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Quidel Reports Third Quarter 2021 Financial Results

11/04/2021

SAN DIEGO--(BUSINESS WIRE)-- 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, 2021.

Third Quarter 2021 Highlights

  • Total revenues increased 7% to $509.7 million, from $476.1 million in the third quarter of 2020.
  • Total sales of COVID-19 products increased 7% to $402.6 million, from $375.7 million in the third quarter of 2020.
  • Total sales of Influenza products were $13.8 million, compared to $9.0 million in the third quarter of 2020.
  • Reported GAAP EPS of $5.08 per diluted share in the third quarter of 2021, as compared to $5.33 per diluted share in the third quarter of 2020.
  • Reported non-GAAP EPS of $5.36 per diluted share in the third quarter of 2021, as compared to $5.78 per diluted share in the third quarter of 2020.
  • Resolved ongoing litigation with Beckman Coulter; substantially completed transition of the BNP business to Beckman Coulter for cash payments to Quidel of between $70.0 million and $75.0 million per year from 2022 through 2029, and pro-rated for 2021.
  • Received the CE Mark for Savanna® multiplex molecular analyzer and Savanna RVP4 assay.
  • Made QuickVue® At-Home OTC COVID-19 Test available to consumers at CVS Pharmacy and online at cvs.com.
  • Secured 12-month agreement with U.S. government worth over $500 million to supply QuickVue At-Home OTC COVID-19 Tests.

Results for the Third Quarter 2021

Total revenues for the third quarter of 2021 were $509.7 million, versus $476.1 million for the third quarter of 2020. The 7% increase in sales from the third quarter of 2020 was driven by increased sales of COVID-19 diagnostic tests, led by QuickVue At-Home OTC COVID-19 Test, and strong sales of Sofia® SARS and Lyra® PCR COVID-19 tests. Currency exchange rate impact for the third quarter of 2021 was favorable by $1.0 million. Excluding COVID-19 and influenza products, revenue for the core business increased 2% to $93.3 million in the third quarter of 2021, as compared to $91.4 million in the third quarter of 2020.

Rapid Immunoassay revenue increased by $41.7 million in the third quarter of 2021 to $378.7 million, driven primarily by continued demand for our Sofia SARS and QuickVue SARS antigen assays. Cardiometabolic Immunoassay revenue totaled $64.8 million in the third quarter of 2021, equal to the third quarter of 2020. Molecular Diagnostic Solutions revenue decreased by $8.2 million to $54.8 million, due to a $14.3 million decline in sales of Lyra PCR assays for COVID-19 diagnosis that was partially offset by incremental revenue from our Solana® SARS-CoV-2 assay. Specialized Diagnostic Solutions revenue increased 2% from the third quarter of 2020 to $11.4 million, driven by increased MicroVue specialty products.

“We delivered strong top-line growth in the third quarter of 2021, meeting increased demand for our SARS category products due to the sudden increase in COVID-19 cases associated with the Delta variant,” said Douglas Bryant, President and CEO of Quidel. While we are pleased to see COVID-19 cases trending down, we still see the need for symptomatic and asymptomatic testing and anticipate that a baseline level of demand will continue into early 2022. Our expectations are bolstered by consumer, corporate and institutional purchasing and the 12-month agreement to supply over $500 million in QuickVue At-Home OTC COVID-19 Tests to the federal government.”

Mr. Bryant added, “From a production capacity perspective, we continue to build toward our planned capacity goals for our QuickVue and Sofia diagnostic tests to support our institutional and government partnerships, and further promote rapid testing to minimize the spread of COVID-19 within our communities. In that regard, I am particularly proud of our work with charitable and sports organizations to democratize access to testing in minority and underserved communities that have been hardest-hit by COVID-19 infections. Quidel is committed to expanding these efforts as we scale.”

Mr. Bryant continued, “In addition to our commercial success, I am incredibly pleased with the progress we’ve made on our R&D projects during the quarter as we execute on our multi-faceted, long-term growth strategy. In the quarter, we achieved a notable milestone in obtaining CE Mark for our Savanna platform and resolved a critical component shortage issue, and we are planning to launch the Savanna platform in select markets outside the U.S. These developments, when combined with our global strategic partnerships to increase brand awareness and expand access to high quality, affordable diagnostic testing, make Quidel exceptionally well-prepared to continue driving growth across our multiple platforms and channels.”

Mr. Bryant concluded, “I would like to thank all our teams for their unrelenting commitment to overcoming operational challenges and making impressive progress against our growth roadmap. We are excited about the opportunities that lie ahead as we continue to advance our diagnostics portfolio and position Quidel for long-term growth.”

Gross profit was $373.4 million, or 73% of revenue for the three months ended September 30, 2021, compared to $383.6 million, or 81% of revenue for the three months ended September 30, 2020. The decreased gross profit was driven by lower selling prices for our SARS products and a shift in product mix from Sofia to QuickVue COVID-19 diagnostic products. Increases in supply chain and other indirect manufacturing costs also contributed to lower gross profit in the current period. Gross margin for the three months ended September 30, 2021 declined as compared to the same period in the prior year due to the same factors. R&D expense increased by $2.2 million in the third quarter of 2021 as compared to the same period last year, primarily due to increased spending on Savanna instrument and cartridge development in support of U.S. clinical trials. Sales and marketing expense increased by $9.4 million in the third quarter of 2021 as compared to the same period last year, primarily due to higher product promotional spend associated with the launch of our QuickVue At-Home OTC COVID-19 Test, as well as increased freight expense and higher compensation costs driven by increased headcount and improved performance in the quarter. G&A expense increased by $4.7 million in the third quarter of 2021 as compared to the same period last year due to increased spend on IT projects and higher compensation costs driven by increased headcount to support the growth of the business.

In the third quarter of 2021, Quidel recorded an income tax expense of $65.7 million, as compared to $63.5 million in the same quarter of the prior year. The higher tax expense for the three months ended September 30, 2021 compared to the same period in the prior year is primarily a result of an increase in state taxes owed and a decrease in stock-based compensation proportionate to pre-tax profits.

Net income for the third quarter of 2021 was $215.8 million, or $5.08 per diluted share, as compared to net income of $232.3 million, or $5.33 per diluted share, for the third quarter of 2020. On a non-GAAP basis, net income for the third quarter of 2021 was $227.7 million, or $5.36 per diluted share, as compared to net income of $252.0 million, or $5.78 per diluted share, for the same period in 2020.

Results for the Nine Months Ended September 30, 2021

Total revenues for the nine months ended September 30, 2021 were $1,061.7 million, versus $852.5 million for the nine months ended September 30, 2020. The 25% increase in sales from the nine months ended September 30, 2020 was driven by growth in Rapid Immunoassay and Molecular Diagnostic Solutions product categories as a result of relatively strong demand for both rapid antigen and PCR COVID-19 tests in 2021 versus the same period in 2020. Revenue growth in the first nine months of 2021 also came from Cardiometabolic Immunoassay products, the revenue of which increased 17% compared to the same period in 2020. Specialized Diagnostic Solutions revenue decreased 17% from the nine months ended September 30, 2020, driven primarily by a decline in demand for cell culture respiratory products. Currency exchange rate impact for the nine months ended September 30, 2021 was favorable by $5.9 million . Excluding COVID-19 and influenza products, revenue for the core business increased 6% to $274.7 million for the nine months ended September 30, 2021, as compared to $259.5 million for the nine months ended September 30, 2020.

Gross profit increased to $781.6 million, or 74% of revenue for the nine months ended September 30, 2021, compared to $647.4 million, or 76% of revenue for the nine months ended September 30, 2020. The increased gross profit was due to higher sales volumes in the current period, partially offset by unfavorable product mix, lower selling prices for our SARS products and increased supply chain and other indirect manufacturing costs. Gross margin for the nine months ended September 30, 2021 declined as compared to the same period in the prior year driven primarily by product mix and lower selling prices. R&D expense increased by $10.8 million in the nine months ended September 30, 2021 as compared to the same period last year, primarily due to increased spending on the Savanna system and clinical trials. Sales and marketing expense increased by $23.4 million in the nine months ended September 30, 2021 as compared to the same period in 2020, primarily due to higher product promotional spend associated with the launch of the QuickVue At-Home OTC COVID-19 Test, higher compensation costs driven by increased headcount and increased revenue. G&A expense increased by $15.3 million in the nine months ended September 30, 2021 as compared to the same period last year due to increased spend on IT projects and higher compensation costs driven by increased headcount to support the growth of the business. Acquisition and integration costs of $1.8 million and $3.2 million for the nine months ended September 30, 2021 and 2020, respectively, primarily related to the evaluation of new business development opportunities.

For the nine months ended September 30, 2021, Quidel recorded an income tax expense of $112.1 million, as compared to $84.6 million in the same period last year. The higher tax expense for the nine months ended September 30, 2021 compared to the same period in the prior year is a result of an increase in state taxes owed and a decrease in tax deductions from stock-based compensation proportionate to pre-tax profits.

Net income for the nine months ended September 30, 2021 was $412.9 million, or $9.72 per diluted share, as compared to net income of $340.2 million, or $7.82 per diluted share, for the nine months ended September 30, 2020. On a non-GAAP basis, net income for the nine months ended September 30, 2021 was $450.4 million, or $10.60 per diluted share, as compared to net income of $385.6 million, or $8.85 per diluted share, for the same period in 2020.

Non-GAAP Financial Information

Quidel is providing non-GAAP financial information to exclude the effect of stock-based compensation, amortization of intangibles, non-cash interest expense, foreign exchange gains and losses and certain non-recurring items on net income and earnings 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.

Quidel is providing the adjusted gross profit, adjusted operating income, adjusted net income, adjusted net earnings per share, and constant currency revenue information for the periods presented because it believes these non-GAAP financial measures enhance the comparison of Quidel’s financial results from period-to-period and to that of its competitors. Constant currency revenue is calculated by (i) translating current period revenues using prior period exchange rates and (ii) excluding any hedging effect recognized in the current period. The related constant currency fluctuation rate (expressed as a percentage) is calculated by determining the change in current period constant currency revenue compared to prior period revenue.

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 2021 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 join the live webcast, participants may click the following link directly: https://event.on24.com/wcc/r/3485847/878757FED3288D2F3FBAF8E692AD65DE, or access the event via the Investor Relations section of the Quidel website (http://ir.quidel.com).

The website replay will be available for one year. The telephone replay will be available for 14 days beginning at 8:00 p.m. Eastern Time (5:00 p.m. Pacific Time) on November 4, 2021 by dialing 929-458-6194 from the U.S., or by dialing +44-204-525-0658 for international callers, and entering pass code 095213.

About Quidel Corporation

Quidel Corporation (Nasdaq: QDEL) is a leading manufacturer of diagnostic solutions at the point of care, delivering a continuum of rapid testing technologies that further improve the quality of health care throughout the globe. An innovator for over 40 years in the medical device industry, Quidel pioneered the first FDA-cleared point-of-care test for influenza in 1999 and was the first to market a rapid SARS-CoV-2 antigen test in the U.S. Under trusted brand names Sofia, Solana, Lyra, Triage® and QuickVue, Quidel’s comprehensive product portfolio includes tests for a wide range of infectious diseases, cardiac and autoimmune biomarkers, as well as a host of products to detect COVID-19. With products made in America, Quidel’s mission is to provide patients with immediate and frequent access to highly accurate, affordable testing for the good of our families, our communities and the world. For more information about Quidel, visit quidel.com.

View our story told by our people at www.quidel.com/ourstory.

Forward-looking Statements

This press release contains forward-looking statements that involve material risks, assumptions, and uncertainties. Forward-looking statements typically contain terms such as “may,” “will,” “should,” “might,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “goal,” “project,” “strategy,” “future,” and similar words. Various factors could cause our actual results and performance to differ materially from the forward-looking statements. Factors that could contribute to such differences include: impacts of the COVID-19 pandemic; competition; our development of new technologies, products, and markets; our reliance on sales of our COVID-19 and influenza diagnostic tests; our reliance on a limited number of key distributors; acceptance of our products among physicians, healthcare providers, or other customers; the impact of third-party reimbursement policies; our ability to meet demand for our products; interruptions in our supply of raw materials and other components; costs and disruptions from failures in our information technology and storage systems; international risks, including compliance with product registration requirements and legal requirements, tariffs, currency exchange fluctuations, reduced protection of intellectual property rights, and taxes; worldwide economic, political, and social uncertainty; our development, acquisition, and protection of proprietary technology rights; intellectual property risks and third-party claims of infringement; loss of our Emergency Use Authorization from the U.S. Food and Drug Administration for our COVID-19 products; failures or delays in receiving regulatory approvals, clearances, or authorizations, the loss of previously received approvals, or other adverse actions by regulatory authorities; performance, timing, funding and compliance risks relating to government contracts; product defects; compliance with government regulations relating to the handling, storage, and disposal of hazardous substances; our ability to identify and successfully acquire and integrate potential acquisition targets; our need for additional funds to finance our capital or operating needs; and other risks described in our periodic reports and registration statements filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update these forward-looking statements for revisions or changes after the date of this press release.

QUIDEL CORPORATION

(In thousands, except per share data; unaudited)

 

 

Three months ended September 30,

Consolidated Statements of Operations:

2021

 

2020

Total revenues

$

509,736

 

 

$

476,058

 

Cost of sales

136,328

 

 

92,439

 

Gross profit

373,408

 

 

383,619

 

Research and development

23,676

 

 

21,448

 

Sales and marketing

46,778

 

 

37,413

 

General and administrative

21,113

 

 

16,410

 

Acquisition and integration costs

 

 

389

 

Total operating expenses

91,567

 

 

75,660

 

Operating income

281,841

 

 

307,959

 

Other expense, net

 

 

 

Interest and other expense, net

(347

)

 

(1,797

)

Loss on extinguishment of debt

 

 

(10,384

)

Total other expense, net

(347

)

 

(12,181

)

Income before income taxes

281,494

 

 

295,778

 

Provision for income taxes

65,742

 

 

63,510

 

Net income

$

215,752

 

 

$

232,268

 

 

 

 

 

Basic earnings per share

$

5.17

 

 

$

5.52

 

Diluted earnings per share

$

5.08

 

 

$

5.33

 

Shares used in basic per share calculation

41,728

 

 

42,105

 

Shares used in diluted per share calculation

42,463

 

 

43,596

 

 

 

 

 

Gross profit as a % of total revenues

73

%

 

81

%

Research and development as a % of total revenues

5

%

 

5

%

Sales and marketing as a % of total revenues

9

%

 

8

%

General and administrative as a % of total revenues

4

%

 

3

%

 

 

 

 

Consolidated net revenues by product category are as follows:

 

 

 

Rapid Immunoassay

$

378,721

 

 

$

337,042

 

Cardiometabolic Immunoassay

64,790

 

 

64,810

 

Molecular Diagnostic Solutions

54,834

 

 

62,993

 

Specialized Diagnostic Solutions

11,391

 

 

11,213

 

Total revenues

$

509,736

 

 

$

476,058

 

 

 

 

 

Condensed balance sheet data:

9/30/2021

 

12/31/2020

Cash and cash equivalents

$

578,447

 

 

$

489,941

 

Accounts receivable, net

$

335,560

 

 

$

497,688

 

Inventories

$

196,976

 

 

$

113,798

 

Total assets

$

2,106,382

 

 

$

1,871,164

 

Short-term debt

$

272

 

 

$

238

 

Long-term debt

$

431

 

 

$

4,100

 

Stockholders’ equity

$

1,634,067

 

 

$

1,332,703

 

QUIDEL CORPORATION

(In thousands, except per share data; unaudited)

 

 

Nine months ended September 30,

Consolidated Statements of Operations:

2021

 

2020

Total revenues

$

1,061,684

 

 

$

852,465

 

Cost of sales

280,131

 

 

205,104

 

Gross profit

781,553

 

 

647,361

 

Research and development

69,594

 

 

58,797

 

Sales and marketing

119,111

 

 

95,718

 

General and administrative

61,758

 

 

46,421

 

Acquisition and integration costs

1,754

 

 

3,175

 

Total operating expenses

252,217

 

 

204,111

 

Operating income

529,336

 

 

443,250

 

Other expense, net

 

 

 

Interest and other expense, net

(4,352

)

 

(8,071

)

Loss on extinguishment of debt

 

 

(10,384

)

Total other expense, net

(4,352

)

 

(18,455

)

Income before income taxes

524,984

 

 

424,795

 

Provision for income taxes

112,075

 

 

84,638

 

Net income

$

412,909

 

 

$

340,157

 

 

 

 

 

Basic earnings per share

$

9.91

 

 

$

8.08

 

Diluted earnings per share

$

9.72

 

 

$

7.82

 

Shares used in basic per share calculation

41,657

 

 

42,093

 

Shares used in diluted per share calculation

42,471

 

 

43,582

 

 

 

 

 

Gross profit as a % of total revenues

74

%

 

76

%

Research and development as a % of total revenues

7

%

 

7

%

Sales and marketing as a % of total revenues

11

%

 

11

%

General and administrative as a % of total revenues

6

%

 

5

%

 

 

 

 

Consolidated net revenues by product category are as follows:

 

 

 

Rapid Immunoassay

$

676,461

 

 

$

513,578

 

Cardiometabolic Immunoassay

203,008

 

 

172,902

 

Molecular Diagnostic Solutions

149,553

 

 

126,533

 

Specialized Diagnostic Solutions

32,662

 

 

39,452

 

Total revenues

$

1,061,684

 

 

$

852,465

 

QUIDEL CORPORATION

Reconciliation of Non-GAAP Financial Information

(In thousands, except per share data; unaudited)

 

 

 

Three months ended September 30,

 

Gross Profit

 

Operating Income

 

Net Income

 

Diluted EPS

 

2021

 

2020

 

2021

 

2020

 

2021

 

 

2020

 

 

2021

 

2020

GAAP Financial Results

$

373,408

 

 

$

383,619

 

 

$

281,841

 

 

$

307,959

 

 

$

215,752

 

 

 

$

232,268

 

 

 

 

 

 

Interest expense on Convertible Senior Notes, net of tax

 

 

 

 

 

 

 

 

 

 

 

107

 

 

 

 

 

 

Net income used for diluted earnings per share, if-converted method

 

 

 

 

 

 

 

 

215,752

 

 

 

232,375

 

 

 

$

5.08

 

 

$

5.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash stock compensation expense

909

 

 

539

 

 

7,005

 

 

5,553

 

 

7,005

 

 

 

5,553

 

 

 

 

 

 

Amortization of intangibles

2,089

 

 

1,901

 

 

7,929

 

 

7,129

 

 

7,929

 

 

 

7,129

 

 

 

 

 

 

Amortization of debt issuance costs on credit facility

 

 

 

 

 

 

 

 

101

 

 

 

101

 

 

 

 

 

 

Non-cash interest expense for deferred consideration

 

 

 

 

 

 

 

 

957

 

 

 

1,414

 

 

 

 

 

 

Loss on extinguishment of Convertible Senior Notes

 

 

 

 

 

 

 

 

 

 

 

10,384

 

 

 

 

 

 

Gain on other investments

 

 

 

 

 

 

 

 

(1,164

)

 

 

 

 

 

 

 

 

Acquisition and integration costs

 

 

 

 

 

 

389

 

 

 

 

 

389

 

 

 

 

 

 

Foreign exchange loss (gain)

 

 

 

 

 

 

 

 

265

 

 

 

(159

)

 

 

 

 

 

Income tax impact of adjustments (a)

 

 

 

 

 

 

 

 

(3,170

)

 

 

(5,210

)

 

 

 

 

 

Adjusted

$

376,406

 

 

$

386,059

 

 

$

296,775

 

 

$

321,030

 

 

$

227,675

 

 

 

$

251,976

 

 

 

$

5.36

 

 

$

5.78

 

 

(a) Income tax impact of adjustments represents the tax impact related to the non-GAAP adjustments listed above and reflects an effective tax rate of 21% for 2021 and 21% for 2020.

QUIDEL CORPORATION

Reconciliation of Non-GAAP Financial Information

(In thousands, except per share data; unaudited)

 

 

 

Nine months ended September 30,

 

Gross Profit

 

Operating Income

 

Net Income

 

Diluted EPS

 

2021

 

2020

 

2021

 

2020

 

2021

 

 

2020

 

 

2021

 

2020

GAAP Financial Results

$

781,553

 

 

$

647,361

 

 

$

529,336

 

 

$

443,250

 

 

$

412,909

 

 

 

$

340,157

 

 

 

 

 

 

Interest expense on Convertible Senior Notes, net of tax

 

 

 

 

 

 

 

 

 

 

 

457

 

 

 

 

 

 

Net income used for diluted earnings per share, if-converted method

 

 

 

 

 

 

 

 

412,909

 

 

 

340,614

 

 

 

$

9.72

 

 

$

7.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash stock compensation expense

2,068

 

 

1,232

 

 

18,679

 

 

14,561

 

 

18,679

 

 

 

14,561

 

 

 

 

 

 

Amortization of intangibles

6,121

 

 

5,764

 

 

23,437

 

 

21,232

 

 

23,437

 

 

 

21,232

 

 

 

 

 

 

Amortization of debt issuance costs on credit facility

 

 

 

 

 

 

 

 

303

 

 

 

303

 

 

 

 

 

 

Non-cash interest expense for deferred consideration

 

 

 

 

 

 

 

 

3,515

 

 

 

5,026

 

 

 

 

 

 

Loss on extinguishment of Senior Credit Facility

 

 

 

 

 

 

 

 

 

 

 

10,384

 

 

 

 

 

 

Gain on other investments

 

 

 

 

 

 

 

 

(1,164

)

 

 

 

 

 

 

 

 

Change in fair value of acquisition contingencies

 

 

 

 

101

 

 

848

 

 

101

 

 

 

848

 

 

 

 

 

 

Change in fair value of derivative liabilities - Convertible Senior Note

 

 

 

 

 

 

 

 

 

 

 

1,084

 

 

 

 

 

 

Acquisition and integration costs

 

 

 

 

1,754

 

 

3,175

 

 

1,754

 

 

 

3,175

 

 

 

 

 

 

Foreign exchange loss

 

 

 

 

 

 

 

 

798

 

 

 

347

 

 

 

 

 

 

Income tax impact of adjustments (a)

 

 

 

 

 

 

 

 

(9,959

)

 

 

(11,962

)

 

 

 

 

 

Adjusted

$

789,742

 

 

$

654,357

 

 

$

573,307

 

 

$

483,066

 

 

$

450,373

 

 

 

$

385,612

 

 

 

$

10.60

 

 

$

8.85

 

 

(a) Income tax impact of adjustments represents the tax impact related to the non-GAAP adjustments listed above and reflects an effective tax rate of 21% for each of 2021 and 2020.

 

Quidel Contact:
Quidel Corporation
Randy Steward
Chief Financial Officer
858.552.7931

Media and Investors Contact:
Quidel Corporation
Ruben Argueta
858.646.8023
rargueta@quidel.com

Source: Quidel Corporation

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