QuidelOrtho Reports Third Quarter 2022 Financial Results

Highlights

• Revenue of $783.8 million increased by 54% as reported
• Supplemental combined revenue of $783.8 million decreased by 21.8% in constant currency and increased 3.0%, excluding COVID-19 revenue; the transition of Beckman BNP assay sales to Beckman was a 3 percentage point headwind to revenue so the underlying base business increased 6.0%
• Growth in revenue, excluding COVID-19 revenue, was driven by Point-of-Care and Donor Screening product lines
• Strength in North America, LATAM, and ASPAC was partially offset by weakness in China and EMEA
• GAAP EPS of $0.28; Supplemental combined adjusted EPS of $1.85, a (54)% decrease from prior year, largely reflecting the strength of high margin COVID-19 revenue in the third quarter of 2021

QuidelOrtho Corporation (Nasdaq: QDEL) (the “Company” or “QuidelOrtho”), a global provider of innovative in vitro diagnostics technologies designed for point-of-care settings, clinical labs and transfusion medicine, today announced financial results for the third quarter ended October 2, 2022.

The Company reported total revenue for the third quarter of 2022 of $783.8 million, a 54% increase as reported, compared to $509.8 million for the third quarter of 2021. This was largely due to the consummation of the business combination that occurred on May 27, 2022 pursuant to a Business Combination Agreement entered into as of December 22, 2021, by and among Quidel Corporation (“Quidel”), Ortho Clinical Diagnostics Holdings plc (“Ortho”), QuidelOrtho, and the other parties thereto (the “Combinations”). GAAP diluted earnings per share (EPS) for the third quarter of 2022 decreased to $0.28, compared to $5.08 for the third quarter of 2021. GAAP operating income for the third quarter of 2022 was $56.8 million, compared to $281.8 million for the third quarter of 2021, and GAAP operating margin was 7% and 55% for the third quarters of 2022 and 2021, respectively. The third quarter 2022 results include significant one-time charges related to the Combinations.

In addition to the Company’s GAAP results, the Company is providing supplemental combined third quarter 2022 and 2021 revenues and adjusted operating results as if Quidel and Ortho had been combined for the applicable periods. The following discussion of financial results is based on supplemental combined information:

Third quarter 2022 total revenue of $783.8 million decreased by 21.8% in constant currency, compared to $1,032.3 million for the third quarter of 2021. Foreign currency translation negatively impacted sales growth by approximately 230 basis points for the third quarter of 2022. Adjusted diluted EPS for the third quarter of 2022 decreased to $1.85, compared to $4.01 for the third quarter of 2021. Adjusted EBITDA for the third quarter of 2022 was $226.8 million, compared to $435.2 million in the third quarter of 2021. Adjusted EBITDA margin for the third quarter of 2022 was 28.9%, compared to 42.5% for the third quarter of 2021.

“Our third quarter results reflect the remarkable cohesion, agility and dedication of our unified QuidelOrtho team, aided by the strength of our comprehensive product portfolio and expanded global commercial footprint,” said Douglas Bryant, Chairman and Chief Executive Officer of QuidelOrtho. “We are pleased with the operating leverage we generated, and the better-than-expected earnings results position us to raise our guidance for the full year.”

“Integration of our QuidelOrtho business is going well, surpassing our initial expectations, and will continue to be a key focus for us in the coming quarters. The progress we’ve made thus far is a testament to the underlying strength of our combined business, our exceptional team and our global market strategy. We look forward to advancing all our initiatives to drive sustainable growth and create long-term stockholder value,” Mr. Bryant concluded.

Fiscal Year 2022 Financial Guidance

The Company will provide updated 2022 financial guidance during its financial results conference call today.

Conference Call Information

QuidelOrtho will hold a conference call today at 2:00 p.m. PT / 5:00 p.m. ET to discuss its financial results for the third quarter ended October 2, 2022. Interested parties can access the call on the “Events & Presentations” section of the “Investor Relations” page of the Company’s website at https://ir.quidelortho.com/. Presentation materials will also be posted to the “Events & Presentations” section of the “Investor Relations” page of the Company’s website at the time of the call. Those unable to access the webcast may join the call via phone by dialing 844-200-6205 (domestic) or 929-526-1599 (international) and entering Conference ID number 968016.

A replay of the conference call will be available shortly after the event on the “Investor Relations” page of the Company’s website, under the “Events & Presentations” section.

About QuidelOrtho Corporation

QuidelOrtho Corporation (Nasdaq: QDEL) unites the power of Quidel Corporation and Ortho Clinical Diagnostics behind a shared mission of developing and manufacturing innovative technologies that raise the performance of diagnostic testing and create better patient outcomes across the entire healthcare continuum.

Ranked among the world’s largest in vitro diagnostics (IVD) providers with more than 120 years of collective experience, we combine industry-leading expertise in immunoassay and molecular testing with a global footprint in clinical labs and transfusion medicine.

Our company’s comprehensive product portfolio delivers accuracy, speed, automation and access, providing critical information when and where it is needed most. Inspired by a spirit of service, QuidelOrtho is committed to enhancing the well-being of people worldwide and happy in the knowledge we are making a difference. For more information, please visit www.quidelortho.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements and other forward-looking statements in this press release by words such as “may,” “will,” “would,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “continue,” or similar words, expressions or the negative of such terms or other comparable terminology. These statements include, but are not limited to, the benefits and results of the Combinations and integration of the businesses of Quidel and Ortho, including QuidelOrtho’s execution of cost and revenue synergies, commercial, integration and other strategic goals, future financial and operating results, future plans, objectives, strategies, expectations and intentions and other statements that are not historical facts. Such statements are based on the current beliefs and expectations of QuidelOrtho’s management and are subject to significant risks and uncertainties. Actual results may differ significantly from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the challenges and costs of integrating, restructuring and achieving anticipated synergies as a result of the Combinations; the ability to retain key employees; and other economic, business, competitive, and/or regulatory factors affecting the business of QuidelOrtho generally. Additional risks and factors are identified under “Risk Factors” in QuidelOrtho’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “Commission”) on August 5, 2022 and subsequent reports filed with the Commission. You should not rely on forward-looking statements as predictions of future events because these statements are based on assumptions that may not come true and are speculative by their nature. QuidelOrtho has no obligation to update any of the forward-looking information included in this press release, whether as a result of new information, future events, changed expectations or otherwise, except as required by law. All forward-looking statements are based on information currently available to QuidelOrtho and speak only as of the date hereof.

Supplemental Combined Financial Measures

This press release contains unaudited supplemental combined financial information (“Supplemental Combined Information”) that gives effect to the Combinations as if Quidel and Ortho had been combined for the applicable periods. The Supplemental Combined Information presented is based on the historical financial statements of Quidel and Ortho with reclassification adjustments only and do not include all of the pro forma adjustments required under Regulation S-X Article 11 or Accounting Standards Codification 805, Business Combinations (“ASC 805”). This Supplemental Combined Information is provided for illustrative purposes only, may be updated in the future, and is not necessarily, and should not be assumed to be, indicative of the Company’s expected results of operations or financial position that would have been achieved had the Combinations been completed as of the dates indicated or that may be achieved in any future period. The Supplemental Combined Information should be considered supplemental to, and not as a substitute for, pro forma financial information prepared in accordance with Regulation S-X Article 11 or ASC 805 and should be read in conjunction with the information contained in the sections entitled “The Combinations,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Ortho” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Quidel” in QuidelOrtho’s joint proxy statement/prospectus (the “Joint Proxy Statement/Prospectus”) filed with the Commission on April 11, 2022 and the historical consolidated financial statements and related notes appearing elsewhere in, or incorporated into, the Joint Proxy Statement/Prospectus, and the Company’s subsequent reports filed with the Commission. The Company’s actual results of operations and financial position will differ, potentially significantly, from the Supplemental Combined Information reflected in this press release as a result of the methodology used to prepare the Supplemental Combined Information as well as a variety of factors, including but not limited to the effect of certain expected financial benefits of the Combinations (such as revenue and cost synergies), the anticipated costs to achieve these benefits (including the cost of integration activities), tax impacts, and changes in operating results following the date of this press release.

Non-GAAP Financial Measures

This press release contains financial measures, including but not limited to “constant currency revenue growth,” “adjusted net income,” “adjusted diluted EPS,” “adjusted EBITDA,” “adjusted EBITDA margin,” “supplemental combined revenue,” “supplemental combined adjusted net income,” “supplemental combined adjusted diluted EPS,” “supplemental combined adjusted EBITDA” and “supplemental combined adjusted EBITDA margin,” which are considered non-GAAP financial measures under applicable rules and regulations of the Commission. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). “Adjusted net income,” “adjusted EBITDA” and “adjusted diluted EPS” eliminate impacts of certain non-cash, unusual or other items that the Company does not consider indicative of its ongoing operating performance, and the Company generally uses these non-GAAP financial measures to facilitate management’s financial and operational decision-making, including evaluation of the Company’s historical operating results and comparison to competitors’ operating results. The Company believes that “supplemental combined adjusted net income,” “supplemental combined revenue,” “supplemental combined adjusted diluted EPS,” “supplemental combined adjusted EBITDA” and “supplemental combined adjusted EBITDA margin” provide helpful Supplemental Combined Information to assist management and investors in evaluating the Company’s adjusted operating results as if Quidel and Ortho had been combined for the applicable periods. The Company’s definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of factors and trends affecting the Company’s business. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and reports filed with the Commission in their entirety. Reconciliations of the non-GAAP financial measures, including the non-GAAP Supplemental Combined Information, to the most directly comparable GAAP financial measures are included in the tables accompanying this press release.

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