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Quidel Reports Fourth Quarter and Full Year 2020 Financial Results

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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 fourth quarter and year ended December 31, 2020.

Fourth Quarter 2020 Highlights

  • Total revenue increased 432% to $809.2 million, from $152.2 million in the fourth quarter of 2019.

  • Revenue for COVID-19 products was $678.7 million.

  • Reported GAAP EPS of $10.78 per diluted share in the fourth quarter of 2020, compared with $0.71 per diluted share in the fourth quarter of 2019.

  • Reported non-GAAP EPS of $11.07 per diluted share in the fourth quarter of 2020, compared with $1.00 per diluted share in the fourth quarter of 2019.

  • Received Emergency Use Authorization (EUA) for Sofia® 2 Flu + SARS Antigen FIA rapid test.

  • Received EUA for QuickVue® SARS Antigen test for the professional point-of-care segment.

  • Received EUA for Solana® SARS-CoV-2 Assay for use with the Solana® molecular diagnostic system.

Full Year 2020 Highlights

  • Total revenue increased 211% to $1,661.7 million, from $534.9 million in 2019.

  • Revenue for COVID-19 products was $1,164.4 million.

  • Reported GAAP EPS of $18.60 per diluted share in the 2020, compared with $1.73 per diluted share in 2019.

  • Reported non-GAAP EPS of $19.92 per diluted share in 2020, compared with $2.97 per diluted share in 2019.

  • Received EUA for 6 different COVID-19 diagnostic products, ranging from PCR to isothermal molecular to rapid antigen technologies.

Fourth Quarter 2020 Results

Total revenue for the fourth quarter of 2020 was $809.2 million, versus $152.2 million for the fourth quarter of 2019. The 432% increase in sales from the fourth quarter of 2019 was driven by growth in Rapid Immunoassay and Molecular Diagnostic Solutions product categories, the result of strong demand for the newly launched Sofia® SARS Antigen and Lyra® SARS-CoV-2 tests. Additionally, Cardiometabolic Immunoassay revenues were higher compared with the fourth quarter of 2019. This growth in revenue was minimally offset by a decline in Specialized Diagnostic Solutions revenues. Currency exchange had a favorable impact of $1.4 million.

Rapid Immunoassay product revenue increased by $566.3 million in the fourth quarter of 2020 to $631.3 million, primarily due to $587.6 million in revenue for our Sofia® SARS Antigen and Sofia® 2 Flu + SARS Antigen tests. Cardiometabolic Immunoassay revenue totaled $70.0 million in the fourth quarter of 2020, an increase of 6% from the fourth quarter of 2019. Molecular Diagnostic Solutions revenue increased $89.4 million to $96.4 million due to incremental Lyra® SARS-CoV-2 assay revenue of $87.2 million. Specialized Diagnostic Solutions revenue decreased 20% from the fourth quarter of 2019 to $11.5 million.

"Looking back on Q4 and the full year of 2020, it is hard to overstate how the ingenuity and resilience of our people -- their dedication and sheer force of will to make a difference in fighting the pandemic -- has transformed our company and benefited our customers," said Douglas Bryant, president and CEO of Quidel Corporation. "In the quarter, our R&D teams developed six COVID-19 diagnostic assays across multiple technologies, our regulatory affairs teams secured EUAs to bring them to market and our operations teams built manufacturing lines and managed complex supply chains to vastly scale our production. Our tests have saved countless lives, allowed athletic seasons to resume and empowered people to take charge of their own health and safeguard others. It has been a privilege to witness and work alongside the Quidel Team, and our numbers for the year reflect the intensity and efficiency of the effort. The net result is our strongest balance sheet ever and an excellent competitive position entering 2021.

"We will soon be launching two exciting new products: Savanna, a multiplex molecular analyzer that we believe will be another flagship product in the history of the company; and the Sofia Q analyzer, a tiny product with the potential to eventually serve several 'new markets,' including the telemedicine and OTC markets. The addition of these products to our core portfolio positions us well for future growth," Mr. Bryant noted.

Gross Profit in the fourth quarter of 2020 increased to $701.5 million, driven by the demand for the new Sofia® SARS Antigen, Sofia® 2 Flu + SARS Antigen and Lyra SARS-CoV-2 products, which drove improved product mix and increased sales volume. These increases were only partially offset by increased indirect costs across all plants. Gross margin improved to 87% versus last year's 62% due to the introduction of high-margin Coronavirus products which resulted in significantly more volume running through the manufacturing facilities with relatively fixed overhead. R&D expense increased by $10.6 million in the fourth quarter as compared to the same period last year, due primarily to increased spending on SARS-CoV-2 diagnostic assay development, as well as development for Savanna and Sofia Q projects. We also incurred incremental labor and material costs associated with COVID-19 product development. Sales and Marketing expense increased by $10.2 million in the quarter, due primarily to increased freight costs as well as higher compensation costs driven by increased headcount and improved performance in the quarter. G&A expense increased by $5.9 million in the quarter due to increased headcount and higher compensation costs. Acquisition and integration costs of $0.5 million for the three months ended December 31, 2020 related to professional service fees.

In the fourth quarter of 2020, the Company recorded an income tax expense of $145.4 million, as compared with $1.9 million in the same quarter last year. The higher tax expense for the three months ended December 31, 2020 compared to the same period in the prior year is a result of higher pre-tax profits and lower proportional discrete tax benefits recorded in 2020 for excess tax benefits of stock-based compensation.

Net income for the fourth quarter was $470.1 million, or $10.78 per diluted share, as compared to a net income of $30.6 million, or $0.71 per diluted share, for the fourth quarter of 2019. On a non-GAAP basis, net income for the fourth quarter of 2020 was $482.8 million, or $11.07 per diluted share, as compared to net income of $43.5 million, or $1.00 per diluted share, for the same period in 2019.

Results for the Twelve Months Ended December 31, 2020

Total revenue for the twelve months ended December 31, 2020 was $1,661.7 million, versus $534.9 million for the same period in 2019. The 211% increase in sales was driven by greater Rapid Immunoassay and Molecular Diagnostics Solutions revenue associated with COVID-19. This was partially offset by lower Cardiometabolic Immunoassay revenue. Foreign exchange had a positive impact of $0.7 million for the twelve months ended December 31, 2020. The majority of the foreign currency tailwind impacted the Cardiometabolic Immunoassay business.

Rapid Immunoassay product revenue increased 497% in the twelve months ended December 31, 2020 to $1,144.8 million. This was led by a 742% growth in Sofia revenue to $1,092.7 million, while QuickVue sales decreased 15% to $48.3 million as compared to 2019. Cardiometabolic Immunoassay revenue totaled $242.9 million in the twelve months ended December 31, 2020, representing a 9% decline from 2019. Molecular Diagnostic Solutions revenue increased $201.2 million to $223.0 million, led by $203.2 million in revenue growth from Lyra. Specialized Diagnostic Solutions revenue for the twelve months ended December 31, 2020 was $50.9 million, down 7% from prior year.

Gross Profit in the twelve months ended December 31, 2020 increased to $1,348.9 million, driven by the demand for the new Sofia® SARS Antigen, Sofia® 2 Flu + SARS Antigen and Lyra SARS-CoV-2 products, which drove improved product mix. In addition, higher production volumes contributed to increased manufacturing overhead absorption, which offset increases in spend required to expedite the production ramp. Gross margin improved to 81% due to the same factors. R&D expense increased by $31.7 million in the twelve months ended December 31, 2020 as compared to the same period last year, due primarily to increased spending on Sofia, Savanna and next-generation instrument development projects. We also incurred higher labor, material and clinical trials spend associated with COVID-19 product development. Sales and Marketing expense increased by $22.8 million in the twelve months ended December 31, 2020, as compared to the same period in 2019, primarily due to higher employee-related costs, freight and bad debt expense. G&A expense increased by $13.8 million, primarily due to increased compensation costs from increased headcount to support the growth experienced in 2020 as well as improved performance in the period. Acquisition and integration costs of $3.7 million for the twelve months ended December 31, 2020 primarily related to the evaluation of new business development opportunities. Acquisition and integration costs of $11.7 million for the twelve months ended December 31, 2019 consisted primarily of global operation integration costs.

Net income for the twelve months ended December 31, 2020 was $810.3 million, or $18.60 per diluted share, as compared to net income of $72.9 million, or $1.73 per diluted share, for the same period in 2019. On a non-GAAP basis, net income for the twelve months ended December 31, 2020 was $868.4 million, or $19.92 per diluted share, as compared to net income of $127.8 million, or $2.97 per diluted share, for the same period in 2019.

Non-GAAP Financial Information

The Company 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.

Management 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 this enhances the comparison of the Company’s financial performance from period-to-period, and to that of its competitors. Constant currency revenue is calculated by translating current period revenues using prior period exchange rates, net of any hedging effect recognized in the current period. Constant currency revenue growth (expressed as a percentage) is calculated by determining the change in current period constant currency revenues over prior period revenues. 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 fiscal fourth quarter and full year 2020 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.

Investors may either join the live call by telephone, or join via webcast:

  • To participate in the live call by telephone from the U.S., please dial 833-968-2118, or from outside the U.S. dial 778-560-2849, and request either the "Quidel Q4 and FY 2020 Earnings Call" when prompted by the conference call operator, or dial conference ID 339-3433.

  • To join the live webcast, participants may click on the following link directly: https://event.on24.com/wcc/r/2948384/3C5838A0099F31657278AD32E3BDD754, or via the Investor Relations section of the Quidel website (http://ir.quidel.com).

The website replay will be available for 1 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 February 18th, 2020 by dialing 800-585-8367 from the U.S., or by dialing 416-621-4642 for international callers, and entering pass code 339-3433.

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 within the meaning of the federal securities laws that involve material risks, assumptions and uncertainties. Many possible events or factors could affect our future 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: the impact and duration of the COVID-19 global pandemic; competition from other providers of diagnostic products; our ability to accurately forecast demand for our products and products in development, including in new market segments; our ability to develop new technologies, products and markets and to commercialize new products; our reliance on sales of our COVID-19 and influenza diagnostic tests; our reliance on a limited number of key distributors; quantity of our product in our distributors’ inventory or distribution channels; changes in the buying patterns of our distributors; the financial soundness of our customers and suppliers; lower than anticipated market penetration of our products; third-party reimbursement policies and potential cost constraints; our ability to meet demand for our products; interruptions, delays or shortages in the supply of raw materials, components and other products and services; failures in our information technology and storage systems; our exposure to data corruption, cyber-based attacks, security breaches and privacy violations; international risks, including but not limited to, economic, political and regulatory risks; continuing worldwide political and social uncertainty; our development, acquisition and protection of proprietary technology rights; intellectual property risks, including but not limited to, infringement litigation; the loss of Emergency Use Authorizations for our COVID-19 products and failures or delays in receipt of reviews or regulatory approvals, clearances or authorizations for new products 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, clearances or authorizations or other adverse actions by regulatory authorities; our contracts with government entities involve future funding, compliance and possible sanctions risks; product defects; changes in government policies and regulations and compliance risks related thereto; our ability to manage our growth strategy and successfully identify, acquire and integrate potential acquisition targets or technologies and our ability to obtain financing; our acquisition of Alere’s Triage® business presents certain risks to our business and operations; the level of our deferred payment obligations; our exposure to claims and litigation that could result in significant expenses and could ultimately result in an unfavorable outcome for us, including the ongoing litigation between us and Beckman Coulter, Inc.; we may need to raise additional funds to finance our future capital or operating needs; our debt, deferred and contingent payment obligations; competition for and loss of management and key personnel; business risks not covered by insurance; changes in tax rates and exposure to additional tax liabilities or assessments; and provisions in our charter documents and Delaware law that might delay or impede stockholder actions with respect to business combinations or similar transactions. 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 from time to time, should be carefully considered, including those discussed in Item 1A, "Risk Factors" and elsewhere in our Annual Report on Form 10‑K for the year ended December 31, 2019 and in our subsequent Quarterly Reports on Form 10‑Q. 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 any revision or update of these forward-looking statements, whether as a result of new information, future events or otherwise.

QUIDEL CORPORATION

(In thousands, except per share data; unaudited)

Three months ended December 31,

Consolidated Statements of Operations:

2020

2019

Total revenues

$

809,203

$

152,178

Cost of sales

107,709

57,338

Gross profit

701,494

94,840

Research and development

25,495

14,924

Sales and marketing

38,239

28,000

General and administrative

20,165

14,302

Acquisition and integration costs

519

2,551

Total operating expenses

84,418

59,777

Operating income

617,076

35,063

Other expense, net

Interest and other expense, net

(1,552

)

(2,551

)

Total other expense, net

(1,552

)

(2,551

)

Income before income taxes

615,524

32,512

Provision for income taxes

145,394

1,886

Net income

$

470,130

$

30,626

Basic earnings per share

$

11.14

$

0.73

Diluted earnings per share

$

10.78

$

0.71

Shares used in basic per share calculation

42,211

41,875

Shares used in diluted per share calculation

43,622

43,290

Gross profit as a % of total revenues

87

%

62

%

Research and development as a % of total revenues

3

%

10

%

Sales and marketing as a % of total revenues

5

%

18

%

General and administrative as a % of total revenues

2

%

9

%

Consolidated net revenues by product category are as follows:

Rapid Immunoassay

$

631,253

$

64,936

Cardiometabolic Immunoassay

70,031

65,831

Molecular Diagnostic Solutions

96,431

7,073

Specialized Diagnostic Solutions

11,488

14,338

Total revenues

$

809,203

$

152,178

Condensed balance sheet data:

12/31/2020

12/31/2019

Cash and cash equivalents

$

489,941

$

52,775

Accounts receivable, net

$

497,688

$

94,496

Inventories

$

113,798

$

58,086

Total assets

$

1,871,164

$

910,867

Short-term debt

$

238

$

13,135

Long-term debt

$

4,100

$

4,375

Stockholders’ equity

$

1,332,703

$

559,820

QUIDEL CORPORATION

(In thousands, except per share data; unaudited)

Twelve months ended December 31,

Consolidated Statements of Operations:

2020

2019

Total revenues

$

1,661,668

$

534,890

Cost of sales

312,813

214,085

Gross profit

1,348,855

320,805

Research and development

84,292

52,553

Sales and marketing

133,957

111,114

General and administrative

66,586

52,755

Acquisition and integration costs

3,694

11,667

Total operating expenses

288,529

228,089

Operating income

1,060,326

92,716

Other expense, net

Interest and other expense, net

(9,623

)

(14,790

)

Loss on extinguishment of debt

(10,384

)

(748

)

Total other expense, net

(20,007

)

(15,538

)

Income before income taxes

1,040,319

77,178

Provision for income taxes

230,032

4,257

Net income

$

810,287

$

72,921

Basic earnings per share

$

19.24

$

1.78

Diluted earnings per share

$

18.60

$

1.73

Shares used in basic per share calculation

42,124

40,860

Shares used in diluted per share calculation

43,591

43,111

Gross profit as a % of total revenues

81

%

60

%

Research and development as a % of total revenues

5

%

10

%

Sales and marketing as a % of total revenues

8

%

21

%

General and administrative as a % of total revenues

4

%

10

%

Consolidated net revenues by product category are as follows:

Rapid Immunoassay

$

1,144,831

$

191,736

Cardiometabolic Immunoassay

242,933

266,505

Molecular Diagnostic Solutions

222,964

21,716

Specialized Diagnostic Solutions

50,940

54,933

Total revenues

$

1,661,668

$

534,890

QUIDEL CORPORATION

Reconciliation of Non-GAAP Financial Information

(In thousands, except per share data; unaudited)

Three months ended December 31,

Gross Profit

Operating Income

Net Income

Diluted EPS

2020

2019

2020

2019

2020

2019

2020

2019

GAAP Financial Results

$

701,494

$

94,840

$

617,076

$

35,063

$

470,130

$

30,626

Interest expense on Convertible Senior Notes, net of tax

(13

)

179

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

470,117

30,805

$

10.78

$

0.71

Adjustments:

Non-cash stock compensation expense

780

355

6,458

3,168

6,458

3,168

Amortization of intangibles

1,901

1,970

7,166

7,043

7,166

7,043

Amortization of debt issuance costs on credit facility

100

100

Non-cash interest expense for deferred consideration

1,543

1,872

Change in fair value of acquisition contingencies

557

841

557

841

Acquisition and integration costs

519

2,551

519

2,551

Foreign exchange (gain) loss

(307

)

59

Income tax impact of adjustments (a)

(3,368

)

(2,970

)

Adjusted

$

704,175

$

97,165

$

631,776

$

48,666

$

482,785

$

43,469

$

11.07

$

1.00

(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 2020 and 19% for 2019.

QUIDEL CORPORATION

Reconciliation of Non-GAAP Financial Information

(In thousands, except per share data; unaudited)

Twelve months ended December 31,

Gross Profit

Operating Income

Net Income

Diluted EPS

2020

2019

2020

2019

2020

2019

2020

2019

GAAP Financial Results

$

1,348,855

$

320,805

$

1,060,326

$

92,716

$

810,287

$

72,921

Interest expense on Convertible Senior Notes, net of tax

445

1,848

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

810,732

74,769

$

18.60

$

1.73

Adjustments:

Non-cash stock compensation expense

2,012

1,162

21,019

13,252

21,019

13,252

Amortization of intangibles

7,665

7,746

28,398

27,956

28,398

27,956

Amortization of debt issuance costs on credit facility

403

403

Non-cash interest expense for deferred consideration

6,569

8,224

Loss on extinguishment of Convertible Senior Notes

10,384

748

Change in fair value of acquisition contingencies

1,405

1,467

1,405

1,467

Change in fair value of derivative liabilities - Convertible Senior Note

1,084

Acquisition and integration costs

3,694

11,667

3,694

11,667

Foreign exchange loss

40

1,794

Income tax impact of adjustments (a)

(15,329

)

(12,447

)

Adjusted

$

1,358,532

$

329,713

$

1,114,842

$

147,058

$

868,399

$

127,833

$

19.92

$

2.97

(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 2020 and 19% for 2019.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210218006003/en/

Contacts

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