Quidel

News Release

Printer Friendly Version View printer-friendly version << Back
October 30, 2002 at 4:14 PM EST

Quidel Reports Third Quarter Financial Results

SAN DIEGO, Oct 30, 2002 (BUSINESS WIRE) -- Quidel Corporation (NASDAQ:QDEL), a leading provider of rapid point-of-care (POC) diagnostic tests, today reported financial results for the three and nine months ended September 30, 2002.

Total revenues for the third quarter of 2002 were $14.5 million, compared with $16.6 million for the third quarter of 2001. As previously announced, the shortfall in expected revenues was primarily due to certain U.S. distributors not making expected quarter-end purchases and to changes in distributors' inventory management practices.

On a pre-tax basis, the loss for the third quarter of 2002 was $2.0 million, or $0.07 per share, compared with pre-tax earnings of $0.4 million, or $0.01 per share, in the third quarter of 2001. On a net basis, the loss for the 2002 third quarter was $1.2 million, or $0.04 per share, compared with a net loss of $0.1 million, or $0.00 per share, in the third quarter of 2001. These results are within the range of third quarter guidance provided by Quidel on October 3, 2002.

Gross margin on net sales for the third quarter of 2002 was 44%, compared with a gross margin of 50% in the third quarter of 2001, primarily influenced by lower revenues. Operating expenses for the third quarter of 2002 totaled $8.5 million, or 60% of net sales, compared with $7.9 million, or 49% of net sales, for the third quarter of 2001.

S. Wayne Kay, Quidel's president and chief executive officer, stated, "Actions by certain of our distributors late in the third quarter had an unexpected impact on our reported financial results, although we believe end-user demand for our product lines in the U.S. and overseas remains strong."

Mr. Kay added, "In the brief period since we updated third quarter financial guidance, we have begun an initiative to move to a demand tracking system that will provide greater visibility into distributor demand requirements. We believe this system will improve the predictability of sales, allow for a more even ordering pattern throughout each quarter and enhance service levels with distributors. We anticipate this process will be in place with some or our key distributors in 2003.

"Our strategy remains on track for delivering long-term sales growth and margin improvement by growing revenues overseas and in the U.S.," said Mr. Kay. "In the near term, we look forward to continued robust demand in Japan for our RapidVue(R) Influenza test where our distribution partner is currently anticipating significant growth compared with last year. Quidel's product is one of the earliest influenza diagnostic tests for use in the physician office available in Japan. We also look forward to our first season of selling our QuickVue(R) Dipstick Strep A test in Japan," commented Mr. Kay.

In the U.S., Quidel will continue to grow sales of the QuickVue(R) Influenza test in physician offices and alternate-care sites, and will enter into the hospital acute care market in the fourth quarter of 2002.

Quidel expects to make gains in penetrating the urinalysis testing market and expanding its QuickVue(R) brand with initial shipments in the fourth quarter of 2002 of the UrinQuick(TM) Urine Chemistry Analyzer in the U.S. Also, Quidel is continuing to automate manufacturing of the lateral flow product line, while making progress in bringing to market additional products utilizing its proprietary LTF(TM) (Layered Thin Film) technology platform.

Year-to-Date Financial Results

Total revenues for the nine months ended September 30, 2002 were $53.5 million, up slightly from $52.5 million for the nine months ended September 30, 2001. On a pre-tax basis, earnings for the nine months ended September 30, 2002 were $1.2 million, or $0.04 per share, compared with pre-tax earnings of $0.7 million, or $0.02 per share, for the nine months ended September 30, 2001. Gross margin on net sales for the nine months ended September 30, 2002 was 48%, compared with 51% for the nine months ended September 30, 2001. On a net basis, current year-to-date earnings were $0.7 million, or $0.02 per share, on a fully diluted basis, compared with a net loss of $0.5 million, or $0.02 per share, on a fully diluted basis, for the nine months ended September 30, 2001.

Financial Guidance for Fourth Quarter

Quidel currently expects fourth quarter 2002 total revenues to be approximately $21.0-$22.0 million. Quidel expects to report fourth quarter 2002 pre-tax EPS in the range of $0.03 to $0.07 per share, on a fully diluted basis, and after-taxes, assuming a 41% tax rate, earnings in the range of $0.02 to $0.04 per share, on a fully diluted basis.

Conference Call Information

Quidel management will host a conference call to discuss third quarter results today, October 30, 2002, beginning at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). To participate via telephone, please call 888/803-7396 from the U.S., or 706/634-1052 for international callers. A telephone replay will be available for two days by dialing 800/642-1687 from the U.S., or 706/645-9291 for international callers, and entering reservation number 6000865. 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.

About Quidel

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  Nine months ended
                                    September 30       September 30
                                    2002      2001     2002     2001
                                               (unaudited)
Net sales                         $14,126   $16,117  $52,253  $51,185
Research contract, license and
 royalty income                       382       451    1,256    1,317
Total revenues                     14,508    16,568   53,509   52,502
Cost of sales                       7,903     8,072   27,033   25,250
Research and development            1,644     1,484    4,747    4,827
Sales and marketing                 4,366     3,374   12,171   10,765
General and administrative          1,963     1,917    6,407    6,540
Restructuring                           -         -        -      550
Amortization of intangibles           483     1,099    1,460    3,187
Total costs and expenses           16,359    15,946   51,818   51,119
Earnings (loss) from operations    (1,851)      622    1,691    1,383
Interest expense                      238       328      722    1,010
Interest income                        (3)       (2)      (9)     (43)
Other, net                            (86)      (78)    (251)    (262)
Total other expense                   149       248      462      705
Earnings (loss) before income
 taxes                             (2,000)      374    1,229      678
Income tax expense                   (811)      449      504    1,202
Net earnings (loss)               $(1,189)     $(75)    $725    $(524)
Earnings (loss) per share before
 income taxes - basic and diluted  $(0.07)    $0.01    $0.04    $0.02
Net earnings (loss) per share -
 basic                             $(0.04)   $(0.00)   $0.03   $(0.02)
Net earnings (loss) per share -
 diluted                           $(0.04)   $(0.00)   $0.02   $(0.02)
Weighted shares used in basic per
 share calculation                 28,850    28,302   28,802   28,202
Weighted shares used in diluted
 per share calculation             28,850    30,631   29,912   30,530
Gross profit as a % of net sales      44%       50%      48%      51%
Research and development as a
 % of net sales                       12%        9%       9%       9%
Sales and marketing as a % of net
 sales                                31%       21%      23%      21%
General and administrative as a
 % of net sales                       14%       12%      12%      13%
Condensed balance sheet data (in
 thousands):                       9/30/02  12/31/01
                                (unaudited) (audited)
 Cash and cash equivalents         $4,885    $3,396
 Working capital                   21,435    17,790
 Total assets                      79,068    82,393
 Long term obligations             10,314    10,654
 Stockholders' equity              62,416    60,409
CONTACT:
Quidel Corporation
Paul E. Landers, 858/552-7962
or
Lippert/Heilshorn & Associates
Bruce Voss/Ina McGuinness, 310/691-7100