SAN DIEGO--(BUSINESS WIRE)--Jul. 26, 2017--
Quidel Corporation (NASDAQ: QDEL), a provider of rapid diagnostic
testing solutions, cellular-based virology assays and molecular
diagnostic systems, announced today financial results for the second
quarter ended June 30, 2017.
Second Quarter and Recent 2017 Highlights:
Financial Highlights
-
Total revenue was $38.3 million as compared to $39.1 million in the
second quarter of 2016.
-
Total Molecular revenues increased 44% from the second quarter of 2016.
-
Reported GAAP EPS of $(0.35) per share in the second quarter of 2017,
as compared to $(0.24) per share in the second quarter of 2016 and
reported non-GAAP EPS of $(0.12) per share in the second quarter of
2017, as compared to $(0.11) per share in the second quarter of 2016.
Operational Highlights
-
Announced definitive agreements to acquire Alere Triage® assets.
-
Completed the acquisition of InflammaDry® and AdenoPlus® CLIA waived
eye health businesses.
-
Received CE Mark, FDA clearance and CLIA waiver for point-of-care
Sofia® 2 Immunoassay Analyzer for use with Sofia® Respiratory
Syncytial Virus (RSV) assay.
-
Received CE Mark, FDA clearance and CLIA waiver for point-of-care
Sofia® 2 Immunoassay Analyzer for use with Sofia® Influenza A+B assay.
-
Received FDA clearance for Solana® C. difficile molecular assay.
-
Received approval for point-of-care Sofia® Influenza A+B assay from
Japan's MOH.
-
Received the CE Mark for Thyretain® TBI Reporter BioAssay.
Second Quarter 2017 Results
Total revenue for the second quarter of 2017 decreased 2% over the
second quarter of 2016 to $38.3 million. Excluding Grant Revenue,
revenues increased by 1%. The slight increase excluding Grant Revenue
was due to higher Molecular product sales that were mostly offset by
decreases in Virology and Specialty Products.
Immunoassay product revenue increased 1% in the second quarter, as Sofia
revenue increased 21% to $7.9 million, while QuickVue product revenue
decreased 10% to $13.8 million. During the second quarter of 2017,
Molecular revenue increased 44% to $3.2 million and Specialty Products
decreased 5% to $3.1 million. The Virology category declined 7%, mostly
due to a decline in the sales of respiratory products.
“Our second quarter financial results reflected typical seasonality in
our business with the decline in testing for Influenza-like Illness
(ILI) in April,” said Douglas Bryant, president and CEO of Quidel
Corporation. “Overall, it was an incredibly productive quarter for our
team in advancing our long-term strategic plan. First and foremost, we
negotiated agreements to acquire the Alere Triage® assets.
This important transaction will broaden our business by unlocking growth
opportunities in several new end markets, both geographically and by
product. And although on a much smaller scale, we completed another
acquisition that gives us an entrée into the rapidly evolving eye health
segment. In addition, on an organic basis, we received regulatory
clearance for a number of our Sofia®, Sofia® 2 and
Solana® products. We are incredibly encouraged by the
progress we have made in positioning Quidel for sustained, long-term
success and value creation for our shareholders.”
Cost of Sales in the second quarter of 2017 increased $0.4 million to
$17.8 million, due to higher depreciation expense related to the
increased number of Sofia and Solana instrument placements and costs
associated with the integration of the InflammaDry® and AdenoPlus®
diagnostic businesses. Gross margin for the quarter was 54% as compared
to 56% for the same period last year driven by the decrease in grant
revenue. R&D expense decreased by $2.0 million in the second quarter as
compared to the same period last year, primarily due to reduced spend
for Savanna and lower clinical trial costs. Sales and Marketing expense
for the second quarter of 2017 was approximately equal to the second
quarter of 2016. G&A expense in the second quarter of 2017 was in line
with the second quarter of 2016. In the second quarter of 2017, we
recorded one-time costs of $2.4 million in business development
activities related primarily to the announced definitive agreements to
acquire Alere's Triage assets.
Net loss for the second quarter of 2017 was $11.8 million, or $(0.35)
per share, as compared to net loss of $7.8 million, or $(0.24) per
share, for the second quarter of 2016. On a non-GAAP basis, excluding
amortization of intangibles, stock compensation expense and certain
non-recurring items, net loss for the second quarter of 2017 was $4.0
million, or $(0.12) per share, as compared to a net loss of $3.4
million, or $(0.11) per share, for the same period in 2016.
Results for the Six Months Ended June 30, 2017
Total revenues increased 25% to $112.0 million for the six-month period
ended June 30, 2017, as compared to $89.5 million for the same period
in 2016. The increase in revenues was primarily driven by greater sales
of Immunoassay and Molecular products that were partially offset by
decreases in Virology and Grant revenue.
Immunoassay product revenue increased 46% in the six-month period ended
June 30, 2017, as Sofia revenue increased 72% to $33.0 million, and
QuickVue product revenue increased 32% to $46.2 million. During the
six-month period ended June 30, 2017, Molecular revenue increased 46% to
$6.3 million and Specialty Products remained consistent with prior year
at $5.7 million. The Virology category declined 7% while the Royalties,
grant and other revenue category decreased by $3.1 million, as grant
revenue recognized in the six-month period ended June 30, 2016 was not
repeated in 2017.
For the six-month period ended June 30, 2017, total costs and expenses
were $103.8 million as compared to $101.9 million over the same period
in 2016. Cost of Sales increased by $4.8 million from the first six
months of 2016 driven by increased revenues in the current period,
partially offset by favorable product mix, with higher Influenza and
molecular product sales in the same period as compared to the prior
year. Research and Development expense decreased by $6.9 million
primarily driven by a decrease in development spending for the Savanna
MDx platform and reduced spending on clinical trials. Sales and
Marketing expense increased by $1.4 million, due primarily to the
increased personnel and consulting costs as well as costs associated
with the acquired InflammaDry® and AdenoPlus® diagnostic businesses.
General & Administrative expenses in the first half of 2017 were roughly
equivalent to the first half of 2016. For the first six months of 2017,
we recorded $2.4 million in one-time costs, due to business development
activities primarily related to the announced definitive agreements to
acquire Alere's Triage assets.
For the first six-months of 2017, net income was $2.4 million,
or $0.07 per diluted share, as compared to a net loss of $11.3 million,
or $(0.35) per share, for the same six-month period in 2016. On a
non-GAAP basis, excluding amortization of intangibles, stock
compensation expense and certain non-recurring items, net income for
the six months ended June 30, 2017 was $11.3 million, or $0.33 per
diluted share, as compared to a net loss of $2.8 million, or $(0.09) per
share, for the first six months of 2016.
Non-GAAP Financial Information
The Company is providing non-GAAP financial information to exclude the
effect of stock-based compensation, amortization of intangibles and
certain non-recurring items on income (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 income (loss) and adjusted net
earnings (loss) per share information for the periods presented because
it believes this enhances the comparison of the Company’s financial
performance from period-to-period, and to that of its competitors. This
press release 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 to discuss the second
quarter 2017 results as well as other business matters today 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
877-930-5791, or from outside the U.S. dial 253-336-7286, and enter the
pass code 5565-4364.
A live webcast of the call can be accessed on the Investor Relations
section of the Quidel website (http://ir.quidel.com).
The website 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 855-859-2056 from the U.S., or by
dialing 404-537-3406 for international callers, and entering pass code
5565-4364.
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 Sofia®, QuickVue®, D3® Direct
Detection, Thyretain® and InflammaDry® leading brand names, as well as
under the new Solana®, AmpliVue®and Lyra® molecular
diagnostic brands, Quidel's products aid in the detection and diagnosis
of many critical diseases and conditions, including, among others, 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 quidel.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, our reliance on development of new
technologies, fluctuations in our operating results resulting from the
timing of the onset, length and severity of cold and flu seasons,
seasonality, government and media attention focused on influenza and the
related potential impact on humans from novel influenza viruses, adverse
changes in competitive conditions in domestic and international markets,
the reimbursement system currently in place and future changes to that
system, changes in economic conditions in our domestic and international
markets, lower than anticipated market penetration of our products, the
quantity of our product in our distributors’ inventory or distribution
channels, changes in the buying patterns of our distributors, and
changes in the healthcare market and consolidation of our customer
base; our development and protection of proprietary technology rights;
our development of new technologies, products and markets; our reliance
on a limited number of key distributors; our reliance on sales of our
influenza diagnostics tests; our ability to manage our growth strategy,
including our ability to effect strategic acquisitions, including the
acquisitions of Alere Inc.’s cardiovascular and toxicology Triage®
MeterPro business and the assets and liabilities relating to Alere’s
contractual arrangement with Beckman Coulter, Inc. for the supply by
Seller of antibodies and other inputs related to, and distribution of,
the Triage® BNP Test for the Beckman Coulter Access Family of
Immunoassay Systems and to integrate companies or technologies we have
acquired or may acquire including our ability to achieve anticipated
synergies and process improvements; intellectual property risks,
including but not limited to, infringement litigation; our inability to
settle conversions of our 3.25% Convertible Senior Notes due 2020 (the
“Convertible Senior Notes”) in cash; the effect on our operating results
from the trigger of the conditional conversion feature of our
Convertible Senior Notes; the impact of restrictive covenants in our
credit agreements and our ability to comply with these covenants,
including our ability to incur additional indebtedness; the amount of,
and our ability to repay, renew or extend, our outstanding debt and its
impact on our operations and our ability to obtain financing; our
ability to generate cash, including to service our debt; our need for
additional funds to finance our capital or operating needs; the
financial soundness of our customers and suppliers; acceptance of our
products among physicians and other healthcare providers; competition
with other providers of diagnostic products; adverse actions or delays
in new product reviews or related to currently-marketed products by the
U.S. Food and Drug Administration (the “FDA”); or other regulatory
authorities or loss of any previously received regulatory approvals or
clearances; changes in government policies; compliance with other
government regulations, such as safe working conditions, manufacturing
practices, environmental protection, fire hazard and disposal of
hazardous substances; third-party reimbursement policies; our ability to
meet demand for our products; interruptions in our supply of raw
materials; product defects; business risks not covered by insurance and
exposure to other litigation claims; interruption to our computer
systems; competition for and loss of management and key personnel;
international risks, including but not limited to, compliance with
product registration requirements, exposure to currency exchange
fluctuations and foreign currency exchange risk sharing arrangements,
longer payment cycles, lower selling prices and greater difficulty in
collecting accounts receivable, reduced protection of intellectual
property rights, political and economic instability, taxes, and
diversion of lower priced international products into U.S. markets;
dilution resulting from future sales of our equity; volatility in our
stock price; provisions in our charter documents, Delaware law and the
indenture governing our Convertible Senior Notes that might delay or
impede stockholder actions with respect to business combinations or
similar transactions; and our intention of not paying dividends.
Forward-looking statements typically are identified by the use of terms
such as “may,” “will,” “should,” “might,” “expect,” “anticipate,”
“estimate,” “plan,” “intend,” “goal,” “project,” “strategy,” “future,”
and similar words, although some forward-looking statements are
expressed differently. The risks described in reports and registration
statements that we file with the Securities and Exchange Commission (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. Except as required by law, we undertake no
obligation to publicly release the results of any revision or update of
these forward-looking statements, whether as a result of new
information, future events or otherwise.
|
QUIDEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data; unaudited)
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
Total revenues
|
|
$
|
38,267
|
|
|
$
|
39,133
|
|
|
Cost of sales (excludes amortization of intangible assets from
acquired businesses and technology)
|
|
|
17,755
|
|
|
|
17,318
|
|
|
Research and development
|
|
|
7,627
|
|
|
|
9,656
|
|
|
Sales and marketing
|
|
|
12,360
|
|
|
|
12,206
|
|
|
General and administrative
|
|
|
6,783
|
|
|
|
6,430
|
|
|
Amortization of intangible assets from acquired businesses and
technology
|
|
|
2,390
|
|
|
|
2,290
|
|
|
One-time acquisition costs
|
|
|
2,379
|
|
|
|
252
|
|
|
Total costs and expenses
|
|
|
49,294
|
|
|
|
48,152
|
|
|
Operating loss
|
|
|
(11,027
|
)
|
|
|
(9,019
|
)
|
|
Interest expense, net
|
|
|
(2,778
|
)
|
|
|
(2,924
|
)
|
|
Loss before income taxes
|
|
|
(13,805
|
)
|
|
|
(11,943
|
)
|
|
Benefit for income taxes
|
|
|
(1,963
|
)
|
|
|
(4,103
|
)
|
|
Net loss
|
|
$
|
(11,842
|
)
|
|
$
|
(7,840
|
)
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
|
$
|
(0.35
|
)
|
|
$
|
(0.24
|
)
|
|
|
|
|
|
|
|
|
Shares used in basic and diluted per share calculation
|
|
|
33,500
|
|
|
|
32,541
|
|
|
|
|
|
|
|
|
|
Gross profit as a % of total revenues
|
|
|
54
|
%
|
|
|
56
|
%
|
|
Research and development as a % of total revenues
|
|
|
20
|
%
|
|
|
25
|
%
|
|
Sales and marketing as a % of total revenues
|
|
|
32
|
%
|
|
|
31
|
%
|
|
General and administrative as a % of total revenues
|
|
|
18
|
%
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Condensed balance sheet data (in thousands):
|
|
6/30/2017
|
|
12/31/2016
|
|
Cash and cash equivalents
|
|
$
|
175,048
|
|
|
$
|
169,508
|
|
|
Accounts receivable, net
|
|
|
19,836
|
|
|
|
24,990
|
|
|
Inventories
|
|
|
22,964
|
|
|
|
26,045
|
|
|
Total assets
|
|
|
398,537
|
|
|
|
388,250
|
|
|
Long-term debt
|
|
|
151,000
|
|
|
|
148,319
|
|
|
Stockholders’ equity
|
|
|
212,588
|
|
|
|
200,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2017
|
|
2016
|
|
Total revenues
|
|
$
|
111,959
|
|
|
$
|
89,454
|
|
|
Cost of sales (excludes amortization of intangible assets from
acquired businesses and technology)
|
|
41,325
|
|
|
36,567
|
|
|
Research and development
|
|
15,502
|
|
|
22,363
|
|
|
Sales and marketing
|
|
25,915
|
|
|
24,523
|
|
|
General and administrative
|
|
13,903
|
|
|
13,600
|
|
|
Amortization of intangible assets from acquired businesses and
technology
|
|
4,681
|
|
|
4,509
|
|
|
One-time acquisition costs
|
|
2,431
|
|
|
371
|
|
|
Total costs and expenses
|
|
103,757
|
|
|
101,933
|
|
|
Operating income (loss)
|
|
8,202
|
|
|
(12,479
|
)
|
|
Interest expense, net
|
|
(5,603
|
)
|
|
(5,613
|
)
|
|
Income (loss) before income taxes
|
|
2,599
|
|
|
(18,092
|
)
|
|
Provision (benefit) for income taxes
|
|
151
|
|
|
(6,806
|
)
|
|
Net income (loss)
|
|
$
|
2,448
|
|
|
$
|
(11,286
|
)
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
$
|
0.07
|
|
|
$
|
(0.35
|
)
|
|
Diluted earnings (loss) per share
|
|
$
|
0.07
|
|
|
$
|
(0.35
|
)
|
|
|
|
|
|
|
|
Shares used in basic per share calculation
|
|
33,351
|
|
|
32,632
|
|
|
Shares used in diluted per share calculation
|
|
34,295
|
|
|
32,632
|
|
|
|
|
|
|
|
|
Gross profit as a % of total revenues
|
|
63
|
%
|
|
59
|
%
|
|
Research and development as a % of total revenues
|
|
14
|
%
|
|
25
|
%
|
|
Sales and marketing as a % of total revenues
|
|
23
|
%
|
|
27
|
%
|
|
General and administrative as a % of total revenues
|
|
12
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Consolidated net revenues by product category are as follows (in
thousands):
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Immunoassays
|
|
$
|
21,983
|
|
|
$
|
21,848
|
|
|
$
|
79,516
|
|
|
$
|
54,351
|
|
Molecular
|
|
3,214
|
|
|
2,236
|
|
|
6,325
|
|
|
4,344
|
|
Virology
|
|
9,218
|
|
|
9,861
|
|
|
19,214
|
|
|
20,701
|
|
Specialty products
|
|
3,090
|
|
|
3,258
|
|
|
5,655
|
|
|
5,666
|
|
Royalties, grants and other
|
|
762
|
|
|
1,930
|
|
|
1,249
|
|
|
4,392
|
|
Total revenues
|
|
38,267
|
|
|
39,133
|
|
|
111,959
|
|
|
89,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUIDEL CORPORATION
Reconciliation of Non-GAAP Financial Information
(In thousands, except per share data; unaudited)
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
Net (loss) income - GAAP
|
|
$
|
(11,842
|
)
|
|
$
|
(7,840
|
)
|
|
$
|
2,448
|
|
|
$
|
(11,286
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Non-cash stock compensation expense
|
|
2,138
|
|
|
2,106
|
|
|
4,059
|
|
|
4,086
|
|
|
Amortization of intangibles
|
|
2,515
|
|
|
2,399
|
|
|
4,885
|
|
|
4,751
|
|
|
Amortization of debt discount and issuance costs
|
|
1,375
|
|
|
1,333
|
|
|
2,741
|
|
|
2,679
|
|
|
One-time acquisition costs
|
|
2,379
|
|
|
252
|
|
|
2,431
|
|
|
371
|
|
|
Income tax impact of valuation allowance for deferred tax assets
|
|
2,359
|
|
|
435
|
|
|
(326
|
)
|
|
715
|
|
|
Income tax impact of non-cash stock compensation expense,
amortization of intangibles, debt discount and issuance costs and
one-time business development expenses
|
|
(2,940
|
)
|
|
(2,131
|
)
|
|
(4,940
|
)
|
|
(4,160
|
)
|
|
Adjusted net (loss) income
|
|
$
|
(4,016
|
)
|
|
$
|
(3,446
|
)
|
|
$
|
11,298
|
|
|
$
|
(2,844
|
)
|
|
Basic (loss) earnings per share:
|
|
|
|
|
|
|
|
|
|
Adjusted net (loss) earnings
|
|
$
|
(0.12
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
0.34
|
|
|
$
|
(0.09
|
)
|
|
Net (loss) income - GAAP
|
|
$
|
(0.35
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.35
|
)
|
|
Diluted (loss) earnings per share:
|
|
|
|
|
|
|
|
|
|
Adjusted net (loss) earnings
|
|
$
|
(0.12
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
0.33
|
|
|
$
|
(0.09
|
)
|
|
Net (loss) income - GAAP
|
|
$
|
(0.35
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.35
|
)
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170726006232/en/
Source: Quidel Corporation
Quidel Corporation
Randy Steward
Chief Financial Officer
858.552.7931
or
Media
and Investors Contact:
Quidel Corporation
Ruben Argueta
858.646.8023
ruben.argueta@quidel.com