Quidel

News Release

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August 2, 2011 at 4:19 PM EDT

Quidel Reports Second Quarter 2011 Financial Results

SAN DIEGO, CA, Aug 02, 2011 (MARKETWIRE via COMTEX) -- Quidel Corporation (NASDAQ: QDEL), a leading provider of rapid diagnostic testing solutions and cellular-based virology assays, announced today financial results for the second quarter ended June 30, 2011.

Second Quarter 2011 Highlights:

--  Increased total revenues 10% to $27.5 million compared to $25.0
    million in the second quarter of 2010.
--  Expanded gross margin to 54.4% from 49.5% in the second quarter of
    2010.

Second Quarter 2011 Results

For the second quarter of 2011, total revenues increased to $27.5 million from $25.0 million in the second quarter of 2010, an increase of 10%.

Net loss for the second quarter of 2011 was $3.7 million, or $0.11 per share, compared to net loss of $2.5 million, or $0.09 per share, for the second quarter of 2010. On a non-GAAP basis, excluding non-recurring items, amortization of acquired intangibles and stock compensation expense, net loss for the second quarter of 2011 was $1.5 million, or $0.04 per share, compared to a net loss of $0.1 million, or $0.00 per share, for the same period of 2010.

"We are pleased with the double digit revenue growth in the quarter and the gross margin expansion we achieved as a result of product cost improvements. While most of the revenue growth came from strong end-user demand for our Strep A product line, we did see growth across most of our product offerings," said Douglas Bryant, president and CEO of Quidel Corporation. "More importantly, we made significant progress with our products in development, and have now submitted 510(k) packages to the FDA for our next-generation immunoassay instrument and for our first molecular assay."

Six months Ended June 30, 2011

Total revenues increased 63% to $87.1 million for the six-month period ended June 30, 2011 from $53.4 million for the same period in 2010. For the six-month period in 2011, net income increased to $7.8 million, or $0.24 per diluted share, compared to a net loss of $5.0 million, or $0.18 per share, for the same six-month period in 2010. On a non-GAAP basis, excluding non-recurring items, amortization of acquired intangibles and stock compensation expense, net income for the six months ended June 30, 2011 was $12.1 million, or $0.37 per diluted share, compared to a net loss of $0.2 million, or $0.01 per share for the first six months in 2010.

Non-GAAP Financial Information

The Company is providing non-GAAP financial information to reflect the effect of certain non-recurring items, amortization of acquired intangibles and stock compensation expense 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 (loss) and adjusted net earnings (loss) per share information for the periods presented because it believes this enables a better comparison of the Company's financial performance from period-to-period, and to that of its competitors. This presentation 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 today to discuss the second quarter results as well as other business matters 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 (800) 291-5365 or from outside the U.S. dial (617) 614-3922, and enter the passcode 54739540.

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 (888) 286-8010 from the U.S., or (617) 801-6888 for international callers, and entering passcode 41859922.

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 leading brand names QuickVue(R), D3(R) Direct Detection and Thyretain(TM), Quidel's products aid in the detection and diagnosis of many critical diseases and conditions, including 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 www.quidel.com and Diagnostic Hybrids at www.dhiusa.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, seasonality, the timing of onset, length and severity of cold and flu seasons, the level of success in executing on our strategic initiatives, our reliance on sales of our influenza diagnostic tests, uncertainty surrounding the detection of novel influenza viruses involving human specimens, our ability to develop new products and technology, adverse changes in the competitive and economic conditions in domestic and international markets, our reliance on and actions of our major distributors, technological changes and uncertainty with research and technology development, including any molecular-based technology, the medical reimbursement system currently in place and future changes to that system, manufacturing and production delays or difficulties, adverse actions or delays in product reviews by the U.S. Food and Drug Administration (the "FDA"), our ability to comply with FDA, environmental and other regulations, our ability to meet unexpected increases in demand for our products, our ability to execute our strategy, including the integration of new companies or technologies, disruptions in the global capital and credit markets, our ability to hire key personnel, intellectual property, product liability, environmental or other litigation, potential required patent license fee payments not currently reflected in our costs, adverse changes in our international markets, potential inadequacy of booked reserves and possible impairment of goodwill, and lower-than-anticipated acceptance, sales or market penetration of our new products. 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" 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 or update of the forward-looking statements, except as required by law.

                             QUIDEL CORPORATION
                   CONSOLIDATED STATEMENTS OF OPERATIONS
               AND RECONCILIATION OF NON-GAAP ADJUSTMENTS (1)
              (In thousands, except per share data; unaudited)


                     Three months ended             Three months ended
                       June 30, 2011                  June 30, 2010
               -----------------------------  -----------------------------
                        Adjust-        Non-            Adjust-        Non-
                 GAAP    ments         GAAP     GAAP    ments         GAAP
               -----------------------------  -----------------------------

Total revenues $27,509  $     -      $27,509  $25,026  $     -      $25,026

Cost of sales
 (excludes
 amortization
 of intangible
 assets)        12,540     (167)(2)   12,373   12,237     (171)(2)  $12,066
Amortization
 of inventory
 fair value
 adjustment
 from
 acquisition         -        -            -      399     (399)(3)        -
               -------  -------      -------  -------  -------      -------
Total cost of
 sales
 (excludes
 amortization
 of intangible
 assets)        12,540     (167)      12,373   12,636     (570)      12,066

Research and
 development     6,450     (238)(2)    6,212    6,349      (98)(2)    6,251
Sales and
 marketing       6,254      (43)(2)    6,211    6,272     (103)(2)    6,169
General and
 administrative  5,593   (1,466)(2)    4,127    4,792   (1,042)(2)    3,750
Amortization
 of intangible
 assets from
 acquired
 businesses      1,631   (1,631)(4)        -    1,467   (1,467)(4)        -
Amortization
 of intangible
 assets from
 licensed
 technology        144        -          144      324        -          324
Business
 acquisition
 and
 integration
 costs               -        -            -      716     (716)(5)        -
               -------  -------      -------  -------  -------      -------

Total costs
 and expenses   32,612   (3,545)      29,067   32,556   (3,996)      28,560
               -------  -------      -------  -------  -------      -------

Operating
 income (loss)  (5,103)   3,545       (1,558)  (7,530)   3,996       (3,534)

Interest
 expense          (499)       -         (499)    (611)       -         (611)
Interest
 income             57        -           57       11        -           11
               -------  -------      -------  -------  -------      -------

Total other
 expense          (442)       -         (442)    (600)       -         (600)
               -------  -------      -------  -------  -------      -------

Income (loss)
 before taxes   (5,545)   3,545       (2,000)  (8,130)   3,996       (4,134)

Income tax
 expense
 (benefit)      (1,885)   1,347 (6)     (538)  (5,663)   1,598 (6)   (4,065)
               -------  -------      -------  -------  -------      -------

Net income
 (loss)        $(3,660) $ 2,198      $(1,462) $(2,467) $ 2,398      $   (69)
               =======  =======      =======  =======  =======      =======

Basic earnings
 (loss) per
 share:        $ (0.11)              $ (0.04) $ (0.09)              $ (0.00)
Diluted
 earnings
 (loss) per
 share:        $ (0.11)              $ (0.04) $ (0.09)              $ (0.00)

Weighted
 shares used
 in basic per
 share
 calculation    32,900                32,900   28,406                28,406
Weighted
 shares used
 in diluted
 per share
 calculation    32,900                32,900   28,406                28,406

Gross profit
 as a % of
 total
 revenues           54%                   55%      50%                   52%
Research and
 development
 as a % of
 total
 revenues           23%                   23%      25%                   25%
Sales and
 marketing as
 a % of total
 revenues           23%                   23%      25%                   25%
General and
 administrative
 as a % of
 total
 revenues           20%                   15%      19%                   15%

(1) The Company reports Non-GAAP
results which primarily excludes
certain acquisition related costs
and stock-based compensation to
provide a supplemental comparison of
the results of operations.
(2) Add back stock-based
compensation
(3) Add back amortization of
inventory fair value adjustment from
acquisition
(4) Add back amortization of
acquired intangibles
(5) Add back business acquisition
and integration costs
(6) The Company's marginal tax rate
of approximately 38% and 40% for the
three months ended June 30, 2011 and
2010, respectively, has been applied
to the Non-GAAP adjustments.

Condensed
 balance sheet
 data (in
 thousands):    6/30/11  12/31/10
               --------  --------

Cash and cash
 equivalents   $ 65,296  $  6,788
Accounts
 receivables     10,870    13,477
Inventory        15,236    17,707
Total assets    254,258   214,593
Long term debt   49,508    79,774
Stockholders'
 equity         181,522   112,521


                             QUIDEL CORPORATION
                   CONSOLIDATED STATEMENTS OF OPERATIONS
               AND RECONCILIATION OF NON-GAAP ADJUSTMENTS (1)
              (In thousands, except per share data; unaudited)


                      Six months ended               Six months ended
                       June 30, 2011                  June 30, 2010
               -----------------------------  -----------------------------
                        Adjust-        Non-            Adjust-        Non-
                 GAAP    ments         GAAP     GAAP    ments         GAAP
               -----------------------------  -----------------------------

Total revenues $87,104  $     -      $87,104  $ 53,405 $     -      $53,405

Cost of sales
 (excludes
 amortization
 of intangible
 assets)        32,583     (302)(2)   32,281    24,871    (305)(2)  $24,566
Amortization
 of inventory
 fair value
 adjustment
 from
 acquisition         -        -            -     1,118  (1,118)(3)        -
               -------  -------      -------  -------- -------      -------
Total cost of
 sales
 (excludes
 amortization
 of intangible
 assets)        32,583     (302)      32,281    25,989  (1,423)      24,566

Research and
 development    14,264     (405)(2)   13,859    12,624    (248)(2)   12,376
Sales and
 marketing      12,509      (97)(2)   12,412    12,271    (206)(2)   12,065
General and
 administrative 11,352   (2,881)(2)    8,471     9,033  (1,866)(2)    7,167
Amortization
 of intangible
 assets from
 acquired
 businesses      3,263   (3,263)(4)        -     2,119  (2,119)(4)        -
Amortization
 of intangible
 assets from
 licensed
 technology        288        -          288       648       -          648
Business
 acquisition
 and
 integration
 costs               -        -            -     2,066  (2,066)(5)        -
               -------  -------      -------  -------- -------      -------

Total costs
 and expenses   74,259   (6,948)      67,311    64,750  (7,928)      56,822
               -------  -------      -------  -------- -------      -------

Operating
 income (loss)  12,845    6,948       19,793   (11,345)  7,928       (3,417)

Interest
 expense        (1,154)       -       (1,154)   (1,010)      -       (1,010)
Interest
 income            109        -          109       180       -          180
               -------  -------      -------  -------- -------      -------

Total other
 expense        (1,045)       -       (1,045)     (830)      -         (830)
               -------  -------      -------  -------- -------      -------

Income (loss)
 before taxes   11,800    6,948       18,748   (12,175)  7,928       (4,247)

Income tax
 expense
 (benefit)       4,012    2,640 (6)    6,652    (7,191)  3,171 (6)   (4,020)
               -------  -------      -------  -------- -------      -------

Net income
 (loss)        $ 7,788  $ 4,308      $12,096  $ (4,984)$ 4,757      $  (227)
               =======  =======      =======  ======== =======      =======

Basic earnings
 (loss) per
 share:        $  0.24               $  0.37  $  (0.18)             $ (0.01)
Diluted
 earnings
 (loss) per
 share:        $  0.24               $  0.37  $  (0.18)             $ (0.01)

Weighted
 shares used
 in basic per
 share
 calculation    32,675                32,675    28,457               28,457
Weighted
 shares used
 in diluted
 per share
 calculation    33,110                33,110    28,457               28,457

Gross profit
 as a % of
 total
 revenues           63%                   63%       51%                  54%
Research and
 development
 as a % of
 total
 revenues           16%                   16%       24%                  23%
Sales and
 marketing as
 a % of total
 revenues           14%                   14%       23%                  23%
General and
 administrative
 as a % of
 total
 revenues           13%                   10%       17%                  13%

(1) The Company reports Non-GAAP
results which primarily excludes
certain acquisition related costs and
stock-based compensation to provide a
supplemental comparison of the
results of operations.
(2) Add back stock-based compensation
(3) Add back amortization of
inventory fair value adjustment from
acquisition
(4) Add back amortization of acquired
intangibles
(5) Add back business acquisition and
integration costs
(6) The Company's marginal tax rate
of approximately 38% and 40% for the
six months ended June 30, 2011 and
2010, respectively, has been applied
to the Non-GAAP adjustments.


Quidel Contact:
Quidel Corporation
John M. Radak
Chief Financial Officer
(858) 646-8032

Media and Investors Contact:
Quidel Corporation
Ruben Argueta
(858) 646-8023

SOURCE: Quidel Corporation