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Quidel Reports First Quarter Financial Results
SAN DIEGO--(BUSINESS WIRE)--April 28, 2004--Quidel Corporation (Nasdaq:QDEL), a leading provider of point-of-care (POC) rapid diagnostic tests, today reported financial results for the quarter ended March 31, 2004.
Total revenues for the first quarter of 2004 were $19.7 million, compared with total revenues of $24.4 million for the first quarter of 2003. As reported by the Company on April 7, 2004, increases in sales of approximately 37% for Quidel's Influenza test in the U.S. and an aggregate 12% increase in sales for Quidel's other rapid immunoassay point-of-care products in the U.S. were offset by a decline of approximately 73% in influenza test sales in Japan, and a decrease of approximately 37% in domestic Strep A test sales, compared with the first quarter 2003.
Net income for the first quarter of 2004 was $0.3 million, or $0.01 per share on a diluted basis, compared with net income of $1.7 million, or $0.06 per share on a diluted basis, for the first quarter of 2003.
Gross margin for the 2004 first quarter was 51%, compared with gross margin of 54% for the first quarter of 2003. The lower gross margin was due primarily to lower sales of Strep A and influenza tests and a less favorable product mix, primarily resulting from declines in Quidel's higher-margin influenza products.
Operating expenses for the first quarter of 2004 were $9.6 million, compared with $10.3 million for the first quarter of 2003. The decrease was primarily attributable to savings resulting from the Company's restructuring activities in 2003, including closure of the Company's sales offices in Germany and Italy as the Company successfully transitioned to a third-party distributor model in those markets, and lower professional fees, both of which were partially offset by increased litigation costs related to the intellectual property litigation against Inverness Medical Innovations, Inc. and its affiliated companies.
The Company reported cash and cash equivalents of $38.9 million at March 31, 2004, compared with cash and cash equivalents of $25.6 million at December 31, 2003.
"While our first quarter financial results were adversely impacted by an unexpected and abrupt decline in sales of upper respiratory products across the industry, we believe our flu products gained U.S. market share and our Strep A maintained market share during the quarter," said S. Wayne Kay, Quidel's president and chief executive officer. "The 2003-04 cold and flu season in the U.S. was atypically early with strong usage of our upper respiratory products -- in particular our flu test -- during the fourth quarter of 2003. Further, unlike previous flu season patterns, we did not experience the typical influenza outbreak and testing in the U.S. or Japan through March.
"Indeed, comparing the entire 2003-2004 flu season with the prior six month season, sales of our QuickVue(R) Influenza test in the U.S. increased nearly three-fold to $14.2 million, while worldwide sales of our influenza tests were up about 47% to $24.9 million. As of December 31, 2003 our domestic market share for rapid, point-of-care cold-and-flu season tests was 49% for influenza and 43% for Strep A," he added.
Also this quarter, Quidel's new QuickVue(R) Influenza test A+B, which aids in the differential diagnosis of acute Influenza type A and B, was granted a CLIA waiver from the U.S. Food and Drug Administration. This product's introduction presents an opportunity for further penetration of the acute care market, a segment that affords a significant expansion opportunity for the Company on a worldwide basis.
Quidel Reiterates Full Year Financial Guidance Provided on April 7, 2004
As previously announced, assuming the 2004-05 cold-and-flu season reflects typical global product demand patterns, Quidel expects 2004 total revenues of $100 million to $105 million, and 2004 earnings per share on a diluted basis of $0.23 to $0.25. Quidel advises that the unpredictable severity and timing of the cold-and-flu season could have a material impact, positive or negative, on the Company's revenues and earnings each quarter and year.
Conference Call Information
Quidel management will host a conference call to discuss first quarter financial results today, beginning at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). To participate in the call by telephone, please dial 888-803-7396 from the U.S., or 706-634-1052 for international callers. To listen to the conference call via the Internet live or for the next 14 days, as well as to view the first quarter 2004 conference call remarks, go to http://www.quidel.com/InvestorInfo.php. A telephone replay will be available for 48 hours by dialing 800-642-1687 from the U.S., or 706-645-9291 for international callers, and entering reservation 5211939.
Quidel Corporation, a worldwide company helping women and their families live healthy lives, discovers, develops, manufactures and markets point-of-care (POC) 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 associated with women's health in areas such as reproduction, upper respiratory infections and other clinical conditions. Quidel provides a broad line of POC diagnostics for pregnancy and infectious diseases, including influenza A and B, Strep throat, pregnancy, H. pylori infection, chlamydia, infectious mononucleosis and infectious vaginitis. Quidel's products are sold to healthcare professionals for use in physician offices and clinical laboratories, and to consumers through several distribution partners. For more information, please visit www.quidel.com.
This press release contains forward-looking statements within the meaning of the federal securities laws that involve material risks and uncertainties. Many possible events or factors could affect Quidel's future financial results and performance, such that its 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 U.S. Food and Drug Administration, intellectual property, product liability, environmental or other litigation, 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. All of the risks described in reports and registration statements that we file with 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. We undertake no obligation to publicly release the results of any revision of the forward-looking statements.
QUIDEL CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share data) Three months ended March 31, 2004 2003 ----------------- (unaudited) Net sales $19,133 $23,926 Research contract, license and royalty income 603 469 -------- -------- Total revenues 19,736 24,395 Cost of sales 9,401 11,125 Research and development 2,497 2,443 Sales and marketing 3,772 4,534 General and administrative 2,811 2,799 Amortization of intangibles 518 503 -------- -------- Total costs and expenses 18,999 21,404 -------- -------- Earnings from operations 737 2,991 Interest expense 225 228 Interest income (81) (7) Other, net 97 (49) -------- -------- Total other (income) expense 241 172 -------- -------- Earnings before income taxes 496 2,819 Income tax expense 204 1,129 -------- -------- Net earnings $292 $1,690 Net earnings per share - basic and diluted $0.01 $0.06 ======== ======== Weighted shares used in basic per share calculation 30,939 28,902 ======== ======== Weighted shares used in diluted per share calculation 32,671 28,987 ======== ======== Gross profit as a % of net sales 51% 54% Research and development as a % of net sales 13% 10% Sales and marketing as a % of net sales 20% 19% General and administrative as a % of net sales 15% 12% Condensed balance sheet data (in thousands): 3/31/04 12/31/03 ----------- --------- (unaudited) (audited) Cash and cash equivalents $38,883 $25,627 Working capital 55,445 49,528 Total assets 117,813 117,425 Long term obligations 11,200 11,258 Stockholders' equity 95,195 89,779
CONTACT: Quidel Corporation
Paul E. Landers, 858-552-7962
Lippert/Heilshorn & Associates
Ina McGuinness/Bruce Voss, 310-691-7100
SOURCE: Quidel Corporation