. pylori infection, chlamydia and infectious mononucleosis. Quidel's products are sold to healthcare professionals for use in physician's offices, clinical laboratories and pharmacies, and to consumers through organizations that provide private label, store brand products. These tests provide diagnostic information to enable rapid treatment and improve health outcomes, lower costs, and increase patient satisfaction.

This press release contains forward-looking statements regarding Quidel's future activities within the meaning of the federal securities laws. These forward-looking statements involve material risks and uncertainties. Many possible factors could affect the future results and performance of Quidel's products, such that actual results and performance may differ materially. If Quidel's products fail to perform as expected, or if there is lower consumer demand for these products than expected, Quidel's financial condition and operating results may be materially and adversely affected. Quidel's financial condition and operating results may also be materially and adversely affected by a number of other factors, including, without limitation, seasonality, adverse changes in competitive and economic conditions, actions by the Company's distributors, manufacturing and production delays or difficulties and adverse actions or delays in product reviews by the FDA. Please see the discussion of these and other factors in Quidel's annual reports on Form 10-K and subsequent quarterly reports on Form 10-Q. For more information, please visit Quidel's web site at http://www.quidel.com.

                                Quidel Corporation
                 Condensed Consolidated Statements of Operations
                      (in thousands, except per share data)

                              Three months ended          Nine months ended
                                 December 31,               December 31,
                             1999          1998         1999           1998
                        (unaudited)    (unaudited)               (unaudited)

    Net sales              $16,750       $13,746      $38,934       $33,893
    Research contracts,
     license fees
     and royalties           1,716         1,181        3,307         3,325

       Total revenues       18,466        14,927       42,241        37,218

    Operating expenses
     Cost of sales           8,150         7,970       19,959        19,006
     Sales and marketing     5,215         2,330       11,555         6,866
     Research and
      development            1,679         1,902        5,636         6,016
     General and
      administrative         1,951         1,550        4,725         4,553
     Write down and closure
      of subsidiaries            0             0            0           440
     Acquired in-process
      research and development   0             0          820             0

       Total operating
        expenses            16,995        13,752       42,695        36,881

    Operating income         1,471         1,175         (454)          337

    Other income (expense)    (183)           79         (191)          219

    Income (loss) before
     benefit (provision)
     for taxes and
     extraordinary item      1,288         1,254         (645)          556

    Benefit (provision)
     for income taxes            0          (308)           0          (308)

    Income (loss) before
     extraordinary item      1,288           946         (645)          248

    Extraordinary item:
     Early extinguishments
     of debt                  (891)            0         (891)            0

    Net income (loss)         $397          $946      ($1,536)         $248


    Basic and diluted
     earnings per share
     on income (loss) before
     extraordinary item      $0.05         $0.04       ($0.03)        $0.01

    Basic and diluted
     earnings per share for
     extraordinary item     ($0.03)        $0.00       ($0.03)        $0.00

    Basic and diluted
     earnings per share      $0.02         $0.04       ($0.06)        $0.01

    Shares used in basic
     earnings per share     23,895        23,788       23,853        23,780
    Shares used in diluted
     earnings per share     25,392        23,796       24,435        23,800

    Gross profit as a
     percent of net sales    51.3%         42.0%        48.7%         43.9%
    Sales and marketing as
     a percent of net sales  31.1%         17.0%        29.7%         20.3%
    Research and
     development as a
     percent of net sales    10.0%         13.8%        14.5%         17.7%
    General and
     administrative as a
     percent of net sales    11.6%         11.3%        12.1%         13.4%

    Earnings (loss) before
     interest, taxes,
     depreciation and
     amortization (EBITDA)  $2,746        $2,130       $2,740        $2,883

    Basic and diluted
     EBITDA per share        $0.11         $0.09        $0.11         $0.12



    Balance Sheet Data:   12/31/99       3/31/99

     Cash and Cash
      Equivalents           $4,672        $6,622
     Working Capital        12,483        16,547
     Total Assets           68,040        52,606
     Stockholders' Equity   43,755        44,706


                                Quidel Corporation
                 Condensed Consolidated Statements of Operations
                      (in thousands, except per share data)
                                   (unaudited)

                            Three months ended      Pro Forma twelve months*
                                 December 31,           ended December 31,
                             1999          1998         1999           1998

    Net sales              $16,750       $13,746      $52,204       $47,166
    Research contracts,
     license fees
     and royalties           1,716         1,181        4,315         4,733

       Total revenues       18,466        14,927       56,519        51,899

    Operating expenses
     Cost of sales           8,150         7,970       27,059        26,438
     Sales and marketing     5,215         2,330       14,390         9,858
     Research and
      development            1,679         1,902        7,562         8,284
     General and
      administrative         1,951         1,550        6,287         6,292
     Write down and closure
      of subsidiaries            0             0            0         3,498
     Acquired in-process
      research and development   0             0          820             0

       Total operating
        expenses            16,995        13,752       56,118        54,370

    Operating income         1,471         1,175          401        (2,471)

    Other income (expense)    (183)           79         (208)          238

    Income (loss) before
     benefit (provision)
     for taxes and
     extraordinary item      1,288         1,254          193        (2,233)

    Benefit (provision)
     for income taxes            0          (308)       6,575         2,374

    Income (loss) before
     extraordinary item      1,288           946        6,768           141

    Extraordinary item:
     Early extinguishments
     of debt                  (891)            0         (891)            0

    Net income (loss)         $397          $946       $5,877          $141


    Basic and diluted
     earnings per share
     on income (loss) before
     extraordinary item      $0.05         $0.04        $0.28         $0.01

    Basic and diluted
     earnings per
     share for
     extraordinary item     ($0.03)        $0.00       ($0.03)        $0.00


    Basic and diluted
     earnings per share      $0.02         $0.04        $0.25         $0.01

    Shares used in basic
     earnings per share     23,895        23,788       23,841        23,768
    Shares used in diluted
     earnings per share     25,392        23,796       24,167        23,794

    Gross profit as a
     percent of net sales    51.3%         42.0%        48.2%         43.9%
    Sales and marketing as
     a percent of net sales  31.1%         17.0%        27.6%         20.9%
    Research and development
     as a percent of
     net sales               10.0%         13.8%        14.5%         17.6%
    General and
     administrative as
     a percent of
     net sales               11.6%         11.3%        12.0%         13.3%

    Earnings (loss) before
     interest, taxes,
     depreciation and
     amortization (EBITDA)  $2,746        $2,130       $4,392          $693

    Basic and diluted
     EBITDA per share        $0.11         $0.09        $0.18         $0.03



    Balance Sheet Data:   12/31/99      12/31/98

     Cash and Cash
      Equivalents           $4,672        $6,012
     Working Capital        12,483        15,495
     Total Assets           68,040        46,091
     Stockholders' Equity   43,755        37,221


        *  Proforma information is presented to conform to the company's new
    fiscal year.

SOURCE  Quidel Corporation

CONTACT:
Charles J. Cashion, Chief Financial Officer, 858-552-7962,
or Margaret Kuhn, Director, Investor Relations, 858-646-8031,
both of Quidel Corporation