SAN DIEGO--(BUSINESS WIRE)--Nov. 1, 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 third
quarter ended September 30, 2017.
Third Quarter 2017 Financial Highlights
-
Total revenue was $50.9 million as compared to $49.3 million in the
third quarter of 2016.
-
Total Immunoassay product revenue increased 19% from the third quarter
of 2016.
-
Total Molecular revenues increased 13% from the third quarter of 2016.
-
Reported GAAP EPS of $(0.16) per share in the third quarter of 2017,
as compared to $(0.02) per share in the third quarter of 2016 and
reported non-GAAP EPS of $0.17 per diluted share in the third quarter
of 2017, as compared to $0.10 per diluted share in the third quarter
of 2016.
Recent Operational Highlights
-
Announced definitive agreements to acquire Alere Triage® and B-type
Naturietic Peptide (BNP) Assay business run on Beckman Coulter
Analyzers, which subsequently closed on October 6, 2017.
-
Received FDA Clearance for Its Solana® RSV + hMPV Assay.
-
Received FDA Clearance for Its Point-of-Care Sofia® Lyme FIA.
Third Quarter 2017 Results
Total revenue for the third quarter of 2017 increased 3% over the third
quarter of 2016 to $50.9 million. Excluding the Gates Grant Revenue,
revenues increased by 12%. The increase excluding the Gates Grant
Revenue was due to higher Immunoassay product sales that were partially
offset by decreases in Virology and Specialty Products.
Immunoassay product revenue increased 19% in the third quarter, as Sofia
revenue increased 39% to $19.6 million, while QuickVue product revenue
decreased 6% to $15.6 million. The InflammaDry® and AdenoPlus®
diagnostic businesses acquired from RPS contributed $1.3 million to this
category in the quarter. During the third quarter of 2017, Molecular
revenue increased 13% to $2.8 million and Specialty Products decreased
6% to $2.6 million. The Virology category declined by 6%.
“Quidel has transformed itself with the completion of the acquisition of
the Alere Triage and B-type Naturietic Peptide (BNP) Assay businesses,
which we closed in early October. This transaction broadens our business
by unlocking growth opportunities in several new end markets, both
geographically and by product. We are well underway in our efforts to
bring together these two strong organizations and look forward to
providing updates as we move through the process,” said Douglas Bryant,
president and CEO of Quidel Corporation. “For our legacy Quidel
business, we had a strong quarter, with revenues increasing 12% from the
third quarter of last year, excluding the Gates Grant revenue, supported
by continued growth in Immunoassay and Molecular product revenues. In
addition, we further advanced our rapid testing solutions with the
receipt of regulatory clearance for our Solana® and Sofia®
products to test for RSV and hMPV, the leading cause of viral
respiratory infections in both the young and elderly, and antibodies to
microorganisms associated with Lyme disease, respectively. The future is
bright for Quidel as we embark on a new chapter in our business, which
we believe will drive sustained, long-term growth and shareholder value.”
Cost of Sales in the third quarter of 2017 increased $1.7 million to
$19.4 million, driven by higher revenues, increased manufacturing costs
related to the acquisition of the RPS assets and higher depreciation
expense related to the increased number of Sofia and Solana instrument
placements. Gross margin for the quarter was 62% as compared to 64% for
the same period last year driven by the increased manufacturing costs
associated with RPS and the decrease in grant revenues. Research and
Development expense decreased by $1.3 million in the third quarter as
compared to the same period last year, primarily due to reduced spend
for Savanna. Sales and Marketing expense increased by $1.0 million in
the third quarter of 2017, as compared to the third quarter of 2016
largely due to the increased personnel and consulting costs associated
with the InflammaDry and AdenoPlus diagnostic businesses acquired during
the second quarter of 2017. General and Administrative expense in the
third quarter of 2017 was in line with the third quarter of 2016. In the
third quarter of 2017, we recorded $4.6 million in due diligence and
integration costs related to the acquisition of the Alere Triage and BNP
assets.
Net loss for the third quarter of 2017 was $5.5 million, or $(0.16) per
share, as compared to net loss of $0.6 million, or $(0.02) per share,
for the third quarter of 2016. On a non-GAAP basis, excluding
amortization of intangibles, stock compensation expense and certain
non-recurring items, net income for the third quarter of 2017 was $5.9
million, or $0.17 per diluted share, as compared to net income of $3.2
million, or $0.10 per diluted share, for the same period in 2016.
Results for the Nine Months Ended September 30, 2017
Total revenues increased 17% to $162.9 million for the nine-month period
ended September 30, 2017, as compared to $138.8 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 37% in the nine-month period ended
September 30, 2017, as Sofia revenue increased 58% to $52.7 million and
QuickVue product revenue increased 20% to $61.8 million. During the
nine-month period ended September 30, 2017, Molecular revenue increased
34% to $9.1 million and Specialty Products remained consistent with
prior year at $8.2 million. The Virology category declined 7% while the
Royalties, grant and other revenue category decreased by $7.1 million,
as the Gates grant revenue recognized in the nine-month period ended
June 30, 2016 was not repeated in 2017.
For the nine-month period ended September 30, 2017, total costs and
expenses were $157.2 million as compared to $149.1 million over the same
period in 2016. Cost of Sales increased by $6.4 million from the first
nine 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 $8.2 million
primarily driven by a decrease in development spending for the Savanna
MDx platform and lower spend on clinical trial activities. Sales and
Marketing expense increased by $2.4 million, due primarily to the
personnel and consulting costs associated with the acquired InflammaDry
and AdenoPlus diagnostic businesses as well as higher incentive and
stock-based compensation. General and Administrative expenses in the
first nine months of 2017 were roughly equivalent to the first nine
months of 2016. For the first nine months of 2017, we recorded $7.0
million in due diligence and integration costs related to the
acquisition of the RPS and Alere Triage and BNP assets.
For the first nine-months of 2017, net loss was $3.1 million,
or $(0.09) per share, as compared to a net loss of $11.9 million,
or $(0.36) per share, for the same nine-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 nine months ended September 30, 2017 was $17.2 million, or $0.50 per
diluted share, as compared to net income of $0.4 million, or $0.01 per
diluted share, for the first nine 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 third
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 1067380.
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
1067380.
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®, Triage® 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 recently acquired Triage® system of
tests comprises a comprehensive test menu that provides rapid,
cost-effective treatment decisions at the point-of-care (POC), offering
a diverse immunoassay menu in a variety of tests to provide you with
diagnostic answers for quantitative BNP, CK-MB, d-dimer, myoglobin,
troponin I and qualitative TOX Drug Screen. Quidel’s research and
development engine is also developing a continuum of diagnostic
solutions from advanced immunoassay 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, fluctuations in our operating results
resulting from seasonality, the timing of the onset, length and severity
of cold and flu seasons, 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, changes in sales levels as it relates to the
absorption of our fixed costs, lower than anticipated market penetration
of our products, the reimbursement system currently in place and future
changes to that system, changes in economic conditions in our domestic
and international markets, 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
intellectual property; 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; our ability to integrate companies or
technologies we have acquired or may acquire, including integration and
transition risks, the ability to achieve anticipated financial results
and synergies, and effects of disruptions or threatened disruptions to
our relationships, or those of the acquired businesses, with
distributors, suppliers, customers and employees; intellectual property
risks, including but not limited to, infringement litigation; our debt
service requirements; our inability to settle conversions of our
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 possibility that we may incur additional
indebtedness; our need for additional funds to finance our operating
needs; volatility and disruption in the global capital and credit
markets; 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 FDA or any loss of 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 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 September 30,
|
|
|
|
2017
|
|
2016
|
|
Total revenues
|
|
$
|
50,894
|
|
|
$
|
49,341
|
|
|
Cost of sales (excludes amortization of intangible assets from
acquired businesses and technology)
|
|
19,391
|
|
|
17,728
|
|
|
Research and development
|
|
7,468
|
|
|
8,801
|
|
|
Sales and marketing
|
|
12,898
|
|
|
11,853
|
|
|
General and administrative
|
|
6,580
|
|
|
6,364
|
|
|
Amortization of intangible assets from acquired businesses and
technology
|
|
2,503
|
|
|
2,273
|
|
|
Acquisition and integration costs
|
|
4,591
|
|
|
197
|
|
|
Total costs and expenses
|
|
53,431
|
|
|
47,216
|
|
|
Operating (loss) income
|
|
(2,537
|
)
|
|
2,125
|
|
|
Interest expense, net
|
|
(2,784
|
)
|
|
(3,006
|
)
|
|
Loss before income taxes
|
|
(5,321
|
)
|
|
(881
|
)
|
|
Provision (benefit) for income taxes
|
|
204
|
|
|
(309
|
)
|
|
Net loss
|
|
$
|
(5,525
|
)
|
|
$
|
(572
|
)
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.02
|
)
|
|
Shares used in basic and diluted per share calculation
|
|
33,913
|
|
|
32,673
|
|
|
|
|
|
|
|
|
Gross profit as a % of total revenues
|
|
62
|
%
|
|
64
|
%
|
|
Research and development as a % of total revenues
|
|
15
|
%
|
|
18
|
%
|
|
Sales and marketing as a % of total revenues
|
|
25
|
%
|
|
24
|
%
|
|
General and administrative as a % of total revenues
|
|
13
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
Condensed balance sheet data (in thousands):
|
|
9/30/2017
|
|
12/31/2016
|
|
Cash and cash equivalents
|
|
$
|
172,994
|
|
|
$
|
169,508
|
|
Accounts receivable, net
|
|
41,575
|
|
|
24,990
|
|
Inventories
|
|
23,429
|
|
|
26,045
|
|
Total assets
|
|
413,821
|
|
|
388,250
|
|
Long-term debt
|
|
152,354
|
|
|
148,319
|
|
Stockholders’ equity
|
|
218,884
|
|
|
200,630
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2017
|
|
2016
|
|
Total revenues
|
|
$
|
162,853
|
|
|
$
|
138,795
|
|
|
Cost of sales (excludes amortization of intangible assets from
acquired businesses and technology)
|
|
60,716
|
|
|
54,295
|
|
|
Research and development
|
|
22,970
|
|
|
31,164
|
|
|
Sales and marketing
|
|
38,813
|
|
|
36,376
|
|
|
General and administrative
|
|
20,483
|
|
|
19,964
|
|
|
Amortization of intangible assets from acquired businesses and
technology
|
|
7,184
|
|
|
6,782
|
|
|
Acquisition and integration costs
|
|
7,022
|
|
|
568
|
|
|
Total costs and expenses
|
|
157,188
|
|
|
149,149
|
|
|
Operating income (loss)
|
|
5,665
|
|
|
(10,354
|
)
|
|
Interest expense, net
|
|
(8,387
|
)
|
|
(8,619
|
)
|
|
Loss before income taxes
|
|
(2,722
|
)
|
|
(18,973
|
)
|
|
Provision (benefit) for income taxes
|
|
355
|
|
|
(7,115
|
)
|
|
Net loss
|
|
$
|
(3,077
|
)
|
|
$
|
(11,858
|
)
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
|
$
|
(0.09
|
)
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
Shares used in basic and diluted per share calculation
|
|
33,538
|
|
|
32,645
|
|
|
|
|
|
|
|
|
Gross profit as a % of total revenues
|
|
63
|
%
|
|
61
|
%
|
|
Research and development as a % of total revenues
|
|
14
|
%
|
|
22
|
%
|
|
Sales and marketing as a % of total revenues
|
|
24
|
%
|
|
26
|
%
|
|
General and administrative as a % of total revenues
|
|
13
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
Consolidated net revenues by product
category are as follows
(in thousands):
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Immunoassays
|
|
$
|
36,458
|
|
|
$
|
30,573
|
|
|
$
|
115,974
|
|
|
$
|
84,924
|
|
Molecular
|
|
2,781
|
|
|
2,469
|
|
|
9,148
|
|
|
6,813
|
|
Virology
|
|
8,830
|
|
|
9,354
|
|
|
28,044
|
|
|
30,055
|
|
Specialty products
|
|
2,557
|
|
|
2,721
|
|
|
8,212
|
|
|
8,387
|
|
Royalties, grants and other
|
|
268
|
|
|
4,224
|
|
|
1,475
|
|
|
8,616
|
|
Total revenues
|
|
50,894
|
|
|
49,341
|
|
|
162,853
|
|
|
138,795
|
|
|
|
QUIDEL CORPORATION
|
|
Reconciliation of Non-GAAP Financial Information
|
|
(In thousands, except per share data; unaudited)
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
Net loss - GAAP
|
|
$
|
(5,525
|
)
|
|
$
|
(572
|
)
|
|
$
|
(3,077
|
)
|
|
$
|
(11,858
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Non-cash stock compensation expense
|
|
1,879
|
|
|
1,734
|
|
|
5,938
|
|
|
5,820
|
|
|
Amortization of intangibles
|
|
2,720
|
|
|
2,381
|
|
|
7,605
|
|
|
7,132
|
|
|
Amortization of debt discount and issuance costs
|
|
1,388
|
|
|
1,343
|
|
|
4,129
|
|
|
4,022
|
|
|
Acquisition and integration costs
|
|
4,591
|
|
|
197
|
|
|
7,022
|
|
|
568
|
|
|
Income tax impact of valuation allowance for deferred tax assets
|
|
4,590
|
|
|
137
|
|
|
4,264
|
|
|
852
|
|
|
Income tax impact of non-cash stock compensation expense,
amortization of intangibles, debt discount and issuance costs and
acquisition and integration costs
|
|
(3,700
|
)
|
|
(1,980
|
)
|
|
(8,640
|
)
|
|
(6,140
|
)
|
|
Adjusted net income
|
|
$
|
5,943
|
|
|
$
|
3,240
|
|
|
$
|
17,241
|
|
|
$
|
396
|
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings
|
|
$
|
0.18
|
|
|
$
|
0.10
|
|
|
$
|
0.51
|
|
|
$
|
0.01
|
|
|
Net loss - GAAP
|
|
$
|
(0.16
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.36
|
)
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings
|
|
$
|
0.17
|
|
|
$
|
0.10
|
|
|
$
|
0.50
|
|
|
$
|
0.01
|
|
|
Net loss - GAAP
|
|
$
|
(0.16
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171101006573/en/
Source: Quidel Corporation
Quidel Contact:
Quidel Corporation
Randy Steward
Chief
Financial Officer
858.552.7931
or
Media and Investors
Contact:
Quidel Corporation
Angie Mazza
312.690.6006
amazza@clermontpartners.com